arcs australia

ARCS AUSTRALIAANNUAL REPORT 2017-18

ARCS AUSTRALIAANNUAL REPORT 2015/16

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Number of members: 1792

Educational events held: 133 Number of new events: 6

Major Conference: 1

Conference attendees: 990

Conference day visits: 1991

Number of online learning students: 639

Interest area meeting attendance: 1862

Quality rating of education events: 93%

2017-18 PERFORMANCE HIGHLIGHTS

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2017-18 PERFORMANCE HIGHLIGHTS

VISION A vibrant and engaged membership adding value to the healthcare sector

MISSION To bring together industry, government and academia through education, networking and forums for the benefit of the healthcare sector

GOALS Our goals are to:

• To have a sustainable, diverse, connected and motivated professional workforce

• To have a broad and effective reach in the healthcare sector

• To promote best practice implementation in digital strategy across the sector

• To educate around the guidances to enable the adoption of new technologies

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EVENTS AND INITIATIVES We encourage and foster exchange of information via leading edge conferences,

forums, seminars and networking events.

During the 2017-18 financial year we had a number of successful events.

We act in an impartial and neutral framework to provide awareness of relevant government, research and industry initiatives. From this we provided submissions in relation to:

• Temporary skilled (457) visas

• R&D tax incentive legislation

• Pre-budget submission co-ordinated with other sector peak bodies

The Sydney conference was held from 22–24 August 2017 with the theme “Building global resilience locally”. Feedback was overwhelmingly positive with a focus on the impact of some critical changes to our sector including MMDR, private health reforms and ICH-GCP.

We initiated and delivered: • CRO forum

• Safety Monitoring & Reporting summit

• Executive Roundtable – international regulatory affairs

• CEO Breakfasts - leadership

We jointly delivered/sponsored: • Pharma 4.0 Melbourne Summit on GMP

• Research Australia – Canberra Pre Election Summit and government submission

ARCS lead a successful MTP Connect grant application – aiming to grow the talent pool of clinical researchers – the CRITERIA Program.

We continue to build collaborations and partnerships with key stakeholders that will boost our offerings to members.

Four editions of Cognitio were published.

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EDUCATIONALHIGHLIGHTS We continue to deliver high quality, industry led, case study driven workshops,

seminars and Interest Area meetings. These activities are vital for the ongoing professional development of our sector and we are actively developing and growing new content and expanding our technical expertise. In house Good Clinical Practice (GCP) training is well received by companies who need to train their teams and obtain accreditation in GCP.

SECTORREPRESENTATIONS The ARCS office staff and CEO worked on a number of initiatives and activities

related to the therapeutics environment and healthcare.

These involved:

• Leadership in the R&D Taskforce – an initiative of Medicines Australia and MTAA

• Participation in the Ausbiotech conference in Melbourne (October 2017)

• Participation in the SCRS meeting in Melbourne (July 2017)

• Education Affiliate to MTP Connect

• Scientific Advisory Committee for the Pharmaceutical & Medical Device Development Masters, Graduate Diploma and Graduate Certificate Program at the

University of Sydney.

THE OFFICE AND TEAM We welcomed Gary McNicol (initially Project Manager for the CRITERIA Program,

now COO), Marion Demann (Director Marketing and Communications) and Ellen MacMahon (Events Co-ordinator) to the team.

Liga Hegner (Membership Manager) left us on the 9 February to explore other opportunities in the education sector. Belinda King (Membership and Volunteer Officer) resigned following her maternity leave and Carolina Diaz also left.

THE FUTURE With the new Vision and Mission, ARCS will continue to focus on building value for members and the health sector. We will increase our capacity to advocate for improvements and to enhance sector competitiveness in Australia.

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PRESIDENT’S REPORT

Welcome to the 2017-18 ARCS Australia Annual Report. The past 12 months have been a tremendous period for ARCS, and following last year’s AGM, I stepped into the role of President of the ARCS Board in January 2018. Until that time, Mary Nteris had been the President for the previous two years. Thus the last 12months results have been a joint effort between Mary and myself, and I write this President’s Report with that in mind. This year’s report on the outcomes of the year and the foundations of this success reflect the result of Mary’s role together with the rest of the Board, the CEO, the ARCS office, and the dedicated volunteers. Without the commitment of so many people, ARCS would not be in the enviable position it is today.

The financial year 2017-18 was a year of consolidation for ARCS. We have again taken important steps in setting a strategic course that will position the association to capture emerging opportunities in our rapidly-changing healthcare environment.

