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AUSTRALIAN RESEARCH ALLIANCE FOR CHILDREN AND YOUTH LIMITED

ACN 100 902 921

A COMPANY LIMITED BY GUARANTEE

FINANCIAL REPORT

FOR THE YEAR ENDED 31 DECEMBER 2015

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FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2015

CONTENTS PAGE

CONTENTS PAGE

DIRECTORS’ REPORT 2 - 8

STATEMENT OF FINANCIAL POSITION 9

STATEMENT OF COMPREHENSIVE INCOME 10

STATEMENT OF CHANGES IN EQUITY 11

STATEMENT OF CASH FLOWS 12

NOTES TO THE FINANCIAL STATEMENTS 13 - 24

DIRECTORS’ DECLARATION 25

INDEPENDENT AUDITOR’S REPORT 26-27

AUDITOR’S INDEPENDENCE DECLARATION 28

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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2015

Your Directors present their report on the entity for the year ended 31 December 2015. DIRECTORS The Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. The names of the Directors are: Ms Elaine Henry OAM Mr Tim Goodwin Dr Norman Swan Ms Lisa Paul AO PSM Dr Gervase Chaney Professor Stephen Zubrick (appointed 1 April 2015) Dr Dianne Jackson (CEO and Company Secretary) Information on Directors Ms Elaine Henry OAM - BSc (Hons 1), DLitt (h.c.) Elaine Henry has been the Chair of ARACY since 2011, having served on the Board since its inception in 2001. Elaine also Chairs the National Breast Cancer Foundation. She is a Member of the Australian Government Financial Literacy Board and a Director of Financial Literacy Australia; a Member of the Early Start Advisory Committee of the University of Wollongong; a Governor of the Committee for the Economic Development of Australia; a Member of the Vice-Chancellor’s Industry Advisory Board of the University of Technology Sydney, and a Member of the Advisory Board of the Centre for Social Impact. Elaine was awarded first-class honours in Science at Oxford Brookes University in the UK. On returning to Australia. she became the Executive Director of the Cancer Council (NSW) from 1985-1997 and during that time was awarded a Medal in the Order of Australia (OAM) for her work in cancer control in 1994 which was also recognised with an honorary Doctorate of Letters from UNSW in 2006. In 1998, as CEO of The Smith Family, she led a comprehensive transformation of the organisation focusing it on the power of education to change the lives of disadvantaged children, families and communities across Australia. As part of a social movement, she was a founding member of Social Ventures Australia, inaugural chair of Nonprofit Australia Ltd and Director of the Australian Social Innovation Exchange. Throughout her career, Elaine has served on a wealth of committees and boards at the state, national and international levels, including as chair of the Australian Government’s Stronger Families and Communities Partnership, which had a major role in the development of the Communities for Children initiative, and as a member of the former Prime Minister’s Community Business Partnership. Elaine’s leadership skills have been recognised by many awards including the Lifetime Achievement Award from Research Australia in 2008. She is a Member of the Australian Institute of Company Directors and Chief Executive Women.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2015 (Continued)

