FORM building a state of creativity inc
FINAN CIAL R EP O RT
2016
Pg 1
FORM building a state of creativity inc
Pg 3
FORM building a state of creativity inc
2 0 1 6 ANNUAL F INANCIAL STATE M ENTS
Co n t e n t s
At Python Pool, Yuko Fujita, gum tree bark, silver, acrylic paint, from Worn Land, 2016. Photograph by Bewley Shaylor, 2016.
FORM building a state of creativity inc
Statement by Executive Board
1
Income Statement
2
Balance Sheet
3
Cash Flow Statement
4
Statement of Changes In Equity
5
Notes to Financial Statements
6
1. Summary of Significant Accounting Policies
9
2. Gallery Sales, Visitor Centre, CafĂŠ and Spinifex Hill Studio Income
Independent Audit Report
10
3. Operating, Project and Subsidies Grant Income
11
4. Net Surplus
11
5. Prepayments
11
6. Receivables
11
7. Inventories
12
8. Property, Plant and Equipment
13
9. Payables
13
10. Other Current Liabilities
13
11. Provisions
14
12. Retained Surplus
14
13 (a). Components of cash and cash equivalents
14
13 (b). Reconciliation of net surplus to net cash (used in) /provided by operating activities
15
14. Operating Rental / Lease Commitments
15
15. External Project Funds
16
16. Financial Instruments
16
17. Association Details
17
Auditors Independence Declaration 18
FORM building a state of creativity inc
STATE M ENT BY E X ECUTIVE B O A R D
Pg 1
FORM building a state of creativity inc
INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2016
2016 $
2015 $
1,239,031 (676,278)
1,458,936
562,753
719,105
1,219,785 3,512,462 1,120,130 77,415
1,024,062 2,928,618 1,159,888 128,431
525,032 12,802 1,885,181
Sundry income
115,844 14,544 1,726,773 31,320
Total income
8,381,026
8,456,594
(2,297,950) (170,677) (2,637,889)
(2,238,711) (161,415) (2,707,315)
Aboriginal design and artistic development
(657,233)
(526,095)
Regional artistic capacity-building
(252,934)
(265,207)
Marketing and promotion Gallery and retailing
(465,391) (895,209)
(486,601) (1,260,199)
External project expenditure
(738,818)
(790,137)
(8,116,100) (8,116,101)
(8,435,680)
264,925 264,926
20,915
NOTES Sales Revenue from sales
2
Cost of sales
2
Gross profit Other revenue Operating and project grants Sponsorships Project and service fees Membership and workshop fees
3
Other income Donations Interest received Insurance and expense recoveries
Other expenses Administration Depreciation Perth creative development
Total expenses 4, 13
Net surplus
The accompanying notes form part of this financial report. Pg 2
(739,831)
73,475
FORM building a state of creativity inc
BALANCE SHEET AS AT 31 DECEMBER 2016
2016 $
2015 $
950,572 33,777 540,403 212,299 212,298
679,624 98,685 830,516
1,737,050
1,861,464
1,282,700 1,282,699 253,017
1,327,414 286,243
Total non-current assets
1,535,716 1,535,717
1,613,657
Total assets
3,272,766 3,272,767
3,475,121
603,667 1,070,429 57,475
732,709 1,416,939
Total current liabilities
1,731,571
2,198,852
Total liabilities
1,731,571
2,198,852
Net Assets
1,541,197 1,541,196
1,276,270
1,276,270 264,926 264,925
1,255,354
1,541,197 1,541,196
1,276,270
Current Assets Cash and cash equivalents Prepayments Receivables
13(a) 5 6
Inventories
7
Total current assets
252,640
Non-Current Assets Building Property, plant and equipment
8 8
Other
Current Liabilities Payables Other liabilities
9 10
Provisions
11
Equity Prior Year Retained surplus
12
Total Equity
The accompanying notes form part of this financial report. Pg 3
49,203
20,915
FORM building a state of creativity inc
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2016
Cash Flows From Operating Activities Payments to suppliers and employees Goods and services tax paid Operating and project grant receipts Receipts from members Sponsorship received Receipts from sales and other income
2016 $
2015 $
(7, 695, 740)
(8,966,342) (782,284) 949,605 128,431 2,380,547 3,743,019
(848,849) 1,305,368 77,415 3,457,962 2,877,567 669,697
Project fees and services receipts Interest received Input tax credits received
14,544 412,986
1,744,295 12,802 487,997
270,948
(301,930)
Investment-artwork purchases
-
Net cash used in investing activities
-
(113,767) (113,767) -
Net cash (used in)/provided by operating activities
13 (b)
Cash Flows From Investing Activities Fixed assets purchases
Cash Flows From Financing Activities Repayments of financing
-
-
Net cash used in financing activities
-
-
Net (decrease)/increase in cash held
270,948
(415,697)
679,624
1,095,321
950,572
679,624
Cash at the beginning of the financial year 13(a)
Cash at the end of the financial year
Pg 4
FORM building a state of creativity inc
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2016
Retained Earnings Balance at 1 January Net Surplus Balance at 31 December
2016 $
2015 $
1,276,270
1,255,355
264,926 264,925
20,915
1,541,196
1,276,270
The accompanying notes form part of this financial report.