ARCS’s strategic transformation is well-established. Members are aware of our endeavour to build strategic partnerships with key stakeholders in our sector. Over the past year, ARCS has continued to build this partnership offering and has attracted four key partnerships, a number which continues to grow.

ARCS is well-positioned to advocate for the benefit of our sector. One such example, is the Clinical Research Organisation (CRO) forum held in November 2017, which brought together the sector to identify and to explore common issues. One of the key outcomes of this was the successful MTP Connect grant application, which is aimed at building the pool of talent engaged in clinical trials. The Board is very proud of the leadership ARCS has shown in delivering this program and the support we have received from our consortium members.

ARCS has furthered the commitment to deliver a broad range of events targeted to our more experienced members. The executive stream designed for our Annual Conference and the ARCS CEO breakfasts are testaments to the association meeting a wider scope of member needs.

This financial year ARCS has reported an overall break-even position, which was part of our three-year plan to get the organisation sustainable after two years of losses. We communicated this commitment to our members at last year’s AGM. It is a testament to the ARCS team that this important milestone was achieved, and the ARCS team has worked hard to achieve this and should be commended.

ARCS membership numbers, event attendance records and member feedback continue to support that the core activities of our business are sound.

A detailed financial audit was conducted at the end of the financial year, in accordance with the Australian Charities and Not-for-profits Commission standards, and as a matter of good governance. The audit confirms that the association is in sound financial shape, with healthy reserves. We are in a position to improve the association’s profitability and this is a continued focus over the short and medium term.

The ARCS Board was pleased to appoint Naomi Beveridge to the ARCS Board, as an Independent Non-Executive Director for a 12 months term, under clause 11.1 (d) of the Constitution. Naomi is currently working with PwC as a senior manager, focusing on the healthcare sector and has worked within both the Australian and UK hospital systems. Naomi has contributed significantly to the Board, providing the Board with the diversity of experience with her financial services background.

On behalf of the ARCS Board, I would like to extend our appreciation to the ARCS CEO, the ARCS office and lastly, but certainly not least, to all the volunteers who have contributed and supported the association throughout this very successful year.

George Papadopoulos ARCS President

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CEO’S REPORT

I am very pleased to present the ARCS Australia Ltd Annual Report for the financial year 2017-18. This report, together with the audited financials and the President’s and Directors’ reports, will provide a summary of the year.

This was good year for ARCS. We consolidated and invigorated the organisation in line with our new Vision and Mission which was approved last year.

This year the Board approved a new 2018-23 strategy that builds on the Vision for us to be:

‘A vibrant and engaged membership adding value to the healthcare sector’.

Achieved through our Mission:

To bring together industry, government and academia through education, networking and forums for the benefit of the healthcare sector.

The 2018-23 strategic objectives are:





This strategy has been central to activities and events we have delivered whilst ensuring organisational sustainability.

As mentioned in the President’s report, the organisation delivered the planned return to break-even this year. This position was part of a three-year plan to ensure the organisational sustainably through good management and fiscal responsibility. We are therefore pleased to report a small profit this financial year (see the financial statement).

Inaugural CrO fOrum

ARCS established the CRO steering committee to further understand and meet the needs of this critical, but under represented, research stakeholder. Since its inception, there has been significant interest from a number of key stakeholders (particularly from government) on the work of the committee regarding the challenges and constraints faced by CROs. The committee has engaged broadly, initially via the collection of data using online surveys and subsequently via the inaugural ARCS CRO forum.

This year also saw the establishment of the following cross-functional sector working groups to address sector pain points:

• Development and growth of the talent pool

• Promotion of the clinical research sector

• The digitisation of health

• Assisting investigational sites reach their full potential.

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CRITERIA program

The CRITERIA program (see page 10) was launched in 2017 following a successful grant application from MTP Connect. This project evolved out of the intelligence gathered from the CRO forum and is designed to build the talent pool of people working in the clinical trials sector. ARCS is very proud to be the lead organisation with 14 consortium members supporting the project. The program is due for completion in 2019 but we anticipate the program will continue beyond this due to the success we have delivered so far.

PrOvIdIng leadershIP tO the seCtOr

We have convened the inaugural CEO peak body meeting. The purpose of this meeting was to ensure that that there is a forum to work collaboratively across the sector on issues that cut across all peak bodies. The CRO steering committee has also taken leadership positions on a number of issues which have included hosting an executive leadership forum with government at the ARCS conference to discuss these constraints as well as making a submission to government regarding the changes to the 457 visa scheme and the R&D Tax Incentive changes.

