Arthritis NSW Financial Statements 2012/13 by Nick Quirke

FINANCIAL STATEMENTS ARTHRITIS NSW - FOR THE YEAR ENDED 30 JUNE 2013 ABN 64 528 634 894

1 IN 5 PEOPLE ARE AFFECTED WITH ARTHRITIS IN NSW.

CONTENTS

Directors’ Report

Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

Directors’ Declaration

Declaration by Chief Executive Officer in respect of fundraising appeals

Independent Audit Report

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

Directorsâ&#x20AC;&#x2122; Report AS AT 30 JUNE 2013

Your directors present their report on Arthritis NSW for the financial year ended 30 June 2013. Information on Directors The names of each person who has been a director during the year and to the date of this report are:

Greg Monaghan Position Experience and qualifications

President Executive and Company Director

Dennis Messner Position Experience and qualifications

Honorary Treasurer Chartered Accountant

Judith Cantor Position Experience and qualifications

Vice President Marketing and Fundraising

Cosimina Pupo Experience and qualifications

Legal Consultant

Prof. Nicholas Manolios Experience and qualifications

Rheumatologist

Evan Manolios Position Experience and qualifications

Secretary Lawyer

Doris Carrall Experience and qualifications

Branches Representative

Diana Aspinall Experience and qualifications Resigned

Consumer Representative 28 January 2013

Neil Wildman Experience and qualifications Resigned

Pharamaceutical Executive 25 July 2012

Associate Prof. Jeno Emil Marosszeky Experience and qualifications Resigned

Senior Specialist, Rehabilitation Medicine 28 November 2012

Allan Ryan Experience and qualifications

Executive Director

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Directors’ Report AS AT 30 JUNE 2013 Information on Directors Peter Ricketts Experience and qualifications Appointed

Chartered Accountant and Executive Director 28 August 2013

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Principal Activities The principal activities of Arthritis NSW during the financial year were the delivery of health promotion programs and services, implementation of fundraising and marketing activities, development of new education resources and support to branches and other support networks across New South Wales. No significant changes in the nature of the Company’s activity occurred during the financial year. Objectives and Strategy The Company’s objectives are to provide up to date, evidence based health promotion services and programs, promote a support network across the state, maintain strong membership, promote research, ensure sustainability through good governance, grow the Arthritis NSW brand and achieve sustained regular income and strategic partnerships. Performance Measures The Company measures its performance by tracking achievements against these objectives. Members Guarantee Arthritis NSW is a company limited by guarantee and without share capital. Under the terms of the Company’s constitution, every member of the Company undertakes to contribute to the assets of the Company in the event of it being wound up while that person is a member, or within one year after ceasing to be a member for: • payment of the debts and liabilities of the Company (contracted before ceasing to be a member), • the costs and charges of winding up, and • the adjustments of the rights of the contributories amongst themselves. Such amount as may be required is limited to $20 per member. The number of members at 30 June 2013 was 5,441 (2012: 4,704) At 30 June 2013 the collective liability of members was $108,820 (2012: $94,080). Meetings of Directors During the financial year, nine meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows:

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

Directors’ Report AS AT 30 JUNE 2013 Meetings of Directors (cont.) Directors’ Meetings Number eligible to attend

Number attended

Greg Monaghan

Dennis Messner

Judith Cantor

Cosimina Pupo

Prof. Nicholas Manolios

Evan Manolios

Doris Carrall

Diana Aspinall

Neil Wildman

Associate Prof. Jeno Emil Marosszeky

Allan Ryan

Peter Ricketts

1. Operating Results and Review of Operations for the Year Review of Operations The deficit for the year was $612,495 (2012: 320,831). The result this year has been abnormally affected by the transfer of funds to Arthritis Australia of $243,208 for the Leanne Stafford Memorial Award. This amount was previously recorded as revenue of the Company and has been shown as expenditure for the 2013 year. Auditor’s Independence Declaration The auditor’s independence declaration in accordance with section 307C of the Corporations Act 2001, for the year ended 30 June 2013 has been received and can be found on page 4 of the financial report. Signed in accordance with a resolution of the Board of Directors: Director: .................................................................................................................................................................. Mr Greg Monahan Director: .................................................................................................................................................................. Mr Dennis Messner Dated