Information on Directors (continued) Mr Tim Goodwin – LL.M, BA and Law (Hons) Tim Goodwin is a member of the Yuin nation, an Aboriginal nation that occupies the southeast coast of NSW. Tim is currently a barrister in Melbourne. He graduated with bachelor degrees in Arts and Law (with Honours) from the Australian National University in 2007 and with a Master of Laws from Harvard Law School in 2012. Tim was the Associate to The Hon Justice AM North of the Federal Court of Australia from 2008 to 2009 and to the Hon Justice M Bromberg of the Federal Court of Australia from 2009 to 2010. Tim serves on the editorial board of the Australian Indigenous Law Review. From 2008 to 2010, he was a member of the Steering Committee for the establishment of a National Indigenous Representative Body. This work resulted in the creation of the National Congress of Australia’s First Peoples. Tim is currently a trustee of the Roberta Sykes Indigenous Education Foundation and a Board Member of the National Apology Foundation. Dr Norman Swan – MBChB, FRCP, MD (Hons) Causa, DCH Host of the Health Report, on the Australian Broadcasting Corporation’s Radio National, and Tonic on ABC News24, Dr Norman Swan was one of the first medically qualified journalists in Australia. He was born in Scotland, graduated in medicine from the University of Aberdeen and later obtained his postgraduate qualifications in paediatrics. Norman also edits his own newsletter, The Choice Health Reader, which is published in partnership with CHOICE, Australia’s leading consumer advocacy organisation. On television, Dr Swan has hosted ABC Television’s science program, Quantum, and been a guest reporter on Catalyst and Four Corners. He hosted Health Dimensions on ABC Television, and created, wrote and narrated a four-part series on disease and civilisation, “Invisible Enemies”, made for Channel 4 (UK) and SBS Television. He also co-wrote and narrated “The Opposite Sex”, a four-part series for ABC Television. Norman Swan has been the Australian correspondent for the Journal of the American Medical Association and the British Medical Journal and has consulted for the World Health Organization in Geneva. He is also co-founder of Tonic Health Media, a company which focuses on communicating to patients and accompanying persons at the point of care promoting evidence based care. Ms Lisa Paul – AO, PSM, FAIM, FAICD, FIPAA, BA (Hons) Lisa Paul AO PSM is Secretary of the Australian federal government Department of Education and Training (retired 2015). Prior to this, Lisa was Secretary of the Department of Education from 2013 to 2014, Secretary of the Department of Education, Employment and Workplace Relations from 2007 to 2013 and Secretary of the Department of Education, Science and Training from 2004 to 2007. In 2011, Lisa was made an Officer of the Order of Australia for distinguished service to public sector leadership in key policy and program implementation and received the Australia Chartered Accountants’ Federal Government Leader of the Year award. In 2003, she was awarded a Public Service Medal for leading the Australian Government's domestic response to the Bali bombings. Along with her role at ARACY, she is currently a non-Executive Director of the Advisory Council of the Australian National University Crawford School of Public Policy, the Advisory Board to the Strategic Centre for Leadership Learning and Development, the Australian Schools Plus Board, the Centre for Strategy and Governance Advisory Board, Social Ventures Australia and the National Security College Advisory Board. She is a National Fellow of the Institute of Public Administration Australia, a fellow of the Australian Council for Educational Leaders, a fellow of the Australian Institute of Management, a fellow of the Australian Institute of Company Directors, an ANU Public Policy Fellow and is a member of Chief Executive Women.

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Information on Directors (continued) Dr Gervase Chaney - MBBS, FRACP Gervase Chaney is a general paediatrician and the Executive Director of Princess Margaret Hospital for Children and Clinical Commissioning in the Child and Adolescent Health Service (CAHS) in Western Australia. He is a Clinical Senior Lecturer, School of Paediatrics and Child Health, University of WA and an Adjunct Senior Lecturer, School of Medicine, University of Notre Dame WA. He was President of the Paediatrics and Child Health Division of the Royal Australasian College of Physicians (RACP) 2010 – 2012 and was on the Board of the RACP from 2008 - 2012. He was Director of Clinical Planning and Reform for CAHS from 2006 – 2011; Co-Lead of the Child and Youth Health Network for WA Health from 2005 – 2010; and was on the Board of Kidsafe WA from 2004 – 2015. Professor Stephen Zubrick - MSc, MA, PhD Stephen Zubrick currently holds a professorial appointment in the Faculty of Education at the University of Western Australia and is also a Senior Principal Research Fellow at the Telethon Kids Institute. He is the Chairman of the Consortium Advisory Group for the National Longitudinal Study of Australian Children, a Member of the Steering Committee for the Longitudinal Study of Indigenous Children, and sits on the Steering Committee for the Family and Children Activity Expert Panel of the Australian Government Department of Social Services. In 2010 he received a Western Australian Citizen of the Year Award for lifetime contributions to the children and young people. Stephen holds several national and international competitive research grants and his research interests include the study of the social determinants of health and mental health in children, studies of the genetic and environmental determinants of language development, and large scale psychosocial survey work in non-Indigenous and Indigenous populations. Over the past 20 years he has been instrumental in designing and implementing the leading Australian studies (national and state) of child and adolescent mental health.