This year we have provide advice as a member of the following committees:

• GMP TGA GMP Annual Industry Forum Organising Committee

• Research Australia – pre-election summit

• Advisory Committee for the Pharmaceutical & Medical Device courses at Sydney University

• Member of the R&D Task Force.

leverage Our PartnershIP PrOgrams

ARCS has been actively building partnerships with key stakeholders in the healthcare sector. We believe that we can make a difference to the sector and adding value to our members for example through education opportunities which have included:

• ARCS/DIA Application of ICH-GCP summit

• Copyright webinar series

• Global approach to clinical evidence workshop.

The ARCS Partnership program initiated last financial year has developed well and is already adding significant value to our members through an expanded workshop offering. In this financial year, we re-signed our current partners and signed four partnerships and anticipate that this will grow in momentum as we roll out our strategy and new programs. We express our thanks to the partners who have taken the first steps with us in this journey and believe that greater value to our members will be achieved through these growing partnerships.

We continue to work closely with RACI, APPA, ISPE and others to ensure that we are harmonised in what we do and say in the sector.

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resPOnd the ChangIng PharmaCOvIgIlanCe PrOfessIOnal envIrOnment

There have been a number of major changes in pharmacovigilance, with the introduction of the TGA pharmacovigilance inspection program and revision to the safety monitoring and reporting requirements for clinical trials. We responded to these changes with very practical, hands-on sessions to assist our members navigate these major changes.

sChOlarshIP wInner

We were very pleased to announce the winner of the 2017 Katrina Campion Developing Leaders Program Scholarship, Ashleigh Prest, from STADA Pharmaceuticals Australia for her application titled “Strategy for the cultivation of talent amongst students and young professionals within ARCS and across STEM specialties”. We look forward to seeing the outcomes from Ashleigh’s application.

As per last year, I would like to say a big thank you to our ARCS Board, the convenors, facilitators, volunteers and so many members who are so integral to the running of the organisation together with the wonderful ARCS staff. Thanks for your input throughout the year and I look forward to your continued support in the years to come.

Shanny Dyer PhD, GAICD

Chief Executive Officer

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MTP ConneCT granT - CrITerIa PrograM

In October 2017, ARCS was successful in its grant application to MTP Connect to fund a bold initiative aimed at strengthening Australia’s competitive edge in global clinical research - the CRITERIA program.

This innovative two-year ARCS Australia initiated program aims to build a formal national internship training program to provide skilled and industry-ready participants by exposing them to companies engaged in clinical research. With $500,000 in matched-funds, the project will initially deliver up to 30 interns through a program of industry-led education, mentoring and internship over a two-year period. This will result in strengthening Australia as an attractive clinical research destination and expand workforce skills in the Medical Technologies and Pharmaceutical space.

This pioneering project is led by ARCS Australia, and includes consortium members from:• Clinical Network Services• George Clinical• PPD Australia• Seerpharma• IQVIA (previously QuintilesIMS)• Sydney Partnership for Education, Research and Enterprise (SPHERE)• Monash University• St Vincent’s Hospital, Melbourne• Novotech• University of NSW• OnQ Recruitment• University of Sydney• Pharma to Market• University of Queensland

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Following over sixty expressions of interest and a rigorous selection process, the first cohort of candidates commenced the CRITERIA training program in early June 2018 with the first internships planned from September 2018. The second cohort will commence the training program in October 2018 with a view to further internships commencing January 2019.

The CRITERIA internship curriculum includes:

• Overview of the Medical Technology, Biotechnology, and Pharmaceutical sector

• Overview of drug development

• Applied GCP training for investigational sites and sponsor representatives E6(R2)

• Essential and practical GCP training for new monitors and CRAs

• NHMRC - Ethics review in Australia and the HREA

• NHMRC - Good practice process for site assessment and authorisation phases of clinical trials research governance

• Participant recruitment: Be proactive not reactive

• Essential documents and good documentation practice

• Introduction to pharmacovigilance: A theoretical approach

• NHMRC - Guidance for safety monitoring and reporting in clinical trials involving therapeutic goods - Recent changes

• Overview of phase I clinical trials for regulatory professionals

• Preparing for a sponsor audit

• Best practises of the clinical trial process from study hand-off to close out for CRAs, from client/CRO perspective

• Essential GCP for sponsor representatives

• Therapeutic area training

The CRITERIA program is supported by the Federal Government’s Department of Industry, Innovation and Science and has gained preliminary support from Interns Australia who are also very keen to lend their organisation’s accreditation to the CRITERIA program. Interns Australia is the national support and advocacy body for interns and students undertaking work placements in Australia. Founded in 2013, Interns Australia works with interns, employers, industry, governments and the community to promote the value of quality and equitable internships. Current partners of Interns Australia include, The City of Sydney Council, General Electric, the Federal Department of Infrastructure and Regional Development, and the Australian Institute of Management.