Pg 5
FORM building a state of creativity inc
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016 1. (a)
Summary of Significant Accounting Policies Basis of preparation
This financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board and the requirements of the Association Incorporations Act 1987 of Western Australia. Australian Accounting Standards include Australian Equivalents to International Financial Reporting Standards (AIFRS). The financial report covers FORM building a state of creativity Inc. (FORM) as an individual entity. FORM is an association incorporated in Western Australia under the Associations Incorporations Act 1987 of Western Australia. The financial report is presented in Australian Dollars; has been prepared on an accruals basis; is based on historical costs; and does not take into account changing money values or current values of non-current assets unless otherwise stated. Cost is based on the fair value of consideration given in exchange for assets. The annual financial statements for FORM have been prepared on a Going Concern basis. FORM’s ability to continue as a Going Concern is dependent on the continued funding support from State and Federal Governments and other government bodies together with private entities. The accounting policies noted below have been consistently applied to all periods presented, unless otherwise stated. (b)
Statement of compliance
The financial report complies with AIFRS. Compliance with AIFRS ensures that the financial report is in compliance with International Financial Reporting Standards (IFRS). (c)
Income tax
Income tax has not been provided in this financial report as the association is a not-for-profit organisation for the promotion of art and culture and as such is exempt from income tax under section 50.45 of the Income Tax Assessment Act 1997.
Pg 6
FORM building a state of creativity inc
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016 1. (d)
Summary of Significant Accounting Policies (continued) Property, plant and equipment
Plant and equipment Plant and equipment are recorded at cost less applicable accumulated depreciation and impairment losses. Depreciation Fixed assets are depreciated on a straight line basis, over the assets useful life commencing from the time the asset is held ready for use. Indicative depreciation rates used for each class of depreciable assets are: Class of fixed asset - office furniture & equipment - computer equipment - office and gallery refurbishment - buildings (e)
Depreciation rate 33% and 20% 33% and 20% 20% 4%
Investments
Non-current investments are recorded at cost. The carrying amount of investments is reviewed annually to ensure they do not exceed the recoverable amount. (f)
Employee entitlements
Provision is made for FORM’s employee entitlement liabilities arising from services rendered by employees up to and including balance date. Employee entitlements expected to be settled within one year together with entitlements arising from wages and salaries and annual leave, which will be settled after one year, have been measured at their nominal amount. Other employee entitlements payable later than one year have been measured at the net present value of their estimated future cashflows. FORM adopts the policy of accruing pro-rata long service leave entitlements after an employee has attained seven years continuous service. Contributions are made by FORM to an employee nominated superannuation fund and are charged as expenses when incurred. (g)
Inventories
Inventories are measured at the lower of cost and net realisable value. Costs are assigned on a specific identification basis and include direct costs.
Pg 7
FORM building a state of creativity inc
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
Summary of Significant Accounting Policies (continued)
1. (h)
Leases Lease payments under operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the period in which they are incurred.
(i)
Cash For the purposes of the Cash Flow Statement, cash includes cash on hand, at banks and term deposits.