11 October 2013

Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

Auditorâ&#x20AC;&#x2122;s Independence Declaration

UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF ARTHRITIS NSW I declare that, to the best of my knowledge and belief, during the year ended 30 June 2013, there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

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

CIB Accountants & Advisers Chartered Accountants

George Isaac Partner Suite 6, 5-7 Ross Street, North Parramatta NSW 15 October 2013

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

Statement of Comprehensive Income FOR THE YEAR ENDED 30 JUNE 2013

2013

2012

Note

Revenue

1,336,150

1,078,594

Other income

198,422

254,743

Employee benefits expense

(943,189)

(828,241)

(46,812)

(36,327)

Education expenses

(186,347)

(89,912)

Marketing and fundraising expenses

(296,550)

(254,501)

Funds transferred to Arthritis Australia (Note a)

(243,208)

Other expenses

(430,961)

(445,187)

Profit before income tax

(612,495)

(320,831)

Profit from continuing operations

(612,495)

(320,831)

Profit for the year

(612,495)

(320,831)

51,548

9,945

51,548

9,945

(560,947)

(310,886)

Depreciation and amortisation expense

Income tax expense

Other comprehensive income: Changes in fair value of available for sale financial assets Other comprehensive income for the year, net of tax Total comprehensive income for the year

Note a - Executive Summary The deficit for the year was $560,947 (2012, $310,886).The result this year has been abnormally affected by the transfer of funds to Arthritis Australia of $243,208 for the Leanne Stafford Memorial Award. This amount was previously recorded as revenue of the organisation and has been shown as expenditure for the 2013 year.

The accompanying notes form part of these financial statements.

Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

Statement of Financial Position AS AT 30 JUNE 2013

2013 Note

2012 $

Assets Current assets Cash and cash equivalents

1,740,590

2,468,758

Trade and other receivables

2,300,171

2,191,732

Inventories

4,949

7,137

4,045,710

4,667,627

Total current assets Non current assets Financial assets

286,201

240,250

Property, plant and equipment

1,268,427

1,285,601

Total non current assets

1,554,628

1,525,851

Total assets

5,600,338

6,193,478

Liabilities Current liabilities Trade and other payables

133,537

178,068

Employee benefits

83,171

75,754

216,708

253,822

20,329

15,408

Total non current liabilities

20,329

15,408

Total liabilities

237,037

269,230

Net assets

5,363,301

5,924,248

Reserves

174,815

156,773

Retained earnings

5,188,486

5,767,475

5,363,301

5,924,248

5,363,301

5,924,248

Total current liabilities Non current liabilities Employee benefits

Equity

Total equity The accompanying notes form part of these financial statements.

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

Statement of Changes in Equity FOR THE YEAR ENDED 30 JUNE 2013 2013

Retained Earnings $

Fair value reserve (Note a)

Specific reserves (Note b)

Total

Balance at 1 July 2012

5,767,475

49,728

107,045

5,924,248

Profit attributable to members of the entity

(612,495)

30,494

(30,494)

51,548

3,012

(3,012)

Sub total

(578,989)

21,054

(3,012)

(560,947)

Balance at 30 June 2013

5,188,486

70,782

104,033

5,363,301

Transfer on disposals Transactions with owners in their capacity as owners Net change in fair value of available for sale financial assets Transfers from specific reserves to retained earnings

Note a - Fair value reserve The fair value reserve records revaluations of available for sale assets to market value at balance date. Note b - Specific reserves The specific reserve records funds set aside for particular purposes in accordance with the terms of the income received.

2012

Retained Earnings

Fair value reserve

Specific reserves

Total

Balance at 1 July 2011

6,088,306

39,783

107,045

6,235,134

Profit attributable to members of the entity

(320,831)

Transactions with owners in their capacity as owners Contribution of equity, net of transaction costs Net change in fair value of available for sale financial assets

9,945

Sub total

(320,831)

9,945

(310,886)

Balance at 30 June 2012

5,767,475

49,728

107,045

5,924,248

The accompanying notes form part of these financial statements.

Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

Statement of Cash Flows

FOR THE YEAR ENDED 30 JUNE 2013 2013 Note

2012 $

Cash flows from operating activities: Receipts from customers

1,245,754

1,174,009

Payments to suppliers and employees

(2,148,304)

(1,666,152)

Dividends received

17,602

14,385

Interest received

180,820

218,088

(704,128)

(259,670)

Net cash provided by (used in) operating activities

Cash flows from investing activities: Proceeds from sale of available for sale investments

24,897

Purchase of property, plant and equipment

(29,637)

Purchase of available for sale investments

(19,300)

Investments in call deposits

2,080,252

Net cash (used in) from investing activities

(24,040)

2,080,252

Net increase (decrease) in cash and cash equivalents held

(728,168)

1,820,582

Cash and cash equivalents at beginning of year

2,468,758

648,176

1,740,590

2,468,758

Cash flows from financing activities:

Cash and cash equivalents at end of financial year

The accompanying notes form part of these financial statements.

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013

The financial statements are for Arthritis NSW as an individual entity, incorporated and domiciled in Australia. Arthritis NSW is a not-for-profit company limited by guarantee. 1

Summary of Significant Accounting Policies (a)

Basis of preparation The financial statements are a general purpose financial statements that has been prepared in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. The financial statements have been prepared on an accruals basis and are based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

(b)

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

(c) Inventories Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. (d)

Property, plant and equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

Property

Land and buildings are measured at cost less accumulated depreciation and impairment losses.

Plant and equipment Plant and equipment are measured on the cost basis less depreciation and impairment losses. Cost includesexpenditure that is directly attributable to the asset.

Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 1

Summary of Significant Accounting Policies (cont.)

(d)

Property, plant and equipment (cont.) Depreciation The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated on a straight-line basis over the asset’s useful life to the company commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. Land is not depreciated. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Useful life Buildings 40 years Plant and Equipment 3-5 years Motor Vehicles 3-5years The assets’ residual values, depreciation methods and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

(e)

Financial instruments Initial recognition and measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions of the instrument. For financial assets, this is the equivalent to the date that the company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transactions costs, except where the instrument is classified ‘at fair value through profit or loss’ in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement Financial instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Amortised cost is calculated as:

(a)

the amount at which the financial asset or financial liability is measured at initial recognition;

(b)

less principal repayments;

(c)

plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and

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Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 1

Summary of Significant Accounting Policies (cont.)

(e)

Financial instruments (cont.) (d)

Less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss. The classification of financial instruments depends on the purpose for which the investments were acquired.Management determines the classification of its investments at initial recognition and at the end of each reporting period for held-to-maturity assets. The company does not designate any interest as being subject to the requirements of accounting standards specifically applicable to financial instruments. (i)

Financial assets at fair value through profit or loss

Financial assets are classified at â&#x20AC;&#x2DC;fair value through profit or lossâ&#x20AC;&#x2122; when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss. (ii)

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting year. (iii)

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the companyâ&#x20AC;&#x2122;s intention to hold these investments to maturity. They are subsequently measured at amortised cost. Held-to-maturity investments are included in non-current assets, except for those which are expected to be realised within 12 months after the end of the reporting period, which will be classified as current assets. If during the period the company sold or reclassified more than an insignificant amount of the held-to-maturity investments before maturity, the entire held-tomaturity investments category would be tainted and reclassified as available-for-sale. (iv)

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either not suitable to

Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 1

Summary of Significant Accounting Policies (cont.) (e)

Financial instruments (cont.) be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. Available-for-sale financial assets are included in non-current assets, except for those which are expected to be sold within 12 months after the end of the reporting period. (v)

Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Fees payable on the establishment of loan facilities are recognised as transaction costs of the loan. Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. Impairment Objective evidence that a financial asset is impaired includes default by a debtor, evidence that the debtor is likely to enter bankruptcy or adverse economic conditions in the stock exchange. At the end of each reporting period, the company assesses whether there is objective evidence that a financial asset has been impaired through the occurrence of a loss event. In the case of availablefor-sale financial instruments, a significant or prolonged decline in the value of the instrument is considered to indicate that an impairment has arisen. Where a subsequent event causes the amount of the impairment loss to decrease (e.g. payment received), the reduction in the allowance account (provision for impairment of receivables) is taken through profit and loss. However, any reversal in the value of an impaired available for sale asset is taken through other comprehensive income rather than profit and loss. Impairment losses are recognised through an allowance account for loans and receivables in the statement of comprehensive income. (f)

Impairment of non-financial assets At the end of each reporting year, the company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Value in use is either the discounted cash flows relating to the asset or depreciated replacement cost if the criteria in AASB 136 ‘Impairment of Assets’ are met. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income. Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 1

Summary of Significant Accounting Policies (cont.) (f)

Impairment of non-financial assets (cont.) Where an impairment loss on a revalued asset is identified, this is debited against the revaluation surplus in respect of the same class of asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same class of asset.

