Notes to the Financial Statements

FOR THE YEAR ENDED 30 JUNE 2022

1. General information and statement of compliance

(a) Basis of preparation

Cabrini Outreach is a single reporting entity and prepares general purpose financial statements in accordance with Australian Accounting Standards – Simplified Disclosures and the Australian Charities and Not-for- profits Commission Act 2012. The financial statements have been prepared on a historical cost basis. Cabrini Outreach is limited by guarantee for the purpose of preparing the financial statements.

The financial statements for the year ended 30 June 2022 were approved and authorised for issue by the Board of Directors on 30 September 2022.

(b) Consideration of COVID -19

The COVID-19 pandemic as declared by the World Health Organisation is continuing to impact the Company’s operations and financial performance subsequent to 30 June 2022.

Cabrini Australia Limited provides donation funding to Cabrini Outreach.

Cabrini Australia Limited (Cabrini Outreach’s parent) entered the Private Hospital Funding Agreement (COVID-19 comprehensive agreement) with the Department of Health and Human Services in the State of Victoria (or the State) in April 2020. The purpose of the agreement was for private hospital operators to make facilities and services (including equipment and staff) available to assist with the national COVID-19 response. The agreement has also provided assurance of financial viability to operators like Cabrini Australia Limited in a time where normal operations have been restricted.

The agreement was effective from 1 April 2020 and will continue until either Cabrini Australia Limited or the State provide notice or by mutual agreement. The agreement has a 12 month ’hibernation’ clause whereby the State allows operators to return to normal operations whilst allowing for a restart to provide COVID-19 pandemic support when necessary.

2. Accounting standards and interpretations

New accounting standards and interpretations adopted as at 30 June 2022

AASB 1060 General Purpose Financial Statements –Simplified Disclosures for For-Profit and Not- forProfit Tier 2 Entities

AASB 1060 replaces the Reduced Disclosure Requirements (RDR) framework with the Simplified Disclosures Standard (SDS). SDS aims to reduce the reporting burden of those preparing GPFS (Tier 2) reports by requiring disclosures based on those in the IASB’s IFRS for SMEs standard. This standard is effective 1 July 2021.

The key features of SDS are:

• A single standard (AASB 1060) with all disclosures required by entities preparing GPFS (Tier 2) reports (including public sector and NFP entities) standard with some modifications to account for differences in Australia’s recognition and measurement requirements (that follow full IFRS recognition and measurement), and Australian specific disclosure needs

• Some Australian specific disclosures including disclosures of fees for audit and review services, disclosure of imputation tax credits (which were disclosures were previously under AASB 1054 Australian Additional Disclosures) and a numerical tax reconciliation

• The AASB has issued ED 306 to propose that NFPs early adopting SDS do not need to provide comparative information in the notes to the financial statements when its latest GPFS (Tier 2) report does not disclose such similar information

There are no other new accounting standards and interpretations effective at 30 June 2022 that materially impact Cabrini Outreach.

There are no new accounting standards and interpretations that are not yet effective and have not been adopted early.

3. Summary of accounting policies Overall considerations

The significant accounting policies that have been used in the preparation of these financial statements are summarised below.

The financial statements have been prepared using the measurement bases specified by Australian Accounting Standards for each type of asset, liability, income, and expense. The measurement bases are more fully described in the accounting policies below.

(a) Functional and presentation currency

The financial statements are presented in Australian Dollars, which is also the functional currency of the Company. Cabrini Outreach Limited is an entity to which ASIC Corporations Instruments 2016/191 applies and, accordingly, amounts in the financial statements have been rounded to the nearest dollar.

(b) Comparatives

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

(c) Revenue from contracts with customers

A summary of revenue from major products and services is shown in Note 4. Revenue is recognised when control of the goods or services are transferred to the clients at an amount reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

Donations

Donations received, including cash, goods for resale and other non-monetary donations, are recognised as revenue when the Company gains control, economic benefits are probable, and the amount of the donation can be measured reliably. Nonmonetary donations are recorded at fair value.

Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and comply with all attached conditions. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.

When the Company receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and released to profit or loss over the expected useful life of the asset, based on the consumption of the benefits of the underlying asset.

Interest income

Interest income and expenses are reported on an accrual basis using the effective interest method.

(d) Operating expenses

Operating expenses are recognised in profit or loss upon utilisation of the service or at the date they are incurred.

(e) Income tax

The income of Cabrini Outreach is exempt from Australian income tax under Section 50-5 of the Income Tax Assessment Act 1997.

(f) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

Cash related amounts which are held in term deposit for greater than 3 months are recognised as other financial assets.

(g) Property, plant and equipment

Property, plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows:

Buildings: 10 – 50 years

Furniture and equipment: 3 – 16 years

The residual values, useful lives, and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. Leased assets are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter. An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Company. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.

Only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably are amounts transferred to property, plant and equipment and depreciated thereafter. Repairs and maintenance are charged to the Statement of Profit or Loss and Other Comprehensive Income during the financial period in which they are incurred.

(h) Equity and reserves

The capital fundraising reserve represents donations received for major capital works, and income earned from these investments. Retained earnings include all current and prior period retained profits.

