rose cottage i i °spice · 2020-02-10 · trading as: rose cottage i i °spice ii , ar i 1e11 f...

$: ROSE COTTAGE I I °SPICE · 2020-02-10 · TRADING AS: ROSE COTTAGE I I °SPICE Ii , AR I 1E11 f VI714\i, ,V\Ai KATIE ROSE COTTAGE HOSPICE LIMITED ABN: 27 615 291 293 SPECIAL PURPOSE$
TRADING AS:

ROSE COTTAGE I I °SPICE

Ii , AR I 1E11 f VI714\i,,V\Ai

KATIE ROSE COTTAGE HOSPICE LIMITED

ABN: 27 615 291 293

SPECIAL PURPOSE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019

CONTENTS PAGE

Directors' report 2

Auditor's independence declaration 5

Statement of profit or loss and other comprehensive income 6

Statement of financial position 7

Statement of changes in equity 8

Statement of cash flows 9

Notes to the financial statements 10

Directors' declaration 20

Independent auditor's report 21

Contact DetailsPrincipal place of business:199 Beddington Road

DOONAN QLD 4562

PO Box 1117 Noosaville BC Qld 4566

www.katierosecottage.org.au

Registered office:ML Taylor & Associates

NOOSAVILLE QLD 4566

KATIE ROSE COTTAGE HOSPICE LIMITEDABN: 27 615 291 293

DIRECTORS' REPORTFOR THE YEAR ENDED 30 JUNE 2019

Your directors present this report on the company for the financial year ended 30 June 2019.— Not For Profit Charity No (CH2898) Qld Government Approved 25 November 2016— ACNC Registered Charitable Institution [PSI Status] 23/02/2017

In order to comply with the provisions of the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act), thedirectors report as follows:

DirectorsThe names of each person who has been a director during the year and to the date of this report are:

— Carol Raye— Les Godwin— Jillian Morley (appointed 20 June 2019)

— Gordon Strachan

— Joan Scotcher (resigned 4 April 2019)

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Principal ActivitiesThe principal activity of the company during the financial year was running a charity including a Hospice Facility in Doonan forthe provision of Palliative Care Services.

Review of OperationsDuring the year, the company continued to engage in its principal activity, the results of which are disclosed in the attachedfinancial statements.The net current year deficit of the company for the financial year ended 30 June 2019 amounted to: ($207,904)

Short-term and Long-term ObjectivesThe company's short-term objectives are to:

— Provide a suite of high quality support services for the terminally ill, their family and friends via:Provision of high quality outreach nursing and personal care services for the terminally ill.

- Provision of professional grief and loss counselling services for our guests, their family and friends.- Provision of home care services, as required.

Provision of a range of support services, as required.

The company's long-term objectives are to:— Provide quality palliative care for the terminally ill based on the KRC hospice model via:

Provision of professional nursing care (in-house and outreach), well trained and engaged in providing leadingpractice care for the terminally ill.A dedicated, well trained and supported team of employees, assisting carers / volunteers to aid in the provision ofbest practice care for the terminally ill.Ensuring the organisation and the care provided is constantly focused on best practice principles for the terminally

— Ensure that the basis for our care is always based on inspiring human qualities underpinned by great care, love andrespect for the individual.

Page 2 of 22



StrategiesTo achieve its stated objectives, the company has adopted the following strategies:

— To educate all about our services and to lobby government to ensure they recognise our model of care via:- Providing in house and outreach services to the community focused on building effective relationships.

Linking effectively with the media and all other forms of communication to discuss / educate and talk about ourservices.Development of effective connections with government informing them of the sustainability of the KRC hospicemodel, lobbying for recognition of the model and improved financial support.Seizing all other opportunities to build and promote our organisation's enduring success.

— To embrace and engage our volunteers, our community and all other stakeholders ensuring they are treated with greatprofessionalism and respect via:

Positively engaging our volunteers, our community, the medical fraternity, government (at all levels) and all otherstakeholders to contribute to and support our organisation on its journey.Regularly report to community on what we are doing and how we are progressing in a quarterly CommunityNewsletter.Actively participate in activities that support, nurture and grow our community.

— Actively engaging with other charitable / benevolent community organisations to positively contribute to the wonderfulgrowth of humanity and care in our society, particularly here on the Sunshine Coast.

Key Performance MeasuresThe company measures its own performance through the use of both quantitative and qualitative benchmarks. Thebenchmarks are used by the directors to assess the financial sustainability of the company and whether the company's short-term and long-term objectives are being achieved.