(g)

Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less which are convertible to a known amount of cash and subject to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position.

(h)

Employee benefits Provision is made for the companyâ&#x20AC;&#x2122;s liability for employee benefits arising from services rendered by employees to the end of the reporting year. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability consideration is given to employee wage increases and the probability that the employee may not satisfy vesting requirements. Those cash outflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows. Contributions are made by the company to an employee superannuation fund and are charged as expenses when incurred.

(i)

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.

(j)

Revenue and other income The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of Arthritis NSWâ&#x20AC;&#x2122;s activities as discussed below. Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue. Goods sold Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration received or receivable, net of returns, discounts and allowances. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideraiton is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 1

Summary of Significant Accounting Policies (cont.)

(j)

Revenue and other income (cont.) Services Revenue from services rendered is recognised in profit or loss in the period which the service is performed. Bequests Revenue from bequests is recognised in profit or loss in the period in which it is received and control has passed to the Company. Donations, fundraising and grant income Revenue from donations, fundraising and grants is recognised in profit or loss when the Company gains control of the contribution or the right to receive the contribution. Contribution of assets Contributions of assets such as shares, real property, and other securities are recognised in profit or loss when title passes to the Company at the estimated market value. Membersâ&#x20AC;&#x2122; subscriptions Membersâ&#x20AC;&#x2122; subscriptions income is recongised in profit or loss in the financial year to which the membership relates. Grant revenue Grant revenue is recognised in the statement of comprehensive income when the entity obtains control of the grant, it is probable that the economic benefits gained from the grant will flow to the entity and the amount of the grant can be measured reliably. When grant revenue is received whereby the entity 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. All revenue is stated net of the amount of goods and services tax (GST).

(k) 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 Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 1

Summary of Significant Accounting Policies (cont.)

(l)

Critical accounting estimates and judgments The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company.

(m)

Adoption of new and revised accounting standards During the current year, the company adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory. The adoption of these Standards has impacted the recognition, measurement and disclosure of certain transactions. The following is an explanation of the impact the adoption of these Standards and Interpretations has had on the financial statements of Arthritis NSW.

2 Revenue 2013 $

2012 $

295,257

262,151

- Member subscriptions

92,665

80,112

- Branches income

24,110

35,617

- Government grants

40,000

39,975

- Kidsflix

163,008

186,588

- Services income

167,483

82,685

25,000

- Fundraising appeals

138,466

152,040

- Other revenue

390,161

239,426

1,336,150

1,078,594

2013

2012

- Bequests

- Arthritis Australia grant

Total Revenue

Other Income Interest income

180,820

218,088

Dividend income

13,288

14,386

4,314

22,269

198,422

254,743

Imputation credits on dividend income Total other income

Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 3

Personnel Expenses Included in the Statement of Comprehensive Income 2013 $ Salaries and wages Superannuation contributions Increase/(decrease) in provision for annual leave Increase/(decrease) in provision for long service leave Recruitment costs Total

832,593

771,724

70,823

75,972

9,907

(19,723)

2,431

(728)

27,435

996

943,189

828,241

2013

2012

Cash and Cash Equivalents $ Bank balances and call deposits

$ 400

500

1,740,190

2,468,258

1,740,590

2,468,758

Petty cash

2012

Trade and Other Receivables 2013

2012

5,543

5,639

(4,026)

1,517

5,639

650

100

2,264,614

2,148,012

Current Trade receivables Provision for impairment Bonds Bank deposits Accrued income - franking credit Interest receivable Total current trade and other receivables

5,514

6,607

27,876

31,374

2,300,171

2,191,732

2013

2012

6 Inventories $

4,949

7,137

4,949

7,137

At cost: Finished goods

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 7

Other Financial Assets 2013

2012

Non-current Available for sale financial assets

286,201

240,250

Total non-current assets

286,201

240,250

(a) Available-for-sale financial assets comprise of investments in the ordinary issued capital of various entities. There are no fixed returns or fixed maturity dates attached to these investments. 8