(j)
Revenue Revenue from the sale of goods is recognized upon the delivery of goods to customers. Operating grant, capital grant and sponsorship revenue is recognized to the extent that the funds have been expended. Unexpended grant and sponsorship money is recorded as a liability. Revenue and expenses related to in-kind sponsorship is recognized in the accounts when the sponsorship is measurable and of a material amount.
(k)
Goods and Services Tax (GST) Revenue, expenses and assets are recognized net of GST, except where the GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST is recognized as part of the cost of acquiring the asset. Receivables and Payables in the balance sheet are shown inclusive of GST. A Business Activity Statement (BAS) is submitted quarterly to the ATO.
Pg 8
FORM building a state of creativity inc
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016 2. Gallery Sales, Visitor Centre, Café and Spinifex Hill Studio Income The Gallery Sales, Visitor Centre, Cafe and SHS commissions are at: 2015 $ 276,329
Cost of sales
2016 $ 62,905 (41,097)
(108,290)
Gross Profit
21,808
168,039
35%
61%
262,991 (178,324)
(197,426)
84,667
92,663
32%
32%
260,394
Cost of sales
236,843 (132,320)
(153,994)
Gross Profit
104,524
106,400
44%
41%
213,587 (138,977)
(122,943)
74,610
67,784
35%
36%
416,545 (165,498)
441,398 (157,178)
251,048
284,220
60%
64%
Perth retail sales
% of sales
Port Hedland retail sales Cost of sales Gross Profit % of sales
Visitor Centre Sales
% of sales
Spinifex Hill Studio Sales Cost of sales Gross Profit % of sales
Pretty Pool Provedore Café Sales Cost of sales Gross Profit % of sales
Cost of sales
46,158 (20,062)
Gross Profit
26,096
The Goods Shed retail sales
290,089
190,727
57%
% of sales Total Sales
1,239,031
1,458,936
Cost of sales
(676,278)
(739,831)
562,753
719,105
45%
49%
Gross Profit Average % of sales
Pg 9
FORM building a state of creativity inc
NOTES NOTES TO THE TOFINANCIAL THE FINANCIAL STATEMENTS STATEMENTS FOR THE FORYEAR THE YEAR ENDED ENDED 31 DECEMBER 31 DECEMBER 2016 2016 3. 1.
1.Operating, Operating, Project and Subsidy Income Project and Subsidy GrantGrant Income
Unex-UnexUnex-UnexNet grant Net grant Net grant Net grant pended pended Grants Grants pended pended income incomeincome income grants grants 2016 2016grants grants 2016 2016 2015 2015 b/f b/f c/f c/f $ $ $ $ $ $ $ $ $ $ Department Department of Culture of CultureCore Core Funding Funding State State VisualVisual Arts Arts 293,904 293,904 & the &Arts the Arts and Craft and Craft Strategy Strategy Organisations Organisations Investment Investment 308,599 308,599 308,599 308,599 Program Program Funding Funding Project 140,050 140,05070,050 70,050 70,000 70,000 15,000 15,000 Project GrantGrant 448,649 448,64970,050 70,050378,599 378,599308,904 308,904
Department Department of Culture of Culture & the&Arts theTotal Arts Total Australia Australia Council Council
Core Core Funding Funding Federal Federal VisualVisual Arts and ArtsCraft and Craft Strategy Strategy Project Project GrantGrant
Australia Australia Council Council TotalTotal Federal Federal Government Government OfficeOffice of theofArts the Arts Department Department of Communication of Communication and the andArts the Arts Federal Federal Government Government TotalTotal OtherOther State State and Local and LocalDepartment Department of Regional of Regional Government Government Funding Funding Development Development Lotteries Lotteries Commission Commission Pilbara Pilbara Develop Develop Commission Commission Goldfeilda Goldfeilda Esperance Esperance Development Development Commission Commission City ofCity Kalgoorlie-Boulder of Kalgoorlie-Boulder Tourism Tourism WA WA
175,712 175,712
175,712 175,712 86,977 86,977
65,000 65,000 240,712 240,712
65,000 65,000 10,000 10,000 240,712 240,712 96,977 96,977 100,000 100,000
250,000 250,000
250,000 250,000
250,000 250,000
250,000 250,000100,000 100,000
110,000 110,000
110,000 110,000500,000 500,000
154,409 154,409 33,320 33,320
154,409 154,409 33,320 33,320 18,18118,181
20,000 20,000
20,000 20,000
9,5459,545 23,200 23,200
9,5459,545 23,200 23,200
350,474 350,474
StateState Government Government TotalTotal
350,474 350,474 518,181 518,181
1,289,835 1,289,83570,050 70,050 1,219,785 1,219,785 1,024,062 1,024,062
TotalTotal Operating Operating and Project and Project GrantGrant Income Income
Pg 10
FORM building a state of creativity inc
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
6 2015 $
2016 $ 0165 4.