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OPERATING AND FINANCIAL REVIEW The comprehensive income of the entity for the financial year was: Year Ended

31 December 2015 Year Ended 31 December 2014

Total comprehensive income (438,831) 319,260 Principal Activity The entity is a company limited by guarantee. The entity has a financial year ending 31 December. The entity was incorporated in Australia on 13 June 2002. The entity was established for the charitable purpose of facilitating, co-ordinating and supporting the development of knowledge through scientific research and the effective use of that knowledge which is or may prove to be, of value to Australia by enhancing the well being and the life chances of children and young people. Objectives To improve the wellbeing of children and young people in the longer term, by advancing collaboration and evidence-based action. Strategy for Achieving Objectives Establishing new strategic relationships has been key throughout 2015 as ARACY continued to focus on the implementation of The Nest Action Agenda: A national plan for child and youth wellbeing. This has included providing services that enable organisation’s and decision makers to utilise the outcomes and priority directions included in the Nest as a basis for measurement. This year the organisation has also significantly progressed work on its parental engagement in education project for the federal government and brought to conclusion a similar project for the ACT government. Based on the success of previous evidence reviews ARACY was also commissioned during the year to do a major research and evidence review on early intervention and prevention for the NSW government. This report is now being used extensively both in NSW and in other states. ARACY has continued to lead the right@home collaboration conducting randomised control trial on sustained home nurse visiting. It has also continued to build on the success of its Common Approach framework for cross sectorial work with families, with a major increase in organisational uptake of training in this approach. The organisation has continued to grow its member base and now has nearly 4,350 members, many of whom are actively participating in State and Territory Convenor and ARACY Network events. Many ARACY members attended the national ‘Coming together for Australia’s Children’ conference, held in April 2015 in Hobart. The conference was hosted by ARACY’s Early Years Network and was a great success with international speakers providing a global perspective.

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Significant Changes in the State of Affairs No significant change in the nature of these activities occurred during the year. Significant Events after the reporting period No significant changes occurred during the year. Likely Developments and Expected Results No foreseeable developments in the next 12 months. Environmental Regulation and Performance The entity’s operations are not regulated by any environmental regulation under a law of the Commonwealth or of a State or Territory.

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DIRECTORS MEETINGS During the year ended 31 December 2015, a total of four (4) Directors meetings were held which were attended by each Director holding office as follows: Number of Meetings Attended Number Eligible to Attend Ms Elaine Henry OAM 4 (1 via teleconference) 4 Professor Rob Moodie AM 1 1 Mr Tim Goodwin 2 (1 via teleconference) 4 Dr Norman Swan 3 4 Ms Lisa Paul AO PSM 3 (1 via teleconference) 4 Dr Gervase Chaney 4 (2 via teleconference) 4 Ms Arlene Tansey 2 (2 via teleconference) 3 Professor Stephen Zubrick 2 (1 via teleconference) 2 Professor Rob Moodie AM resigned 27 February 2015 Professor Stephen Zubrick was appointed 1 April 2015 Ms Arlene Tansey resigned 30 October 2015 LIABILITY OF MEMBERS AND DIVIDENDS The entity is a company limited by guarantee and the liability of members is limited to an amount not exceeding $1. Accordingly no dividends were paid or options over shares granted. REMUNERATION REPORT The Directors do not receive any remuneration or other benefits as the positions are honorary in nature.

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INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS Premiums of $4,500 have been paid for an Associations Liability Insurance policy, which includes cover for Professional Indemnity Insurance, Directors and Officers Insurance and Employment Practices cover. No person has applied for leave of Court to bring proceedings on behalf of the entity or intervene in any proceedings to which the entity is a party for the purpose of taking responsibility on behalf of the entity for all or part of those proceedings. The entity was not a party to any such proceedings during the year. NON-AUDIT SERVICES The entity’s auditor, Ernst & Young, provided no non-audit services during the year ended 31 December 2015. SINGLE ENTITY The company is a single entity and has no subsidiaries. INDEMNIFICATION OF AUDITORS To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year. AUDITORS INDEPENDENCE The Directors received a declaration from the auditor of the Australian Research Alliance for Children and Youth Limited. (Refer to page 29) Signed in accordance with a resolution of Directors

Elaine Henry Director Date: 16 March 2016

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STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2015 Notes 2015