Property, Plant and Equipment Building At cost

1,368,626

Accumulated depreciation

(138,915)

(104,700)

Total buildings

1,229,711

1,263,926

Plant and equipment At cost

116,318

148,417

Accumulated depreciation

(95,471)

(126,742)

Total plant and equipment

20,847

21,675

18,485

29,665

(616)

(29,665)

17,869

1,268,427

1,285,601

Motor vehicles At cost Accumulated depreciation Total motor vehicles Total property, plant and equipment (a)

Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Buildings

Plant and Equipment

Motor Vehicles

Total

Balance at 30 June 2013 Balance at the beginning of year Additions Depreciation expense Balance at 30 June 2013

1,263,927

20,696

1,284,623

11,995

18,485

30,480

(34,216)

(11,844)

(616)

(46,676)

1,229,711

20,847

17,869

1,268,427

Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 9

Trade and Other Payables 2013 $

2012 $

Current Trade payables Deposits

72,192

2,520

(15,274)

(22,201)

Employee benefits

21,153

18,574

Accrued expenses

15,000

25,245

Deferred income

47,642

36,057

Grants received in advance

34,764

46,584

3,386

1,617

133,537

178,068

2013

2012

GST liability

Other payables UD1

24,346

Employee Benefits $

Current Long service leave

8,705

11,195

74,466

64,559

83,171

75,754

Non-current

20,329

15,408

Long service leave

20,329

15,408

Annual leave

Membersâ&#x20AC;&#x2122; Guarantee The company is incorporated under the Corporations Act 2001 and 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 $20 each towards meeting any outstandings and obligations of the company. At 30 June 2013 the number of members was 5,441 (2012: 4,704).

Interests of Key Management Personnel The total remuneration paid to key management personnel of the company is $279,273 (2012: $279,308).

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 13

Cash Flow Information

(a)

Reconciliation of cash 2013

2012

1,740,590

2,468,758

Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents (b)

Reconciliation of result for the year to cashflows from operating activities

Reconciliation of net income to net cash provided by operating activities: 2013 Profit for the year

2012

(612,494)

(310,886)

46,812

36,327

(112,465)

11,343

30,108

2,187

5,688

22,069

974

(66,601)

(12,773)

16,364

(20,451)

(704,128)

(259,670)

Cash flows excluded from profit attributable to operating activities Non-cash flows in profit: - depreciation Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries: - (increase)/decrease in trade and other receivables - (increase)/decrease in prepayments - (increase)/decrease in inventories - (increase)/decrease in income in advance - increase/(decrease) in trade and other payables - increase/(decrease) in provisions Cashflow from operations 14

Events after the end of the Reporting Period The financial report was authorised for issue on 26 September 2013 by the Board of Directors. 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 future financial years.

Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 15 Results of Fundraising Appeals 2013 $

2012 $

Gross proceeds from fundraising appeals

480,177

341,902

Less: Direct costs of fundraising appeals

(169,341)

(100,144)

310,836

241,758

Net surplus obtained from fundraising appeals

The surplus obtained from fundraising appeals was applied against other expenses incurred. The total of other expenses incurred was as follows: 2013 $ Distributions Administration expenses

2012 $

293,208

343,442

1,325,232

1,213,689

1,618,440

1,557,131

The shortfall of $1,307,604 (2012: $1,315,373) between the net surplus obtained from fundraising appeals of $310,836 (2012: $241,758) and expenditure and transfers of $1,618,440 (2012: $1,557,131) was provided from the following sources: 2013 $

295,257

262,151

Member subscriptions

92,665

80,112

Branches income

24,110

35,617

Grants

40,000

39,975

Investment and other income

198,422

254,743

Kidsflix income

163,008

186,588

Services income

167,483

82,685

25,000

61,296

Bequests

Other income Decrease in accumulated funds

2012

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

612,495

320,831

1,618,440

1,323,998

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2013 Comparisons of certain monetary figures and percentages 2013 $ Gross income from fundraising

2013 %

2012 $

2012 %

480,177

341,902

(169,341)

(100,144)

Net surplus from fundraising

310,836

241,758

Gross income from fundraising

480,177

341,902

Total cost of services

293,208

343,442

Total cost of fundraising

Total income received

1,486,122

1,345,069

Total costs of services

293,208

343,442

1,618,440

1,557,131

Total expenditure

Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

directorsâ&#x20AC;&#x2122; declaration The directors of the company declare that: 1. The financial statements and notes, as set out on pages 5 to 21, are in accordance with the Corporations Act 2001 and:

a. comply with Accounting Standards - Reduced Disclosure Requirement; and

b. give a true and fair view of the financial position as at 30 June 2013 and of the performance for the year ended on that date of the company.