Net Surplus The following disclosable items are included within Net Surplus: Remuneration of auditor – annual audit and review and grants acquittal Rental expense on operating rental/leases -minimum rental payments -sub lease payments
Employee benefits
5.
6.
7.
Prepayments Insurances Expenses Paid in Advance
Receivables Trade receivables Accrued income receivable Port Hedland rental bond Other receivable
Inventories Retail outlet stock - Perth Retail Stock – Port Hedland Courthouse Retail Stock – Port Hedland Visitor Centre Retail Stock – Spinifex Hill Studio Retail Stock – Pretty Pool Provedore
Pg 11
10,200
9,000
18,371 94,765 113,136
20,976 77,618 98,594
2,699,349
2,815,211
27,697 6,080 33,777
32,793 65,892 98,685
335,078 203,325 2,000 540,403
276,916 550,000 3,600 830,516
43,242 105,098 61,736 2,222 212,299 212,298
57,626 112,785 63,110 6,740 12,415 252,640
FORM building a state of creativity inc
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016 8. Property, Plant and Equipment Office Equipment $
Year Ended December 2015 Carrying amount (1 January 2015) Additions Written off WDV Less: Depreciation Net carrying amount (31 December 2015) As at 31 December 2015 Property, Plant and Equipment - at Cost Less: Accumulated Depreciation Net carrying amount (31 December 2015) Year Ended December 2016 Carrying amount (1 January 2016) Additions Written off WDV Less: Depreciation Net carrying amount (31 December 2016) As at 31 December 2016 Property, Plant and Equipment - at Cost Less: Accumulated Depreciation Net carrying amount (31 December 2016)
Shop and Gallery equipment $
CafĂŠ $
1,068,527 303,425
30,060
Total $
279,411 78,903 (768) (103,956)
(10,839)
(44,538)
(3,716)
1,365,087 412,387 (768) (163,048)
253,590
6,310
1,327,414
26,344
1,613,658
601,342
54,193
1,416,474
30,060
2,102,069
(347,752)
(47,883)
(89,060)
(3,716)
(488,411)
253,590
6,310
1,327,414
26,344
1,613,658
253,590 121,577 (35,010) (112,368)
6,310
1,327,414
26,344 6,168
(6,310)
(44,714)
(7,285)
1,613,658 127,745 (35,010) (170,677)
227,790
-
1,282,700 1,282,699
25,227
1,535,717 1,535,716
663,464
54,193
1,416,474
36,228
2,170,359
(435,675)
(54,193)
(133,774)
(11,001)
(634,642)
227,790
-
1,282,700 1,282,699
25,277
1,535,717 1,535,716
Pg 12
17,148
Buildings $
FORM building a state of creativity inc
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
9.
2016 $
2015 $
415,500 162,260 25,908 603,667
554,827 165,312 22,570 742,709
70,050 110,309 194,754
28,437
562,500 132,817 1,070,429
600,500 778,002 1,406,939
Carrying amount at 1 January 2016 Net Movement for the year
49,203 8,271
50,190 (986)
Provision for bad debts Carrying amount at 1 January 2016 Net Movement for the year
-
-
57,475
49,203
36
38
Payables Trade payables Payroll and GST payables Project Retentions
10.
Other Current Liabilities State government in advance Federal government in advance Other government bodies Rental income in advance Sponsorships in Advance Other Funds in Advance
11.