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DIreCTorS’ rePorT

The directors of ARCS Australia Limited (ARCS) present this report and the Financial Statements of the Company for the year ended 30 June 2018.

1. DIRECTORS 2017-18

The details of the directors who held office during or since the end of the financial year are provided below. Four board meetings in total were held from July 2017 to June 2018.

In November 2017, four positions were declared vacant with four directors standing down. The board declared all positions open. The ARCS office received six nominations for four (4) vacant positions and therefore an election was called. Elizabeth Joshi, Alex Leung and George Papadopoulos were re-elected to the board. Mary Nteris stood down. For the first time, an e-voting system was used which provided a secure platform for all members to vote. Naomi Beveridge was appointed by the board under Clause 11.1 (b) of the constitution, which provides the board the option to appoint an independent director. Naomi Beveridge commenced her role on the board on 13 November. Following the results of the election, Kevin Wightman commenced his term on the 23 November.

Board Meetings 1 July 2017- 30 June 2018

Commencement Cessation A (B) Key Activities

Elizabeth Joshi Bayer ANZ Sandoz

26 Nov 2015 3 (4) Membership & Education Committee

Jessica Keast Independent Consultant 30 Nov 2016 4 (4) Membership & Education CommitteeCorporate Governance Committee

Robert Kent The Kinghorn Cancer Centre

31 July 17 4 (4) Membership & Education Committee

Alex Leung CareFusion Hologic

26 Nov 2015 4 (4) Chair, Audit & Risk Management CommitteeCompany Secretary

Mary Nteris Pfizer Independent Consultant

1 Jul 2014 23 Nov 2017 2 (2) President (23 Nov 2017)Chair, Corporate Governance CommitteeAudit & Risk Management Committee

Kaylene O’Shea Celgene 13 Nov 2014 3 (4) Chair, Corporate Governance Committee

George Papadopoulos

Emerald Corporate Group

26 Nov 2014 4 (4) President (24 Nov 2017)Membership & Education Committee Corporate Governance Committee

Naomi Beveridge PwC 13 Nov 2017 3 (3) Audit & Risk Management Committee

Kevin Wightman Consultant 23 Nov 2017 2 (2) Membership & Education Committee

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2. PRESIDENT

Mary Nteris held the role of President until 23 November 2017. As Mary was not re-elected, George Papadopoulos was elected by the board with Kaylene O’Shea maintaining the position of Vice President.

3. COMPANY SECRETARY

Alex Leung has held the role of company secretary since 13 December 2016.

4. SHORT- AND LONG- TERM OBJECTIVES AND STRATEGY

In 2017, the board approved a new vision and mission. These are supported by the development of the 2018-2023 strategy.

The strategy has 4 key goals:





Integral to our strategy are our values of integrity, excellence, leadership and influence. With these values in mind, we have undertaken the principle activities.

5. PRINCIPLE ACTIVITIES

ARCS Australia Ltd is a national, membership-based organisation focused on the development and growth of the healthcare sector. ARCS provides education, career pathways, professional development and advocacy to the healthcare sector.

Our membership is made up of individuals working in regulatory affairs, clinical research, health economics, medical information and other disciplines who work in the development and quality use of therapeutic goods. ARCS members are based in industry, academia, medical research institutes, government, hospitals and patient groups.

Through its members ARCS has a broad and effective reach throughout the healthcare sector, and provides a neutral forum to develop, agree and implement aligned policies and initiatives.

ARCS and its members are dedicated to improving the quality of life of healthcare consumers.

The company’s principal activities during the year were:

• Holding the annual ARCS 2017 conference in August. This event covered clinical research, regulatory affairs, health economics and Quality/GMP

• The delivery of workshops, interest area meetings, peer-to-peer events, webinars and networking events

• New to our activities was the CRO Forum

• Representation of members interest at government meetings and forums.

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These activities have assisted the company in achieving its objectives by:

• Providing high-quality, relevant, and current education programs that are targeted to specific member groups

• Providing opportunities for members to exchange information and collaborate with peers from the sector

• Providing information relevant to members

• Representing member interests in significant areas

• Providing an interactive website that hosts a multitude of member only resources, training material, collaborative forum and professional development tracking process.

6. PARTNERSHIPS

In 2016, the board approved the development of partnerships with key stakeholders. The purpose of these partnerships was to strengthen the organisations ability to maintain value and relevance to the Australian market place looking to ensure:

• Collaboration between industry, government and academia hospitals and MRI’s to improve the clinical research framework

• Expanded relationship with key government regulators such and TGA and OGTR

• Ability to influence the direction of the sector both nationally and internationally.