Information on DirectorsCarol Raye - ChairQualifications Associate Diploma MarketingExperience 27 years Executive Marketing & CommunicationsSpecial Responsibilities Media/PR/Marketing

Les Godwin - TreasurerQualifications Fellow Certified Practising Accountant (FCPA)Experience Over 50 years' experience in financial management of small to medium enterprises,

including taxation, corporate governance, internal and external audit functionsSpecial Responsibilities Financial management and reporting

Jillian Morley - Board MemberQualifications Diploma in Counselling, Grad Dip in CounsellingExperience 8 years counselling experienceSpecial Responsibilities Hospice Counsellor (1 of 4 currently engaged) and Board Member

Gordon Strachan - Board MemberQualifications

Experience

Special Responsibilities

Bachelor of Science (Medical Science), MB CHB, Diploma in Diabetic Care, Fellow of theRoyal Australian College of General Practitioners in AustraliaSpecial interests include general and aged care and also practices at two local agedhomes on the coast. Experience in palliative care having previously worked at aninterstate Hospice.General, aged and palliative care

Joan Scotcher - Board MemberExperience Extensive experience as a Counsellor on the Sunshine Coast for many years and has

previously held a role on the board of Sunshine Butterflies. Business acumen andexperience is brought to the board from previous role as an owner operator of charteryachts.

Special Responsibilities Working with, and supporting guests and their families associated with Katie RoseCottage and offering support to volunteers

Page 3 of 22

Signed - Carol Raye



Meetings of DirectorsDuring the financial year ten meetings of directors were held. Attendances by each director were as follows:

Number eligible to attend Number attendedCarol Raye 10 10Les Godwin 10 9Jillian Morley 1 1Gordon Strachan 10 8

Joan Scotcher 7 6

The company is incorporated under the Corporations Act 2001 and is a company limited by guarantee. If the company iswound up, the constitution states that each member is required to contribute a maximum of $100 towards meeting anyoutstanding obligations of the entity. At 30 June 2019, the total amount that members of the company are liable to contributeif the company is wound up is $400 (2018: $400).

Auditor's Independence DeclarationThe lead auditor's independence declaration for the year ended 30 June 2019 has been received and can be found on page 5of the financial report.

Signed in accordance with a resolution of the Board of Directors.

CS))/ al)(9Date

Page 4 of 22

CONTACT66 Duporth Avenue, Maroochydore

PO Box 299. Maroochydore. OLD 4558

T: (07) 5443 2600

E. [email protected]

C CORPORATE INFORMATIONLove and Partners Auditors Pty Ltd

ABM 30 125 237 229

Authorised Audit Company Number 313440

wwwloveancipartners.cornLiability limited by a scheme approved under Professional Standards Legislation

Page 5 of 22

Love & PartnersREGISTERED COMPANY AUDITORS

AUDITOR'S INDEPENDENCE DECLARATIONUNDER SECTION 60-40 OF THE

AUSTRALIAN CHARITIES AND NOT-FOR-PROFITS COMMISSION ACT 2012

TO THE DIRECTORS OF KATIE ROSE COTTAGE HOSPICE LIMITED

We declare that, to the best of our knowledge and belief, during the year ended 30 June 2019 there havebeen:

(i) no contraventions of the auditor independence requirements of the Australian Charities and Not-for-profits Commission Act 2012 in relation to the audit; and

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

1--c7.f,e XLove & Partners

Brett BuntainDirector — Audit & AssuranceRCA No. 213172

Date:

ESTABLISHED 1952...benefit from our experience...


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED 30 JUNE 2019

Note

This

Year$

LastYear

$INCOMEDonations 268,650 272,997Grants - Noosa Council 3,173 0Grants - State Government 100,000 0Interest 1,599 2,915Membership fees 1,000 980Other 45,522 22,492Shop sales 505,695 364,929

Total income 1(a) 925,640 664,312

EXPENSESAudit fees 3,767 1,500Bank charges 4,602 2,698Depreciation 4(a) 26,489 13,463Insurance 19,241 12,308Interest 1,955 0Legal costs 2,271 717Motor vehicle costs 6,594 12,647Other 105,671 54,042Shop expenses 163,712 94,840Wages and oncosts 799,244 224,196

Total expenses 1,133,544 416,411

Net surplus/(deficit) from ordinary activities before income tax (207,904) 247,902

Less: income tax 1(j) 0 0

Net surplus/(deficit) from ordinary activities after income tax (207,904) 247,902

OTHER COMPREHENSIVE INCOMEOther 0 0

Total comprehensive income attributable to members of the company (207,904) 247,902

The accompanying notes form part of these financial statements.

Page 6 of 22


STATEMENT OF FINANCIAL POSITIONAS AT 30 JUNE 2019

Note

ThisYear

$

LastYear

$CURRENT ASSETSCash 2 116,251 316,158Receivables 3 20,736 6,290Prepayments 10,239 9,810

Total current assets 147,226 332,258

NON-CURRENT ASSETSProperty, plant and equipment 4 214,617 186,620

214,617 186,620Total assets 361,843 518,878

CURRENT LIABILITIESPayables 156,516 40,285Income in advance 2,577 91,966Borrowings 5 5,048 0Provision for annual leave 30,762 17,622

Total current liabilities 194,903 149,873

NON-CURRENT LIABILITIESProvision for long service leave 5,841 0

Total non-current liabilities 5,841 0Total liabilities 200,743 149,873

Net assets surplus/(deficit) 161,100 369,005

EQUITY

Accumulated surplus/(deficit) 161,100 369,005

Total equity 161,100 369,005


Page 7 of 22


STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 JUNE 2019

Accumulatedsurplus/(deficit)