2. In the directorsâ&#x20AC;&#x2122; 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: .................................................................................................................................................................. Mr Greg Monahan

Director: .................................................................................................................................................................. Mr Dennis Messner Dated

11 October 2013

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

DECLARATION BY CHIEF EXECUTIVE OFFICER IN RESPECT OF FUNDRAISING APPEALS I, Nettie Burke, Chief Executive Officer of Arthritis NSW, declare in my opinion: (a) the financial statements give a true and fair view of all income and expenditure of Arthritis NSW with respect to fundraising appeal activities for the financial year ended 30 June 2013; (b) the statement of financial position gives a true and fair view of the state of affairs with respect to fundraising activities as at 30 June 2013; (c) the provisions of the Charitable Fundraising Act (NSW) 1991 and regulations and the conditions attached to the authority have been complied with for the period 1 July 2012 to 30 June 2013; and (d) the internal controls exercised by Arthritis NSW are appropriate and effective in accounting for all income received. It is not always practicable for Arthritis NSW to establish accounting control over all sources of fundraising activities prior to the receipt of the funds by employees of the Company.

.................................................................................................................................................................. Nettie Burke Chief Executive Officer Dated

22 October 2013

Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

Independent Audit Report to the members of Arthritis NSW Report on the Financial Report We have audited the accompanying financial report of Arthritis NSW, which comprises the statement of financial position as at 30 June 2013, the statement of 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 directors’ declaration. Directors’ Responsibility 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 in accordance with Australian Accounting Standards- Reduced Disclosure Requirements and the Corporations Act 2001 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. Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report that gives a true and fair view 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Arthritis NSW, would be in the same terms if given to the directors as at the time of this auditor’s report. Basis for Qualified Opinion Fundraising and bequest income are a significant revenue for Arthritis NSW. The Company has determined that it is impractical to establish controls over collection of fundraising and bequest income prior to its entry into the financial records. Accordingly, as the evidence available to us regarding the fundraising income from this source was limited, our audit procedures with respect to fundraising were restricted tot eh amounts recorded in the financial records. We are therefore unable to express an opinion whether the fundraising and bequest income of Arthritis NSW obtained is complete.

Arthritis NSW | Financial Statements 2012/13 www.arthritisnsw.org.au

Independent Audit Report to the members of Arthritis NSW Qualified Opinion In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the financial report of Arthritis NSW is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the companyâ&#x20AC;&#x2122;s financial position as at 30 June 2013 and of its performance for the year ended on that date; and (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Qualified audit opinion pursuant to the Charitable Fundraising (NSW) Act 1991 In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, (a) the financial report gives a true and fair view of the companyâ&#x20AC;&#x2122;fundraising appeal activities for the financial year ended 30 June 2013; (b) the financial report has been properly drawn up, and the associated records have been properly kept for the period from 1 July 2012 to 30 June 2013 in accordance with the Charitable Fundraising Act (NSW) 1991 and Regulations;and (c) there are reasonable grounds to believe that Arthritis NSW will be able to pay its debts as a and when they fall due.

CIB Accountants & Advisers Chartered Accountants

George Isaac Partner Suite 6, 5-7 Ross Street, North Parramatta NSW 15 October 2013

A Suite 6, Blaxland House 5-7 Ross Street Parramatta, NSW, Australia. 2150.

P PO Box 2492, North Parramatta, NSW, Australia. 1750.

T +61 2 9683 5999 F +61 2 9683 6313

E parramatta@cibaccountants.com.au W www.cibaccountants.com.au

Arthritis NSW | Annual Report 2012/13 www.arthritisnsw.org.au

Arthritis NSW

Locked Bag 2216, North Ryde, NSW, 1670. Phone: (02) 9857 3300 Fax: (02) 9857 3399 Toll Free: 1800 011 041 www.arthritisnsw.org.au Authority to fundraise CFN12845 ABN 64 528 634 894