By the end of June 2018, partnerships were established with:

• On Q Recruitment

• Extedo

• (IQVIA) QuintilesIMS

• CopyRight Agency

• Frost & Sullivan (Conference only)

Collaborative relationships in place with:

• RACI

• APPA

• SCRS

• MTP Connect

• ISPE

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7. PERFORMANCE MEASURES

The company measures performance as follows:

• 1792 Number of members

• 133 Educational events held

• 6 Updated/new events

• 1 Conference

• 990 Attendees at conference (1911 day visits)

• 639 Online learning

• 1862 Attendance at interest area meetings

• 93% Quality rating of education events

8. MEMBERS’ GUARANTEE

In accordance with the Company’s constitution, each member is liable to contribute an amount not exceeding $10.00 in the event that the Company is wound up. On the basis of membership numbers at 30 June 2018, the total amount members would contribute is $17,920.

9. AUDITORS’ INDEPENDENCE DECLARATION

The auditor’s independence declaration for the year ended 30 June 2018 has been received and is attached. This Directors’ Report is made and signed in accordance with a resolution of the Board of Directors made pursuant to the Australian Charities and Not for Profit Commission (ACNC).

_____________________________ George Papadopoulos Director

Dated: This day of 31 October 2018

ARCS AUSTRALIA LIMITED ABN 25 050 334 444

FINANCIAL REPORT ‐ 30 JUNE 2018

CONTENTS

Statement of Financial Position 1

Statement of Profit or Loss and Other Comprehensive Income 2

Statement of Changes in Funds 3

Statement of Cash Flows 4

Notes to the Financial Statements 5

Directors’ Declaration 15

Independent Auditor’s Report 16

ARCS AUSTRALIA LIMITED

ABN 25 050 334 444

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2018

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2018 2017Note $ $

ASSETSCurrent assetsCash and cash equivalents 6 406,162 399,787 Trade and other receivables 7 626,005 148,518 Financial assets 8 941,048 902,132

Total current assets 1,973,215 1,450,437

Non‐current assetsProperty, plant and equipment 9 8,469 19,968 Intangible assets 10 58,285 78,871

Total non‐current assets 66,754 98,839

TOTAL ASSETS 2,039,969 1,549,276

LIABILITIESCurrent liabilitiesTrade and other payables 11 1,073,318 573,354 Provisions 12 91,885 119,266

Total current liabilities 1,165,203 692,620

Non‐current liabilitiesProvisions 12 6,030 ‐

Total non‐current liabilities 6,030 ‐

TOTAL LIABILITIES 1,171,233 692,620

NET ASSETS 868,736 856,656

FUNDSAccumulated funds 817,355 823,728 Financial assets reserve 51,381 32,928

TOTAL FUNDS 868,736 856,656

The accompanying notes form part of these financial statements


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2018

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2018 2017Note $ $

Revenue 4 2,092,113 1,579,759

2,092,113 1,579,759 ExpensesAdministration and other expenses (397,168) (403,435) Course expenses (601,482) (489,325) Depreciation and amortisation 5 (34,472) (21,103) Employee costs 5 (883,701) (1,061,860) Project funding (65,585) ‐ Occupancy costs (116,078) (109,825)

(2,098,486) (2,085,548)

Surplus (deficit) before income tax (6,373) (505,789)

Income tax expense ‐ ‐

Surplus (deficit) for the year (6,373) (505,789)

Other comprehensive income

Items that may be reclassified subsequently to profit or lossFair value gains on available‐for‐sale financial assets 18,453 32,928

Total other comprehensive income for the year 18,453 32,928

Total comprehensive income (loss) for the year 12,080 (472,861)



STATEMENT OF CHANGES IN FUNDS


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Accummulated

Funds

Financial

Assets ReserveTotal

$ $ $

Balance at 1 July 2016 1,329,517 ‐ 1,329,517

Comprehensive incomeSurplus (deficit) for the year (505,789) ‐ (505,789) Other comprehensive income ‐ 32,928 32,928 Total comprehensive income (loss) for the year (505,789) 32,928 (472,861)

Balance at 30 June 2017 823,728 32,928 856,656

Balance at 1 July 2017 823,728 32,928 856,656

Comprehensive incomeSurplus (deficit) for the year (6,373) ‐ (6,373) Other comprehensive income ‐ 18,453 18,453 Total comprehensive income (loss) for the year (6,373) 18,453 12,080