$

Total members'funds

$THIS YEAR

Opening balance 369,005 369,005Current year surplus/(deficit) (207,904) (207,904)Transfer 0 0

161,100 161,100

LAST YEAR

Opening balance 121,103 121,103Current year surplus/(deficit) 247,902 247,902Transfer 0 0

369,005 369,005


Page 8 of 22


STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 2019

Note

ThisYear

$

LastYear

$SUMMARY OF CASH FLOWS FROM:

OPERATING ACTIVITIESReceipts from customers 851,844 604,405Interest received 1,599 2,915Payments to suppliers and employees (1,001,958) (389,008)Interest paid (1,955) 0

Net cash surplus/(deficit) (150,469) 218,311

INVESTING ACTIVITIESPayment for property, plant and equipment 4(a) (54,486) (161,172)

Net cash surplus/(deficit) (54,486) (161,172)

FINANCING ACTIVITIESProceeds from/(repayment of) borrowings 5,048 0

Net cash surplus/(deficit) 5,048 0Net increase/(decrease) in cash held (199,907) 57,139

Cash at beginning of year 316,158 259,019Cash at end of year 2 116,251 316,158

RECONCILIATION OF OPERATING CASH FLOW WITH NETSURPLUS/(DEFICIT):Net surplus/(deficit) from ordinary activities after income taxAdjust for non-cash items:

- Depreciation- Provision for employee entitlements

Changes in assets and liabilities:- Receivables (Increase)/decrease- Prepayments (Increase)/decrease

Payables Increase/(decrease)Income in advance Increase/(decrease)

4(a)

(207,904)

26,48918,980

(14,446)(429)

116,230(89,389)

247,902

13,46312,002

(923)(7,364)36,765

(83,534)(150,469) 218,311


Page 9 of 22


NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2019

The financial statements cover Katie Rose Cottage Hospice Limited (the company) as an individual entity, incorporated underthe Corporations Act 2001 on 12 October 2016 and domiciled in Australia. The company is a not-for-profit public company

limited by guarantee.

The financial statements were authorised for issue on the date of the signed directors' declaration.

Note 1: Summary of Significant Accounting Policies

Financial Reporting Framework

The directors have prepared the financial statements on the basis that the company is a non-reporting entity because there

are no users who are dependent on general purpose financial statements. These financial statements are therefore special

purpose financial statements that have been prepared in order to meet the requirements of the Australian Charities and Not-for-profits Commission Act 2012 (the ACNC Act). The company is a not-for-profit entity for financial reporting purposes under

Australian Accounting Standards.

The financial statements have been prepared in accordance with the mandatory Australian Accounting Standards applicable

to entities reporting under the ACNC Act and the significant accounting policies disclosed below, which the directors have

determined are appropriate to meet the needs of members. Such accounting policies are consistent with those of previousperiods unless stated otherwise.

Statement of Compliance

The financial statements have been prepared in accordance with the mandatory Australian Accounting Standards applicable

to entities reporting under the ACNC Act. the basis of accounting specified by all Australian Accounting Standards and

Interpretations, and the disclosure requirements of Accounting Standards AASB 101: Presentation of Financial Statements.AASB 107: Cash Flow Statements, AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors, AASB1031: Materiality and AASB 1054: Australian Additional Disclosures.

Basis of Preparation

The financial statements, except for the cash flow information, have been prepared on an accrual basis and are based on

historical costs unless otherwise stated in the notes. Material accounting policies adopted in the preparation of these financial

statements are presented below and have been consistently applied unless stated otherwise. The amounts presented in the

financial statements have been rounded to the nearest dollar.

Accounting Policies

(a) Revenue

Non-reciprocal grant revenue is recognised in the profit or loss when the company obtains control of the grant and it is

probable that the economic benefits gained from the grant will flow to the company and the amount of the grant can be

measured reliably.

If conditions are attached to the grant which must be satisfied before the company is eligible to receive the contribution,

the recognition of the grant as revenue will be deferred until those conditions are satisfied.

When grant revenue is received whereby the company incurs an obligation to deliver economic value directly back to the

contributor, this is considered a reciprocal transaction and the grant revenue is recognised in the statement of financial

position as a liability until the service has been delivered to the contributor: otherwise the grant is recognised as incomeon receipt.

The company may receive non-reciprocal contributions of assets from the government and other parties for zero or a

nominal value. These assets are recognised at fair value on the date of acquisition in the statement of financial position,

with a corresponding amount of income recognised in profit or loss.

Donations and bequests are recognised as revenue when received.

Interest revenue is recognised as it accrues using the effective interest method, which for floating rate financial assets is

the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been

established.

Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant

risks and rewards of ownership of the goods and the cessation of all involvement by the company in those goods.

Revenue from the rendering of a service is recognised upon the delivery of the service to the customer.