$ 2014

$

ASSETS Current Assets Cash and cash equivalents 3 2,931,527 4,009,397 Trade and other receivables 4 340,387 481,001 Term deposits 5 431,600 396,633 Prepayments 6 34,908 17,750 Total Current Assets 3,738,422 4,904,781 Non-current Assets Property, plant and equipment 7 531 29,895 Total Non-current Assets 531 29,895 Total Assets 3,738,953 4,934,676 LIABILITIES Current Liabilities Trade and other payables Government grants received in advance

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1,291,269 1,038,436

1,158,416 1,923,423

Employee benefit liabilities 10 91,214 98,973 Total Current Liabilities 2,420,919 3,180,812

Non-current Liabilities Employee benefit liabilities

10 8,366 5,365

Total Non-current Liabilities

8,366 5,365

Total Liabilities 2,429,285 3,186,177 NET ASSETS 1,309,668 1,748,499 MEMBER’S FUNDS Retained surpluses attributable to Members 1,309,668 1,748,499 Total Member’s funds 1,309,668 1,748,499 This statement should be read with the accompanying notes.

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STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015 Notes 2015

$ 2014

$

CONTINUING OPERATIONS

Revenue 11 4,265,816 5,975,420 Expenses Employee benefits expense

(1,655,833)

(1,499,025)

Research Partners expense (809,714) (1,353,663) Research projects expense (1,426,746) (1,684,630) Travel expense (196,244) (195,093) Communications expense (22,937) (31,680) Premises expenses (140,805) (105,960) Information technology expense (89,312) (173,610) Insurance expense (19,527) (15,289) Depreciation expense (7,308) (12,278) Professional fees expense

(42,658) (30,297)

Recruitment expense

(10,168) (32,987)

Conferences and events expense General expense

(198,600)

(84,795)

(459,972)

(61,676)

Net (deficit)/surplus from continuing operations

(438,831) 319,260

Other Comprehensive Income - - Total comprehensive income attributable to members of Australian Research Alliance for Children and Youth Limited

(438,831)

319,260

This statement should be read with the accompanying notes.

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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015 Notes Retained

earnings $

At 1 January 2014 1,429,239 Surplus for the year 319,260 At 31 December 2014 1,748,499

At 1 January 2015 1,748,499 Deficit for the year (438,831) At 31 December 2015 1,309,668 This statement should be read with the accompanying notes.

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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2015

Notes 2015

$ 2014

$

CASH FLOWS (USED IN)/FROM OPERATING ACTIVITIES

Receipts from grants and gifts 3,378,049 3,022,174 Receipts from conferences and events 332,180 557,740 Interest received 89,328 187,947 Payments to suppliers and employees (4,842,460) (5,383,619) Net cash flow (used in)/from operating activities

13 (a) (1,042,903) (1,615,758)

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES

(Payments for)/proceeds from investments in term deposits

(34,967) 3,225,918

Payment for property, plant and equipment

- -

Net cash flow (used in)/from investing activities

(34,967) 3,225,918

Net (decrease)/increase in cash and cash equivalents

(1,077,870) 1,610,160

Cash and cash equivalents at 1 January

4,009,397

2,399,237

Cash and cash equivalents at 31 December 13 (b) 2,931,527 4,009,397

This statement should be read with the accompanying notes.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1. CORPORATE INFORMATION The financial report of the Australian Research Alliance for Children and Youth Limited for

the year ended 31 December 2015 was authorised for issue in accordance with the resolution of Directors dated 16 March 2016. The entity is a company limited by guarantee and the liability of members is limited to an amount not exceeding $1. The Directors may impose an annual subscription on any class of membership from time to time and the member within a class which is subject to an annual subscription is liable to pay the subscription. The entity is a not for profit entity for financial reporting purposes. The entity is established for the charitable purpose of facilitating, co-ordinating and supporting the development of knowledge through scientific research and the effective use of that knowledge which is or may prove to be of value to Australia by enhancing the well being and the life chances of children and young people.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation

The financial report is a general purpose financial report which has been prepared in accordance with the requirements of the Corporations Act 2001, including applicable Australian Accounting Standards. Other mandatory professional reporting requirements and relevant Accounting Interpretations have also been complied with. The financial report has been prepared on a historical cost basis. The financial report has been presented in Australian dollars. The financial report has been prepared on the going concern basis. Statement of Compliance The financial report complies with Australian Accounting Standards, and other authoritative pronouncements issued by the Australian Accounting Standards Board (AASB).