Balance at 30 June 2018 817,355 51,381 868,736



STATEMENT OF CASH FLOWS


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2018 2017Note $ $

Cash flows from operating activitiesReceipts from customers and government 2,107,983 1,979,432 Payments to suppliers and employees (2,105,197) (2,049,562) Interest and investments received 26,439 14,783

Net cash flows from operating activities 29,225 (55,347)

Cash flows from investing activitiesProceeds from sale of financial assets ‐ 120,000 Purchase of property, plant and equipment (1,548) (87,858) Purchase of Intangible assets (839) ‐ Purchase of financial assets (20,463) ‐

Net cash flows from investing activities (22,850) 32,142

Net increase (decrease) in cash and cash equivalents 6,375 (23,205)

Cash and cash equivalents at the beginning of the financial year 399,787 422,992

Cash and cash equivalents at the end of the financial year 6 406,162 399,787


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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018

Note 1 ‐ Reporting entity The financial report includes the financial statements and notes of ARCS Australia Limited. ARCS Australia Limited is registered as a company limited by guarantee and not having a share capital under the provisions of the Australian Charities and Not‐for‐profits Commission Act 2012. The financial statements were approved by the Board of Directors on 11 September 2018. Note 2 ‐ Basis of preparation Statement of compliance ARCS Australia Limited has adopted Australian Accounting Standards ‐ Reduced Disclosure Requirements as set out in AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010–2: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements. These financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards ‐ Reduced Disclosure Requirements and 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. 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. Basis of measurement The financial statements, except for the cash flow information, 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. Currency and rounding of amounts The financial statements are presented in Australian dollars, which is the company’s functional and presentation currency. Comparatives Where required by Accounting Standards or to achieve consistency in financial statements presentation, the prior year financial comparatives have been adjusted to conform with current year disclosures and allow comparison with current financial year disclosures. Critical accounting estimates and judgements The Directors evaluate estimates and judgements 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.



Note 2 ‐ Basis of preparation (continued) Critical accounting estimates and judgements (continued) Key estimates Impairment The Directors assess impairment at the end of each reporting period by evaluation of conditions and events specific to the company that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value‐in‐use calculations which incorporate various key assumptions. Long service leave provision The liability for long service leave is recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of rates and pay increases through promotion and inflation have been taken into account. New and revised standards that are effective for these financial statements A number of new and revised standards are effective for annual periods beginning on or after 1 July 2017, however none have significantly impacted the company’s financial statements. New standards and interpretations not yet adopted Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2018 reporting period and have not been early adopted by the company. These include:

‐ AASB 9 Financial Instruments (effective for the year ending 30 June 2019) ‐ AASB 15 Revenue from Contracts with Customers (effective for the year ending 30 June 2020) ‐ AASB 16 Leases (effective for the year ending 30 June 2020) ‐ AASB 1058 Income of Not‐for‐profit Entities (effective for the year ending 30 June 2020)

The Board’s assessment of the impact of these new standards (to the extent applicable to the company) is that none are expected to significantly impact the company’s financial statements in future reporting periods. Note 3 ‐ Significant accounting policies The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. Income Tax ARCS Australia Limited is a not‐for‐profit Charity & public educational institution and it is exempt from income tax under Division 50 of the Income Tax Assessment Act 1997.



Note 3 ‐ Significant accounting policies (continued) 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. Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. All revenue is stated net of the amount of goods and services tax (GST). Revenue is recognised for the major business activities as follows: Sales revenue Revenue from member subscriptions, seminars, training sessions, workshops and advertising is recognised when the amount of revenue can be measured reliably and it is probable that it will be received by the Company. Revenue in advance is accounted for when invoices are raised, or funds are received in respect of events occurring in the subsequent financial year. Interest Interest revenue is recognised as it accrues using the effective interest method. Other revenue Other revenue is recognised when it is received or when the right to receive payment is established. Expenditure All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Management and administration costs are those incurred in connection with administration of the company and compliance with constitutional and statutory requirements. Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short‐term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less a provision for impairment. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for impairment is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of receivables.



Note 3 ‐ Significant accounting policies (continued) Property, plant and equipment Recognition and measurement Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of profit or loss and other comprehensive income. Depreciation The depreciable amount of all property, plant and equipment including buildings, 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. The depreciation effective life used for each class of depreciable assets is:

Office equipment & furniture 3 ‐ 10 years Software 4 years Office fitouts 5 years

The assets’ residual values 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. Financial instruments Initial recognition and measurement Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions to the instrument. For financial assets this is equivalent to the date that the company commits itself to either purchase or sell the asset. 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. 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: (i) the amount at which the financial asset or financial liability is measured at initial recognition; (ii) less principal repayments; (iii) 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 (iv) less any reduction for impairment.