(i) Employee benefits

(i) Short-term employee benefits

Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. Examples of such benefits include wages and salaries, non-monetary benefits and accumulating annual leave. Short-term employee benefits are measured at the undiscounted amounts expected to be paid when the liabilities are settled.

(ii) Other long-term employee benefits

The liability for long service leave is recognised and measured at the present value of the estimated cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account.

For the year ended 30 June 2022, the long service leave liability has been estimated by management and is supported by an independent valuation by an external actuary.

Long service leave liabilities are classified as current when Cabrini:

- expects to settle the liability in its normal operating cycle;

- the liability is due to be settled within twelve months after the reporting period; or

- it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period

(j) Provisions

Provisions are recognised when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will be required from the Company and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.

Any reimbursement that the Company can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

No liability is recognised if an outflow of economic resources as a result of present obligation is not probable. Such situations are disclosed as contingent liabilities, unless the outflow of resources is remote in which case no liability is recognised.

(k) Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the 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 components of investing and financing activities, which are disclosed as operating cash flows.

(l) Significant management judgement in applying accounting policies and estimation uncertainty

The following are significant management judgements in applying the accounting policies of the Company that have the most significant effect on the financial statements.

Estimation uncertainty

The directors evaluate estimates and judgments incorporated into the financial reports 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. Actual results may differ from these estimates. The key areas in which critical estimates are applied are as described below:

(i) Impairment of non-current assets including right of use assets

In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.

Cabrini Outreach assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the reporting entity estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s (CGUs) fair value less costs of disposal (FVLCD) and its value in use (VIU). The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

When assessing VIU, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining FVLCTS, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

Impairment losses of continuing operations are recognised in the Statement of Profit or Loss in expense categories consistent with the function of the impaired asset, except for properties previously revalued with the revaluation taken to Other Comprehensive Income (OCI). For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation.

The Company may perform an impairment test that incorporates COVID-19 risk if there are uncertainties created by the pandemic. The impairment models may adjust for risk via discount rate or the cash flows used, but not in both. This is in compliance with AASB 136.55.

(ii) Long service leave

The liability for long service leave is recognised and measured at the present value of the estimated cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account.

For the year ended 30 June 2022, the long service leave balance has been estimated by management and is supported by an independent valuation by an external actuary.

Long service leave liabilities are classified as current when Cabrini Outreach:

- expects to settle the liability in its normal operating cycle;

- the liability is due to be settled within twelve months after the reporting period; or

- it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period

Cabrini Outreach has disclosed within the notes the split between current and non-current Long Service Leave liabilities on the basis of expected settlement timing, and accordance with AASB 119.

(m) Leases

In accordance with AASB 16, Cabrini Outreach has made the following judgements.

In determining the lease term used to ascertain total future lease payments, Cabrini Outreach considers all facts and circumstances that create an economic benefit to exercise an extension option. Renewal options are only considered to be part of the lease term if the lease is reasonably certain to be extended. Cabrini Outreach has included renewal periods as part of the lease term for all leases as it is reasonably certain these will be extended. This assessment is reviewed if a significant event or change in circumstances occurs which affects this assessment and is also within the control of Cabrini Outreach.

Where Cabrini Outreach cannot readily determine the interest rate implicit in the lease, it uses its incremental borrowing rate (IBR) to calculate the present value of future lease payments.

The IBR is the interest rate that the lessee would have to pay to borrow over a similar term of each lease. Cabrini Outreach estimates the IBR using market interest rates and adjusts these rates to include the effect of the lessee’s own stand-alone credit rating.

4.

No deferred revenue was recognised at 30 June 2022 (2021: $154,471).

5. Cash and cash

For the purpose of the Statement of Cash Flows, cash includes cash on hand and in banks, net of outstanding overdrafts. This is reconciled to the Statement of Financial Position as follows:

6. Trade and other receivables

7. Property, plant and equipment

Reconciliations of the written down values at the beginning and end of the current financial year are set out below:

8. Right of use assets

9. Trade and other payables

10. Provisions

13. Related party transactions

The Company’s related parties include its key management personnel and related entities as described below. Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or received.

14. Key management personnel disclosures

Key management personnel are not employed by Cabrini Outreach, rather executive decisions are taken by executive team members of the company’s parent Cabrini Australia Limited.

For the year ended 30 June 2022, the long service leave balance has been determined by management and is supported by an independent valuation by an external actuary. Cabrini Outreach Limited has classified employee entitlements as current liabilities where it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

For the purposes of disclosure, the external actuary has calculated its best estimate of the expected timing of settlement, as follows:

Directors are not remunerated and act in a voluntary capacity. There were no loans to and from related parties at the current and previous reporting date.

15. Reconciliation of net cash from operating activities to surplus

11. Lease liabilities

The Company did not receive any COVID-19 related rent concessions during the year.

12. Commitments

There were no capital commitments as at 30 June 2022 (2021: $nil).

16. Auditor’s remuneration

The audit fee is charged at a group level to Cabrini Australia Limited.

17. Events subsequent to balance date

There are no matters or circumstances that have arisen since 30 June 2022 that have significantly affected or may significantly affect either:

- the Company’s operations in future financial years;

- the results of those operations in future financial years; or

- the Company’s state of affairs in future years.