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 (Continued)

Revenue Recognition

Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Grants Contributions received or receivable are recognised immediately as revenue when:

(a) the entity obtains control of the contribution or the right to receive the contribution; (b) it is probable that the economic benefits comprising the contribution will flow to the

entity; and (c) the amount of the contribution can be measured reliably.

If conditions are attached to the grant which must be satisfied before ARACY is eligible to receive the contribution, the recognition of the grant as revenue is deferred until those conditions are satisfied. When grant revenue is received whereby the entity incurs an obligation to deliver economic value directly back to the contributor/transferor, this is considered a reciprocal transaction and the grant revenue is recognised in the statement of financial position as a liability until the service has been delivered to the contributor/transferor, otherwise the grant is recognised as income on receipt. Gifts Gifts are recognised on receipt. Interest Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Cash and cash equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Trade and other receivables Trade receivables, which generally have 30-day terms and are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method, less an allowance for any uncollectible amounts. Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An allowance for doubtful debts is made when there is objective evidence that the entity will not be able to collect the debts.

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Term deposits Term deposits in the balance sheet comprise term deposits with an original maturity of more than three months, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Income Tax Under Section 50-5 of the Income Tax Assessment Act 1997, the income of the entity is exempt from income tax. GST Revenues, expenses and assets are recognised net of the amount of GST except: • when the GST incurred on a purchase of goods and services is not recoverable from

the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables, which are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. Property, Plant and Equipment Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated on a straight line basis over the estimated useful life of the asset. The depreciation rates used for plant and equipment range between 20% and 33% pa. All asset residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

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Property, Plant and Equipment (continued) Impairment The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost. Trade and other payables Trade payables and other payables are carried at amortised cost. They represent liabilities for goods and services provided to the entity prior to the end of the financial year that are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Employee leave benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled within 12 months of the reporting date are recognised in employee benefit liabilities in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for leave expected to be taken in greater than 12 months of the balance date are shown at the present value of the expected future payments to be made in respect of employees’ services, based on the projected unit credit method. In calculating the liabilities, consideration is given to expected future wage and salary levels, experience of employee departures and periods of service, as well as estimated average discount rates applicable to adjust gross values calculated to net present values. The amounts calculated are treated as non-current liabilities and included in employee benefit liabilities. Leases The determination of whether an arrangement is or contains a lease is based in the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

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2015

$ 2014

$ 3. CASH AND CASH EQUIVALENTS Cash at bank and in hand 631,527 1,209,397 Short-term deposits 2,300,000 2,800,000 2,931,527 4,009,397 Cash at bank earns interest at floating rates based on daily bank deposit rates. The

carrying amounts of cash and cash equivalents represent fair value. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the entity, and earn interest at the respective short-term deposit rates.

4. TRADE AND OTHER RECEIVABLES Trade receivables 311,940 436,147 Other debtors - 93 Bank interest receivable

GST refundable 9,834

18,613 15,245

29,516 340,387 481,001 5.

Trade receivables are non-interest bearing and as at 31 December 2015 none were past due or impaired. TERM DEPOSITS

Term deposits 374,083 374,083 Rental bond 57,517 22,550 431,600 396,633 6.

PREPAYMENTS

Prepaid project expenses 21,726 6,774 Prepaid insurance 13,182 10,976 34,908 17,750 7.

PROPERTY, PLANT AND EQUIPMENT

At cost 8,956 53,086 Less accumulated depreciation (8,425) (23,191) 531 29,895 Movements in carrying amounts: Plant and equipment Balance at the beginning of financial year 29,895 42,173 Additions

Disposal of plant and equipment -

(22,056) -

- Depreciation expense (7,308) (12,278) Carrying amount at the end of financial year 531 29,895

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8.

TRADE AND OTHER PAYABLES

2015 $

2014 $

Trade payables 979,521 480,671 PAYG tax payable 32,571 27,338 FBT payable 1,251 831 Accrued expenses 277,926 649,576 1,291,269 1,158,416 9.

GOVERNMENT GRANTS RECEIVED IN ADVANCE At 1 January Received during the year Released to the income statement

1,923,423 1,966,862 2,851,849

4,106,224 492,000

2,674,801 At 31 December 1,038,436 1,923,423 10.