Note 3 ‐ Significant accounting policies (continued) Financial instruments (continued) 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. Non‐derivative financial assets The company classifies its non‐derivative financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held‐to‐maturity investments, and available‐for‐sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its non‐derivative financial assets at initial recognition and re‐evaluates this designation at each reporting date. Financial assets at fair value through profit or loss This category has two sub‐categories: financial assets held for trading, and those designated at fair value through profit or loss on initial recognition. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. The policy of management is to designate a financial asset if the possibility exists that it will be sold in the short term and the asset is subject to frequent changes in fair value. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the end of the reporting period. Held‐to‐maturity investments Held‐to‐maturity investments are non‐derivative financial assets with fixed or determinable payments and fixed maturities that the company’s management has the positive intention and ability to hold to maturity. This includes the capital index bonds and deposits held with financial institutions with original maturity dates of greater than twelve months held by the company. Available‐for‐sale financial assets Available‐for‐sale financial assets, comprising principally marketable equity securities, are non‐derivatives that are either designated in this category or not classified in any of the other categories. They are included in non‐current assets unless management intends to dispose of the investment within 12 months after the end of the reporting period. Fair value estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The company only holds financial instruments that are traded in an active market. The fair value of financial instruments traded in active markets (such as publicly traded securities and available‐for‐sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the company is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price.



Note 3 ‐ Significant accounting policies (continued) Financial instruments (continued) The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the company for similar financial instruments. Impairment At the end of each reporting period, the Directors assess whether there is objective evidence that a financial instrument has been impaired. In the case of available‐for‐sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the statement of comprehensive income. De‐recognition Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the company no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non‐cash assets or liabilities assumed, is recognised in profit or loss. Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of profit or loss and other comprehensive income on a straight‐line basis over the period of the lease. Lease incentives are recognised in the books of the lessee and amortised over the lease period on a systematic basis. 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 amounts normally paid within 30 days of recognition of the liability. The carrying amount of trade and other payables is deemed to reflect fair value. Employee benefits Provision is made for the company’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. 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 high quality corporate bonds with terms to maturity that match the expected timing of cash flows.



Note 3 ‐ Significant accounting policies (continued) Provisions Provisions are recognised when the company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions recognised represent the best estimate of the amounts required to settle the obligation at the end of the reporting period.

Fair value of intangible assets The estimated useful life of the database and related website is estimated at 4 years from the date on which the asset was first completed and ready for use. Should that useful life vary (up or down), then the resulting provision for amortisation mat have a material impact on that intangible asset.


NOTES TO THE FINANCIAL STATEMENTS


12

2018 2017$ $

Note 4 ‐ Revenue

RevenueMembership subscriptions 371,542 398,053 Education activities 1,460,587 1,022,561 Grants revenue 65,585 ‐ Partnership income* 73,642 100,544

1,971,356 1,521,158

Other revenueInterest income 14,268 18,230 Investments revenue 13,911 34,160 Other revenue 92,578 6,211

120,757 58,601

Total revenue 2,092,113 1,579,759

* A nominal amount of membership subscriptions have been included in partnership income.

Note 5 ‐ Expenses

Depreciation and amortisationDepreciation expense 13,047 15,116 Amortisation expense 21,425 5,987

Total depreciation and amortisation 34,472 21,103

Employee benefits expense 883,701 1,061,860

Note 6 ‐ Cash and cash equivalents

Cash at bank and on hand 406,162 399,787

Total cash and cash equivalents 406,162 399,787

Note 7 ‐ Trade and other receivables

Current

Trade receivables 382,548 125,084

Other receivables 209,027 10,246 Prepayments 34,430 13,188

Total current trade and other receivables 626,005 148,518

Note 8 ‐ Financial assets

CurrentAvailable‐for‐sale financial assetsHeld to maturity investments 468,413 461,835 Managed funds 472,635 440,297

Total financial assets 941,048 902,132

Movements in carrying amountOpening net carrying amount 902,132 989,204 Additions 20,463 ‐ Disposals ‐ (120,000) Revaluations 18,453 32,928 Closing net carrying amount 941,048 902,132




13

Note 9 ‐ Property, plant and equipment Office Fitout Equipment Total

$ $ $

At 30 June 2017Cost 30,000 83,936 113,936 Accumulated depreciation (21,000) (72,968) (93,968)

Net carrying amount 9,000 10,968 19,968

Movements in carrying amountsOpening net carrying amount 9,000 10,968 19,968 Additions ‐ 1,548 1,548 Depreciation charge for the year (6,000) (7,047) (13,047) Closing net carrying amount 3,000 5,469 8,469