All revenue is stated net of the amount of goods and services tax.

(b) Property, Plant and Equipment

Plant and equipment are measured on the cost basis less depreciation and any impairment losses.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the

recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows

that will be received from the assets' employment and subsequent disposal. The expected net cash flows have been

discounted to their present values in determining recoverable amounts.

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Note 1: Summary of Significant Accounting Policies...continued

(b) Property, Plant and Equipment...continued

In the event the carrying amount of plant and equipment is greater than the recoverable amount, the carrying amount is

written down immediately to the estimated recoverable amount. A formal assessment of recoverable amount is made

when impairment indicators are present (refer to Note 1(e) for details of impairment).

Plant and equipment that have been contributed at no cost. or for nominal cost, are recognised at the fair value of the

asset at the date it is acquired.

Depreciation

The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land,

is depreciated on a straight-line basis over the asset's useful life to the entity commencing from the time the asset is held

ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or

the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable assets are:

Class of fixed asset

Depreciation rate

Leasehold improvements

2.5% - 14.3%

Equipment and fittings

2.5% - 33.3%

Motor vehicle

16.7%

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.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses

are recognised in profit or loss in the period in which they arise. When revalued assets are sold, amounts included in the

revaluation surplus relating to that asset are transferred to retained earnings.

(c) Leases

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged

as expenses on a straight-line basis over the lease term.

(d) Financial Instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions

of the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the

purchase or the sale of the asset (ie trade date accounting is adopted).

Financial instruments (except for trade receivables) are initially measured at fair value plus transaction 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. Where available, quoted prices in an active market are used to determine fair value. In other

circumstances, valuation techniques are adopted.

Trade receivables are initially measured at the transaction price if the trade receivables do not contain a significant

financing component or if the practical expedient was applied as specified in paragraph 63 of AASB 15: Revenue fromContracts with Customers .

Classification and subsequent measurement

Financial liabilities

Financial liabilities are subsequently measured at:

- amortised cost; or

- fair value through profit and loss.

A financial liability is measured at fair value through profit and loss if the financial liability is:

- a contingent consideration of an acquirer in a business combination to which AASB 3: Business Combinationsapplies;

- held for trading: or

- initially designated as at fair value through profit or loss.

All other financial liabilities are subsequently measured at amortised cost using the effective interest method.

Page 11 of 22


NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2019

1. Summary of Significant Accounting Policies...continued

(d) Financial Instruments...continued

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interestexpense to profit or loss over the relevant period.

The effective interest rate is the internal rate of return of the financial asset or liability. That is. it is the rate that exactlydiscounts the estimated future cash flows through the expected life of the instrument to the net carrying amount at initialrecognition.

A financial liability is held for trading if it is:

- incurred for the purpose of repurchasing or repaying in the near term;

- part of a portfolio where there is an actual pattern of short-term profit taking: or

- a derivative financial instrument (except for a derivative that is in a financial guarantee contract or a derivative thatis in an effective hedging relationship).

Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not part ofa designated hedging relationship.

The change in fair value of the financial liability attributable to changes in the issuer's credit risk is taken to othercomprehensive income and is not subsequently reclassified to profit or loss. Instead, it is transferred to retained earningsupon derecognition of the financial liability.

If taking the change in credit risk to other comprehensive income enlarges or creates an accounting mismatch, thesegains or losses should be taken to profit or loss rather than other comprehensive income.

A financial liability cannot be reclassified.

Financial assets

Financial assets are subsequently measured at:

- amortised cost;

- fair value through other comprehensive income; or

- fair value through profit or loss.

Measurement is on the basis of two primary criteria:

- the contractual cash flow characteristics of the financial asset; and

- the business model for managing the financial assets.

A financial asset that meets the following conditions is subsequently measured at amortised cost:

- the financial asset is managed solely to collect contractual cash flows; and

- the contractual terms within the financial asset give rise to cash flows that are solely payments of principal andinterest on the principal amount outstanding on specified dates.

A financial asset that meets the following conditions is subsequently measured at fair value through other comprehensiveincome:

- the contractual terms within the financial asset give rise to cash flows that are solely payments of principal andinterest on the principal amount outstanding on specified dates; and

- the business model for managing the financial asset comprises both contractual cash flows collection and theselling of the financial asset.

By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair valuethrough other comprehensive income are subsequently measured at fair value through profit or loss.

The company initially designates a financial instrument as measured at fair value through profit or loss if:- it eliminates or significantly reduces a measurement or recognition inconsistency (often referred to as an

"accounting mismatch") that would otherwise arise from measuring assets or liabilities or recognising the gains andlosses on them on different bases;

- it is in accordance with the documented risk management or investment strategy and information about thegroupings is documented appropriately. so the performance of the financial liability that is part of a group offinancial liabilities or financial assets can be managed and evaluated consistently on a fair value basis; and

- it is a hybrid contract that contains an embedded derivative that significantly modifies the cash flows otherwiserequired by the contract.