EMPLOYEE BENEFIT LIABILITIES

Current Annual leave

72,986

66,939

Long service leave 18,228 32,034 91,214 98,973

Non-current

Long service leave 8,366 5,365 8,366 5,365 11. REVENUE Receipts from government grants 3,119,940 4,376,997 Receipts from gifts and other grants 754,567 903,440 Receipts from conferences and events 301,982 507,036 Bank interest 89,327 187,947 Total revenues 4,265,816 5,975,420

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12.

COMMITMENTS AND CONTINGENCIES

2015 $

2014 $

Operating lease commitments Non-cancellable operating lease contracted for but not capitalised in the financial statements for a

multifunction photocopier

Payable - not later than one year 11,316 8,881 - later than one year but not later than five years 42,435 12,582 53,751 21,463 Operating Lease of Office space at 9 Torrens Street,

Braddon ACT, expiring March 2016

Payable - not later than one year 14,782 88,123 - later than one year but not later than five years - 14,782 14,782 102,905 Operating Lease of Office space at 60 Marcus Clarke

Street, Canberra ACT, expiring February 2021

Payable - not later than one year 130,076 - - later than one year but not later than five years 541,983 - 672,059 - 13. STATEMENT OF CASH FLOWS (a) Reconciliation of the net (deficit)/surplus to

the net cash flow

(Deficit)/surplus from ordinary activities (438,831) 319,260 Non-cash items; Depreciation 7,308 12,278 Loss on disposal of assets 22,056 - Changes in assets and liabilities; Decrease/(increase) in trade and other receivables 140,614 (345,167) (Increase) in prepayments (17,158) (5,314) Increase in trade and other payables 132,853 605,050 (Decrease) in government grants (884,987) (2,182,801) (Decrease) in employee benefit liabilities (4,758) (19,064) NET CASH FLOW (USED IN)/FROM

OPERATING ACTIVITIES

(1,042,903)

(1,615,758) (b) Reconciliation of cash balances: Cash balance comprises: Cash and cash equivalents 2,931,527 4,009,397 Cash balance as per statement of cash flows 2,931,527 4,009,397

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14. FINANCIAL RISK MANAGEMENT OBJECTIVES

AND POLICIES

The entity's principal financial instruments comprise cash and cash equivalents, term

deposits, trade debtors, and trade creditors, while excluding government grants received in advance. There is a contingent obligation that if the funding in advance is not spent it must be returned. However, it is ARACY’s expectation that the funding will be expended in full within the timeframes of the relevant projects it relates to, therefore the balance is not required to be disclosed from a financial risk management point of view. The main purpose of these financial instruments is to create income for the entity in order to fund future growth. The main risks arising from the entity's financial instruments are interest rate risk, credit risk and liquidity risk. The entity uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rates. Ageing analyses are undertaken to manage credit risk and liquidity risk is monitored through cash flow forecasts. The Board reviews and agrees policies for managing each of these risks as summarised below:

Risk Exposures and Responses

Interest rate risk The entity's exposure to market interest rates relate primarily to cash at bank. At balance date, the entity had the following financial assets exposed to Australian variable interest rate risk:

Amount Exposed to

Floating Interest Rate

Amount Not Exposed to

Floating Interest Rate

2015 $

2014 $

2015 $

2014 $

Financial assets Cash and cash equivalents 2,931,527 4,009,397 - - Trade and other receivables - - 340,387 481,001 Term deposits 431,600 396,633 - - Total financial assets 3,363,127 4,406,030 340,387 481,001 Weighted average effective

interest rates %pa 2.35 3.66 Financial liabilities Trade and other payables 1,291,269 1,158,416 Total financial liabilities 1,291,269 1,158,416

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The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance sheet date: At 31 December 2015, if interest rates had moved, as illustrated in the table below, with all other variables held constant, the net surplus from operations and equity would have been affected as follows:

Judgement of reasonably possible movements

Net Surplus/(Deficit) Higher/(Lower)

Equity Higher/(Lower)

2015 $

2014 $

2015 $

2014 $

+1.0% (100 basis points) 33,631 44,060 33,631 44,060 -1.0% (100 basis points) (33,631) (44,060) (33,631) (44,060)