At 30 June 2018

Cost 30,000 79,069 109,069 Accumulated depreciation (27,000) (73,600) (100,600)


Note 10 ‐ Intangible assets

Software

Website

Development Total

$ $ $

At 30 June 2017Cost 3,340 81,518 84,858 Accumulated amortisation (1,688) (4,299) (5,987)


Movements in carrying amountsOpening net carrying amount 1,652 77,219 78,871 Additions ‐ 839 839 Amortisation charge for the year (836) (20,589) (21,425) Closing net carrying amount 816 57,469 58,285

At 30 June 2018

Cost 3,340 82,358 85,698 Accumulated amortisation (2,524) (24,889) (27,413)

Net carrying amount 816 57,469 58,285

2018 2017$ $

Note 11 ‐ Trade and other payablesCurrentTrade payables 35,399 11,588 Income in advance 741,830 468,137 Liabilities to employees 17,549 22,314 Other payables 278,540 71,315

Total current trade and other payables 1,073,318 573,354




14

2018 2017$ $

Note 12 ‐ Provisions

CurrentEmployee entitlements 91,885 119,266

Total current provisions 91,885 119,266

Non‐currentEmployee entitlements ‐ long service leave 6,030 ‐

Total non‐current provisions 6,030 ‐

Note 13 ‐ Key management personnel compensation

414,487 401,893

Note 14 ‐ Commitments

Not later than one year 56,508 110,820 Later than 1 year not later than 5 years ‐ 56,508

56,508 167,328

Note 15 ‐ Contingent liabilities

At balance date the Directors of the company are not aware of the existence of any contingent liability.

Note 16 ‐ Related party transactions

Director's Compensation

Note 17 ‐ Events occurring after balance date

The aggregate amount of compensation paid to key personnel during

the year was:

No Director received remuneration in the current and previous financial years.

Subsequent to year end, an application submitted to the Chief Commissioner of Revenue NSW was

approved for an exemption to payroll tax under section 48(1) of the Payroll Tax Act 2007. ARCS Australia

Limited expect to receive a refund for payroll tax paid, dating back to 2011. The financial impact as a

result of the exemption is uncertain.

Commitments for minimum lease payments in relation to non‐

cancellable operating leases are payable as follows:

No other significant events have occurred after balance date.


ABN 25 050 334 444


DIRECTORS’ DECLARATION

The Directors of the ARCS Australia Limited declare that: 1. The financial statements, which comprises the statement of financial position as at 30 June 2018,

and the statement of profit or loss and other comprehensive income, statement of changes in funds and statement of cash flows for the year ended on that date, a summary of significant accounting policies and other explanatory notes are in accordance with the Australian Charities and Not‐for‐profits Commission Act 2012 and:

(a) comply with Australian Accounting Standards ‐ Reduced Disclosure Requirements (including

Australian Accounting Interpretations) and the Australian Charities and Not‐for‐profits Commission Regulation 2013; and

(b) give a true and fair view of the financial position as at 30 June 2018 and of the performance

for the year ended on that date of the company. 2. In the opinion of the Directors 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. George Papadopoulos Director Sydney, 11 September 2018


ABN 25 050 334 444


INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ARCS AUSTRALIA LIMITED

Opinion We have audited the financial report of ARCS Australia Limited which comprises the statement of financial position as at 30 June 2018, the statement of profit or loss and other comprehensive income, the statement of changes in funds 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 of ARCS Australia Limited is in accordance with the Australian Charities and Not‐for‐profits Commission Act 2012, including: a) giving a true and fair view of the company’s financial position as at 30 June 2018 and of its financial performance for the

year then ended, and b) complying with Australian Accounting Standards ‐ Reduced Disclosure Requirements (including Australian Accounting

Interpretations) and 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 Responsibility for the Audit of the Financial Report section of our report. We are independent of the company in accordance with the auditor independence requirements of the Australian Charities and Not‐for‐profits Commission Act 2012 and 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 confirm that the independence declaration required by the Australian Charities and Not‐for‐profits Commission Act 2012, which has been given to the Directors of the company, would be in the same terms if given to the Directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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 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 a 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 are responsible for overseeing the company’s financial reporting process.


ABN 25 050 334 444


INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ARCS AUSTRALIA LIMITED

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.

A further description of our responsibilities for the audit of the financial report is located at The Auditing and Assurance Standards Board and the website address is http://www.auasb.gov.au/Home.aspx

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.

StewartBrown Chartered Accountants S.J. Hutcheon Partner 11 September 2018

www.arcs.com.auT: 02 8905 0829

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