The initial measurement of financial instruments at fair value through profit or loss is a one-time option on initialclassification and is irrevocable until the financial asset is derecognised.

Page 12 of 22





Equity instrumentsAt initial recognition, as long as the equity instrument is not held for trading or is not a contingent considerationrecognised by an acquirer in a business combination to which AASB 3 applies, the company makes an irrevocableelection to measure any subsequent changes in fair value of the equity instruments in other comprehensive income,while the dividend revenue received on underlying equity instruments investments will still be recognised in profit or loss.Regular way purchases and sales of financial assets are recognised and derecognised at settlement date in accordancewith the company's accounting policy.DerecognitionDerecognition refers to the removal of a previously recognised financial asset or financial liability from the statement offinancial position.Derecognition of financial liabilitiesA liability is derecognised when it is extinguished (ie when the obligation in the contract is discharged, cancelled orexpires). An exchange of an existing financial liability for a new one with substantially modified terms, or a substantialmodification to the terms of a financial liability, is treated as an extinguishment of the existing liability and recognition of anew financial liability.The difference between the carrying amount of the financial liability derecognised and the consideration paid andpayable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.Derecognition of financial assetsA financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the asset is transferredin such a way that all the risks and rewards of ownership are substantially transferred.All the following criteria need to be satisfied for the derecognition of a financial asset:

the right to receive cash flows from the asset has expired or been transferred;all risk and rewards of ownership of the asset have been substantially transferred; and

- the company no longer controls the asset (ie it has no practical ability to make unilateral decisions to sell the assetto a third party).

On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amountand the sum of the consideration received and receivable is recognised in profit or loss.On derecognition of a debt instrument classified as fair value through other comprehensive income, the cumulative gainor loss previously accumulated in the investment revaluation reserve is reclassified to profit or loss.On derecognition of an investment in equity that the company elected to classify as at fair value through othercomprehensive income, the cumulative gain or loss previously accumulated in the investments revaluation reserve is notreclassified to profit or loss, but is transferred to retained earnings.

ImpairmentThe company recognises a loss allowance for expected credit losses on:- financial assets that are measured at amortised cost or fair value through other comprehensive income;- lease receivables;- contract assets (eg amount due from customers under contracts);- loan commitments that are not measured at fair value through profit or loss; and- financial guarantee contracts that are not measured at fair value through profit or loss.Loss allowance is not recognised for:

financial assets measured at fair value through profit or loss; or- equity instruments measured at fair value through other comprehensive income.Expected credit losses are the probability-weighted estimate of credit losses over the expected life of a financialinstrument. A credit loss is the difference between all contractual cash flows that are due and all cash flows expected tobe received, all discounted at the original effective interest rate of the financial instrument.

The company uses the following approaches to impairment, as applicable under AASB 9: Financial Instruments:- the general approach;- the simplified approach;

the purchased or originated credit-impaired approach; and- low credit risk operational simplification.

Page 13 of 22





General approachUnder the general approach, at each reporting period, the company assesses whether the financial instruments arecredit-impaired, and:- if the credit risk of the financial instrument has increased significantly since initial recognition, the company

measures the loss allowance of the financial instruments at an amount equal to the lifetime expected credit losses;and

- if there has been no significant increase in credit risk since initial recognition, the company measures the lossallowance for that financial instrument at an amount equal to 12-month expected credit losses.

Simplified approachThe simplified approach does not require tracking of changes in credit risk at every reporting period, but instead requiresthe recognition of lifetime expected credit loss at all times.This approach is applicable to:- trade receivables; and- lease receivables.In measuring the expected credit loss, a provision matrix for trade receivables is used, taking into consideration variousdata to get to an expected credit loss (ie diversity of its customer base, appropriate groupings of its historical lossexperience, etc).

Purchased or originated credit-impaired approachFor a financial assets that are considered to be credit-impaired (not on acquisition or originations), the companymeasures any change in its lifetime expected credit loss as the difference between the asset's gross carrying amountand the present value of estimated future cash flows discounted at the financial asset's original effective interest rate.Any adjustment is recognised in profit or loss as an impairment gain or loss.Evidence of credit impairment includes:- significant financial difficulty of the issuer or borrower;- a breach of contract (eg default or past due event);- where a lender has granted to the borrower a concession, due to the borrower's financial difficulty, that the lender

would not otherwise consider;- the likelihood that the borrower will enter bankruptcy or other financial reorganisation; and- the disappearance of an active market for the financial asset because of financial difficulties.Low credit risk operational simplification approachIf a financial asset is determined to have low credit risk at the initial reporting date, the company assumes that the creditrisk has not increased significantly since initial recognition and, accordingly, it can continue to recognise a loss allowanceof 12-month expected credit loss.