Provisions Employee entitlements
Carrying amount at 31 December 2016 Number of employees at 31 December 2016 (Full Time Equivalent)
Pg 13
FORM building a state of creativity inc
NOTES TONOTES THE FINANCIAL STATEMENTS TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 ENDED DECEMBER 2016 FOR THE YEAR 31 DECEMBER 2016 2016
2016
2015
2015
12. Retained 12. Surplus Retained Surplus Retained surplus Retained at surplus the beginning at the beginning of the financial of theyear financial year Net surplus Net forsurplus the year for the year Retained surplus Retained at surplus the end at of the the end financial of theyear financial year
1,276,270 1,276,270 1,255,355 1,255,355 264,926 264,925 264,925 20,915 20,915 1,541,195 1,541,195 1,276,270 1,276,270 1,541,196
13. (a) Components 13. (a) Components of cash and ofcash cashequivalents and cash equivalents Cash on Hand Cash on Hand Cash at Bank Cash at Bank Total cashTotal and cash cashequivalents and cash equivalents
5,356 945,216 950,572
5,356 945,216 950,572
4,131 675,493 679,624
4,131 675,493 679,624
20,915 161,415
20,915 161,415
(b) Reconciliation (b) Reconciliation of net surplus of net tosurplus net cash to(used net cash in)/provided (used in)/provided by operating by operating activities activities Net Surplus Net Surplus Depreciation Depreciation Changes inChanges assets and in assets liabilities: and liabilities: Decrease/Decrease/ (increase) in (increase) receivables in receivables Decrease/Decrease/ (increase) in (increase) inventories in inventories Decrease/Decrease/ (increase) in (increase) prepayments in prepayments Decrease/Decrease/ (increase) in (increase) other assets in other assets (Decrease)/ (Decrease)/ increase inincrease payablesin payables (Decrease)/ (Decrease)/ increase inincrease other liabilities in other liabilities (Decrease)/ (Decrease)/ increase inincrease provisions in provisions Net cash (used Net cash in)/provided (used in)/provided by operating by activities operating activities
Pg 14
264,926 170,677
264,926 170,677
290,114 290,114 (445,886) (445,886) 40,341 40,341 (31,450) (31,450) 64,907 64,907 (23,222) (23,222) (92,735) (92,735) (409,986) (409,986) (1,535,981)(1,535,981) 304,253 304,253 1,060,429 1,060,429 9,250 9,250 8,271 8,271 (986) (986) 270,948 270,948 (415,697) (415,697)
FORM building a state of creativity inc
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
14.
2016 $
2015 $
113,136 12,177 17,977 143,290
84,562 9,457 2,304 96,322
Operating Rental / Lease Commitments Within one year After one year but not later than two years After two years but not later than five years
The Station Masters House property lease was entered into for 5 years starting the 1st of July 2016, with the option to extend to 2026 if required. Rent is payable in advance and subject to an annual review and adjustment if applicable. No staff housing rents have been included in the above commitments. 15.
External project (hard infrastructure) funds The fund balances for hard infrastructure projects at 31 December 2016 are: 2016 $
2015 $
Current assets Cash and Cash Equivalents Trade Receivables
-
-
Current liabilities Trade Payables Unexpended Project funding
-
-
Net asset
-
-
Pg 15
FORM building a state of creativity inc
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016
16.
Financial Instruments (a)
Cash at bank and term deposits Cash at bank are attracting floating interest rates of between 0.00% and 1.10% and term deposits are between 2.1% and 2.35%.
(b)
Interest rate risk FORM is exposed to interest rate risk due to the fact that its cash deposits are held in floating interest rate facilities. Other financial assets and liabilities such as trade creditors, other creditors and trade debtors are non-interest bearing.
(c)
Credit risk The maximum credit risk exposure to recognised financial assets of FORM, is the carrying amount, net of any provision for non-recoverability. These are disclosed in the balance sheet and notes to the financial statements. FORM does not have any material credit risk exposure to any other debtor or group of debtors under financial instruments entered into by FORM.
(d)
17.
Net fair values The net fair value of the financial assets and liabilities approximates their carrying value.
Association Details The principal place of business of the association is: FORM building a state of creativity Inc. 357 Murray Street Perth WA 6000
Pg 16
FORM building a state of creativity inc
Pg 17
FORM building a state of creativity inc
Pg 18
FORM building a state of creativity inc
www. fo r m . n et . a u
Pg 19