The movements in net surplus from operations and equity are due to higher/lower interest income from variable rate on cash balances. The sensitivity is lower in 2015 than in 2014 because of a decrease in average cash balances during 2015. Price risk The entity does not have a material exposure to price risk. Credit risk Credit risk arises from the financial assets of the entity, which comprise cash and cash equivalents, trade debtors and long-term deposits. The entity's exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. The carrying amounts of the entity’s financial assets are the same as their net fair value. Exposure at balance date is presented in the following table: At 31 December

Financial Assets 2015 $

2014 $

Cash and cash equivalents (note 3) 2,931,527 4,009,397 Trade and other receivables (note 4) 340,387 481,001 Term deposits (note 5) 431,600 396,633 Total 3,703,514 4,887,031

The entity does not hold any credit derivatives to offset its credit exposure. The entity trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the entity's policy to securitise its trade and other receivables. In addition, trade and other receivable balances are monitored on an ongoing basis with the result that the entity's exposure to bad debts is not significant.

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Liquidity risk The entity's objective is to maintain a balance between continuity of funding and flexibility. The entity’s financial liabilities comprise trade and other payables and current employee benefit liabilities totaling $1,382,483 (2014: $1,257,389). Maturity analysis of financial assets and liability based on management's expectation The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and outflows. Trade and other payables originate from the ongoing operations. The assets are considered in the entity’s overall liquidity risk. To monitor existing financial assets and liabilities as well as to enable an effective controlling of future risks, the entity has established comprehensive risk reporting covering its business that reflects expectations of the management of expected settlement of financial assets and liabilities. Year ended 31 December 2015

< 12 months $

> 12 months $

Total $

Cash and cash equivalents (note 3) 2,931,527 - 2,931,527 Trade and other receivables (note 4) 340,387 - 340,387 Term deposits (note 5) 396,633 34,967 431,600 Total financial assets 3,668,547 34,967 3,703,514 Trade and other payables (note 8) 1,291,269 - 1,291,269 Employee benefit liabilities (note 10) 91,214 8,366 99,580 Total financial liabilities 1,382,483 8,366 1,390,849 Net maturity 2,286,064 26,601 2,312,665

Year ended 31 December 2014

< 12 months $

> 12 months $

Total $

Cash and cash equivalents 4,009,397 - 4,009,397 Trade and other receivables 481,001 - 481,001 Term deposits 374,083 22,500 396,633 Total financial assets 4,864,481 22.550 4,887,031 Trade and other payables 1,158,416 - 1,158,416 Employee benefit liabilities 98,973 5,365 104,338 Total financial liabilities 1,257,389 5,365 1,262,754 Net maturity 3,607,092 17,185 3,624,277

23



15. DIRECTOR AND EXECUTIVE DISCLOSURES Details of Key Management Personnel

The following were Directors of the company during the period: Ms Elaine Henry OAM Professor Rob Moodie AM (resigned 27 February 2015) Mr Tim Goodwin Dr Norman Swan Ms Lisa Paul AO PSM Dr Gervase Chaney Ms Arlene Tansey (resigned 30 October 2015) Professor Stephen Zubrick (appointed 1 April 2015)

The following were senior staff during the period;

Dr Dianne Jackson, Chief Executive Officer and Company Secretary Ms Penny Dakin, National Program Director Ms Angela Southwell, Senior Manager Dr Stacey Fox, Senior Manager Ms Charlene Smith, Senior Manager Mr Lyndon Sharp, Finance Manager Ms Carol Hubert, Senior Manager (appointed 13 April 2015) Dr Lara Bishop, Senior Manager (resigned 20 April 2015) Ms Jane Brooks, Chief Operating Officer and Company Secretary (resigned 8 May 2015)

Compensation of Key Management Personnel Senior staff received a total of $900,950 over the period (2014: $721,009). 2015

$ 2014

$ Short-term employee benefits 900,950 721,009 Termination benefits - - Total compensation 900,950 721,009

No interests are held by Key Management Personnel.