In order to make such a determination that the financial asset has low credit risk, the company applies its internal creditrisk ratings or other methodologies using a globally comparable definition of low credit risk.A financial asset is considered to have low credit risk if:- there is a low risk of default by the borrower;- the borrower has strong capacity to meet its contractual cash flow obligations in the near term; and- adverse changes in economic and business conditions in the longer term, may, but not necessarily, reduce the

ability of the borrower to fulfil its contractual cash flow obligations.A financial asset is not considered to carry low credit risk merely due to existence of collateral, or because a borrowerhas a lower risk of default than the risk inherent in the financial assets, or lower than the credit risk of the jurisdiction inwhich it operates.

Recognition of expected credit losses in financial statementsAt each reporting date, the company recognises the movement in the loss allowance as an impairment gain or loss in thestatement of profit or loss and other comprehensive income.The carrying amount of financial assets measured at amortised cost includes the loss allowance relating to that asset.Assets measured at fair value through other comprehensive income are recognised at fair value with changes in fairvalue recognised in other comprehensive income. The amount in relation to change in credit risk is transferred fromother comprehensive income to profit or loss at every reporting period.For financial assets that are unrecognised (eg loan commitments yet to be drawn, financial guarantees), a provision forloss allowance is created in the statement of financial position to recognise the loss allowance.

Page 14 of 22





(e) Impairment of Assets

At the end of each reporting period, the company reviews the carrying amounts of its tangible and intangible assets to

determine whether there is any indication that those assets have been impaired. If such an indication exists, the

recoverable amount of the asset. being the higher of the asset's fair amount less costs of disposal and value in use, is

compared to the asset's carrying amount. Any excess of the asset's carrying amount over its recoverable amount isrecognised immediately in profit or loss.

Where the future economic benefits of the asset are not primarily dependent upon the asset's ability to generate net cash

inflows and when the company would, if deprived of the asset, replace its remaining future economic benefits, value in

use is determined as the depreciated replacement cost of an asset.

Where it is not possible to estimate the recoverable amount of a class of asset. the company estimates the recoverable

amount of the cash-generating unit to which the asset belongs.

Where an impairment loss on a revalued asset is identified, this is debited against the revaluation surplus in respect of

the same class of asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for

that same class of asset.

(f) Employee Provisions

Short-term employee benefits

Provision is made for the company's obligation for short-term employee benefits. Short-term employee benefits are

benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the

annual reporting period in which the employees render the related service, including wages. salaries and sick leave.

Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is

settled.

The company's obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as

part of accounts payable and other payables in the statement of financial position.

Contributions are made by the company to an employee superannuation fund and are charged as expenses when

incurred.

(g) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at-call with banks, other short-term highly liquidinvestments.

(h) Receivables

Receivables includes amounts due from donors and any outstanding grant receipts. Receivables expected to be

collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are

classified as non-current assets.

(i) 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.

(j) Income Tax

Income tax has not been provided for in the financial statements of the company. as it is a tax exempt entity under the

Income Tax Assessment Act 1997, being a charitable institution registered with the Australian Charities and Not-for-

profits Commission (ACNC).

Page 15 of 22





(k) Payables

Payables represents 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

amount being normally paid within trading terms.

(I) 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.

Key Estimates

(i) Impairment

The company assesses impairment at the end of each reporting period by evaluating conditions and events

specific to the company that may be indicative of impairment triggers.

(ii) Plant and equipmentAs indicated in Note 1(b), the company reviews the useful life of plant and equipment on an annual basis.

(m) New and Amended Accounting Standards Adopted by the CompanyInitial Application of AASB 9: Financial Instruments

The company has adopted AASB 9 with a date of initial application of 1 July 2018. As a result the company has changed

its financial instruments accounting policies as detailed in this note.

With this standard first adopted for the year ending 30 June 2019, there is no material impact on the transactions and

balances recognised in the financial statements.'

There were no financial assets/liabilities which the company had previously designated as at fair value through profit or

loss under AASB 139: Financial Instruments: Recognition and Measurement that were subject to reclassification/elected

reclassification upon the application of AASB 9. There were no financial assets/liabilities which the company has elected

to designate as at fair value through profit or loss at the date of initial application of AASB 9.

(n) Impact of Standards Issued but not yet Applied by the CompanyAASB 15: Revenue from Contracts with Customers - impacting for annual reporting periods beginning on or after 1

January 2019 (ie. 30 June 2020 reporting date for this entity). The company will review NFP guidance on AASB 15 when

relevant to determine the impact of the changes in its revenue recognition policy.

AASB 16: Leases - impacting for annual reporting periods beginning on or after 1 January 2019 (ie. 30 June 2020

reporting date for this entity). Operating leases currently held by the the company will need to be brought onto the

balance sheet and the associated assets and liabilities will be recorded.

(o) Economic Dependency

The company receives a significant portion of its operating revenue in the form of grants from the Department of Health

(the department). The company's ability to continue in its current capacity is dependent upon continued support from the

department. The department has confirmed funding to 30 June 2021 and the directors have no reason to believe that the

department will not continue to support the company beyond this date.

Page 16 of 22





(p) Material Uncertainty Related to Going Concern

Notwithstanding the current year's net deficit of $208k and net current asset deficiency of $48k,the financial report has

been prepared on the basis that the company is a going concern.The Board's decision to prepare the financial

statements on a going concern basis is supported by the following mitigating factors, which should enable the company

to continue to meet its debts as and when they fall due:

Generating sufficient revenue from its operating activities to achieve an operating surplus in 2019/20. Although the

company is forecasting a $114k cash shortfall for 2019/20, the expectation of directors is that any shortfall will be

covered by additional fundraising and or additional government funding;

Closely managing all expenditure items.

In the event that the company observes that it may not reach the required funding to finance nursing salaries in

May or June 2020, as suggested by the forward budgets and in any other period for that matter, the board can

choose to cease admissions of 24/7 guests as it did in August 2019, (whilst waiting for the State Government

recurrent grants to be paid).The balance of the company's operations will continue ie the op shop operations, fund

raising and donations from the community. Whilst this is not a preferred option (ceasing admissions) it is a fail safe

mechanism which will see the company always meeting its debts as and when they fall due.

As the board has the ability to forecast with 95% accuracy the income to be generated to meet the costs of the

operations, the company will continue to have discussions with both State and Federal governments to fund more

than 25% of the costs, which at the date of the directors' declaration is the situation.The board cannot guarantee a

positive outcome in any of those discussions, but directors have reason to believe favourable consideration will be

given by the Government agencies to increase the current grants when the company completes its quarterly

reports throughout the ensuing financial year.

Page 17 of 22



ThisYear

LastYear

2. CashUnrestrictedCash at bank (Bendigo) - operating 103,712 305,078Cash at bank (Bendigo) - debit cards 4,000 3,000Cash on hand 1,450 1,150

109,162 309,228RestrictedCash at bank (Bendigo) - Tewantin premises guarantee 7,089 6,930

Total 116,251 316,158

3. ReceivablesTrade debtors 7,487 0Less: provision for doubtful debts 0 0

7,487 0Other receivables 13,249 6,290

Total 20,736 6,290

4. Property, plant and equipmentLeasehold improvements at cost 31,581 12,312Less: provision for depreciation 1,614 512

29,967 11,800

Equipment and fittings at cost 171,189 136,443Less: provision for depreciation 23,051 5,749

148,138 130,694

Motor vehicles at cost 51,761 51,761Less: provision for depreciation 15,775 7,690

35,987 44,072

Work in progress 525 55214,617 186,620

(a) Movement in property, plant and equipment:Leasehold Equipment & Motor

Improvements Fittings VehiclesWork inProgress Total

Opening written down balance 11,800 130,694 44,072 55 186,620Current year's additions 19,269 34,746 0 471 54,486Current year's depreciation (1,102) (17,302) (8,085) 0 (26,489)Closing written down value 29,967 148,138 35,987 525 214,617

5. BorrowingsCurrentInsurance premium funding 5,048 0

Total 5,048 0

6. Future commitments(a) Non-cancellable operating leases contracted for but not capitalised in the financial

statements:- Less than one year 150,845 152,724- Greater than one year less than five years 273,613 391,952

Total 424,457 544,676

Note: The above non-cancellable operating leases are for shop leases at Cooroy, Tewantin, Noosaville andMaroochydore.

Page 18 of 22




7. Related Parties

From time to time directors are reimbursed for expenses incurred on behalf of the company. No director or their related

party entered into a contract with the company or received any other benefit from the company during the year ended 30

June 2019.

8. Events Subsequent to the End of the Reporting Period

No matters or circumstances have arisen since the end of the financial year which significantly affected or may

significantly affect the operations of the company, the results of those operations, or the state of affairs of the company in

future financial years.

9. Members' Guarantee

The company is incorporated under the Corporations Act 2001 and is a company limited by guarantee. If the company is

wound up, the constitution states that each member is required to contribute a maximum of $100 each towards meeting

any outstanding obligations of the company. At 30 June 2019, the number of members was 4 (2018: 4).

Page 19 of 22

(03)/2—/CI ,DateSigned - Carol Raye


DIRECTORS' DECLARATIONFOR THE YEAR ENDED 30 JUNE 2019

In accordance with a resolution of the directors of Katie Rose Cottage Hospice Limited (the company), the directors declarethat:

(a) there are reasonable grounds to believe that the company is able to pay all of its debts, as and when they become dueand payable; and

(b) the financial statements and notes satisfy the requirements of the Australian Charities and Not-for-profits CommissionAct 2012.

Signed in accordance with subsection 60.15(2) of the Australian Charities and Not-for-profits Commission Regulation 2013by:

Page 20 of 22

Love & PartnersREGISTERED COMPANY AUDITORS

INDEPENDENT AUDITOR'S REPORTFOR THE YEAR ENDED 30 JUNE 2019

TO THE MEMBERS OF KATIE ROSE COTTAGE HOSPICE LIMITED

Qualified OpinionWe have audited the financial report of Katie Rose Cottage Hospice Limited (the company), which comprises the statementof financial position as at 30 June 2019, the statement of profit or loss and other comprehensive income, statement ofchanges in equity and statement of cash flows for the year then ended, and notes to the financial statements, including asummary of significant accounting policies and the directors' declaration.