24



16. EVENTS AFTER THE REPORTING PERIOD There were no significant events after balance sheet date.

17. AUDITOR REMUNERATION The auditor of the Australian Research Alliance for Children and Youth Limited is Ernst

& Young. 2015

$ 2014

$ Amounts received or due and receivable

by Ernst & Young (Australia) for:

An audit of the financial report of the entity 18,849 17,613 Audit services for grant acquittal audits - 9,620 18,849 27,233 18. ENTITY DETAILS The registered office and principal place of business of the entity is:

LEVEL 3, 60 MARCUS CLARKE STREET CANBERRA CITY, ACT 2601

25


DIRECTORS’ DECLARATION FOR THE YEAR ENDED 31 DECEMBER 2015

In accordance with a resolution of the Directors of Australian Research Alliance for Children and Youth Limited, I state that: 1. In the opinion of the Directors:

(a) The financial statements and notes, of the entity, are in accordance with the Corporations Act 2001 and the Australian Charities and Not-for-Profits Commission Act 2012, including:

(i) Giving a true and fair view of the entity’s financial position as at 31 December

2015 and of the performance for the year ended on that date of the entity; and

(ii) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations), Corporations Regulations 2001, and Australian Charities and Not-for-Profits Commission Regulation 2013;

(b) There are reasonable grounds to believe that the entity will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of Directors

Elaine Henry Director Date: 16 March 2016

A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation

Ernst & Young121 Marcus Clarke StreetCanberra ACT 2600 AustraliaGPO Box 281 Canberra ACT 2601

Tel: +61 2 6267 3888Fax: +61 2 6246 1500ey.com/au

Independent auditor's report to the members of the AustralianResearch Alliance for Children and Youth Limited

Report on the financial report

We have audited the accompanying financial report of the Australian Research Alliance for Childrenand Youth Limited (“the company”), which comprises the statement of financial position as at 31December 2015, the statement of comprehensive income, statement of changes in equity andstatement of cash flows for the year then ended, notes comprising a summary of significant accountingpolicies and other explanatory information, and the directors' declaration.

Directors' responsibility for the financial reportThe directors of the company are responsible for the preparation of the financial report that gives atrue and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001and the Australian Charities and Not-for-Profits Commission Act 2012 and for such internal controls asthe directors determine are necessary to enable the preparation of the financial report that is freefrom material misstatement, whether due to fraud or error.

Auditor's responsibilityOur responsibility is to express an opinion on the financial report based on our audit. We conducted ouraudit in accordance with Australian Auditing Standards. Those standards require that we comply withrelevant ethical requirements relating to audit engagements and plan and perform the audit to obtainreasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial report. The procedures selected depend on the auditor's judgment, including theassessment of the risks of material misstatement of the financial report, whether due to fraud or error.In making those risk assessments, the auditor considers internal controls relevant to the entity'spreparation of the financial report that gives a true and fair view in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by the directors, aswell as evaluating the overall presentation of the financial report.

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

IndependenceIn conducting our audit we have complied with the independence requirements of the Corporations Act2001 and the Australian Charities and Not-for-Profits Commission Act 2012. We have given tothe directors of the company a written Auditor’s Independence Declaration, a copy of which is includedin the directors’ report.


OpinionIn our opinion the financial report of Australian Research Alliance for Children and Youth Limited is inaccordance with the Corporations Act 2001 and the Australian Charities and Not-for-ProfitsCommission Act 2012, including:

a) Giving a true and fair view of the company's financial position as at 31 December 2015 and of itsperformance for the year ended on that date; and

b) Complying with Australian Accounting Standards and the Corporations Regulations 2001 and theAustralian Charities and Not-for-Profits Commission Regulation 2013.

Ernst & Young

Anthony EwanPartnerCanberra16 March 2016


Ernst & Young121 Marcus Clarke StreetCanberra ACT 2600 AustraliaGPO Box 281 Canberra ACT 2601

Tel: +61 2 6267 3888Fax: +61 2 6246 1500ey.com/au

Auditor’s Independence Declaration to the Directors of the AustralianResearch Alliance for Children and Youth Limited

As lead auditor for the audit of the Australian Research Alliance for Children and Youth Limited for thefinancial year ended 31 December 2015, I declare to the best of my knowledge and belief, there havebeen:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 andSubdivision 60-C of the Australian Charities and Not-for profits Commission Act 2012 inrelation to the audit; and

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

Ernst & Young

Anthony EwanPartner16 March 2016

australian research alliance for children · pdf filebeen a guest reporter on catalyst and...

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