In our opinion, except for the effects of the matters described in the basis for qualified opinion section, the accompanyingfinancial report of the company has been prepared in accordance with Div 60 of the Australian Charities and Not-for-profitsCommission Act 2012 (the ACNC Act), including:

(a) giving a true and fair view of the company's financial position as at 30 June 2019 and of its financial performance forthe year then ended; and

(b) complying with Australian Accounting Standards to the extent described in Note 1, and Div 60 of the AustralianCharities and Not-for-profits Commission Regulation 2013.

Basis for Qualified and Limited Opinion(a) Qualification - Unexpended grant

For the year ended 30 June 2019 the company is reporting a $100k grant as revenue. The funding contract has a refundobligation to the funding authority. if it is not fully expended for its stated purpose. At year-end the grant has not been formallyacquitted and as a consequence an unexpended grant amount of $40,255 has not been reported as a current liability.Accordingly, revenue is overstated for the year ended 30 June 2019, while current liabilities and members' equity isunderstated by this amount for the year then ended.

In the directors opinion the full amount of the grant is revenue for the year ended 30 June 2019 and no amount is refundableto the funding authority at year-end.

(b) Limitation - Cash donations and fundraisingCash donations/fundraising is a significant source of revenue for the company. The company has determined that it isimpracticable to establish control over the collection of cash donations prior to entry into its financial records. Accordingly, asthe evidence available to us regarding fundraising revenue from this source was limited, our audit procedures with respect tocash donations had to be restricted to the amounts recorded in the financial records. We therefore are unable to express anopinion whether cash donations reported by the company is complete.

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of thecompany in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110: Codeof Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have alsofulfilled our other ethical responsibilities in accordance with the Code.

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

Information Other than the Financial Report and Auditor's Report Thereon The directors are responsible for the other information. The other information comprises the information included in the company'sannual report for the year ended 30 June 2019, but does not include the financial report and our auditor's report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assuranceconclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doingso, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit orotherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

ESTABLISHED 1952...benefit from our experience...

CONTACT66 Duporth Avenue, Maroochydore

PO Box 299, Maroochydore, OLD 4558

T (07) 5443 2600

E: [email protected]

CCHAlt EPFD A".:CO.

Liability limited by a scheme approved under Professional Standards Legislation

Page 21 of 22

CORPORATE INFORMATIONLove and Partners Auditors Pty Ltd

ABN 30 125 237 229

Authorised Audit Company Number: 313440

www.loyeandpartners.corn

We communicate with the directors regarding. among other matters, the planned scope and timing of the audit and significant auditfindings, including any significant deficiencies in internal control that we identify during our audit.

,.,to-v-c_ P)0 i1- ,--0\.1 -. .

0 Love & Partners Brett J BuntainDirector — Audit & AssuranceRCA No. 213172

REGISTERED COMPANY AUDITORS"Liability limited by a scheme approved under Professional Standards Legislation"

INDEPENDENT AUDITOR'S REPORT...CONTINUEDFOR THE YEAR ENDED 30 JUNE 2019

TO THE MEMBERS OF KATIE ROSE COTTAGE HOSPICE LIMITED

Emphasis of Matters(a) Material Uncertainty Related to Going Concern

We draw attention to Note 1(p) in the financial report, which indicates that the company recorded a current year deficit of$208k and has a net current asset deficiency of $48k at 30 June 2019. As stated in Note 1(p). these events or conditions.along with other matters as set forth in Note 1(p), indicate that a material uncertainty exists that may cast significant doubt onthe company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

(b) Basis of AccountingWe draw attention to Note 1 to the financial report, which describes the basis of accounting. The financial report has beenprepared for the purpose of fulfilling the company's financial reporting responsibilities under the ACNC Act. As a result, thefinancial report may not be suitable for another purpose. Our opinion is not modified in respect of this matter.

Responsibilities of the Directors for the Financial ReportThe directors of the company are responsible for the preparation of the financial report that gives a true and fair view and havedetermined that the basis of preparation described in Note 1 to the financial report is appropriate to meet the requirements of theACNC Act and is appropriate to meet the needs of the members. The directors' responsibility also includes such internal control asthe directors determine is necessary to enable the preparation of a financial report that gives a true and fair view and is free frommaterial 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 relating to going concern and using the going concern basis of accounting unless the directorseither 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.

Auditor's Responsibilities for the Audit of the Financial ReportOur 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 ofassurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintainprofessional scepticism throughout the audit. We also

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and performaudit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosures made by the directors.Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the auditevidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on thecompany's ability to continue as a going concern. If we conclude that a material uncertainty exists. we are required to drawattention in our auditor's report to the related disclosures in the financial report or. if such disclosures are inadequate. tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However,future events or conditions may cause the company to cease to continue as a going concern.Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether thefinancial report represents the underlying transactions and events in a manner that achieves fair presentation.

•

•

Date: 311 if 19

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