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Annual Report

Annual Reports and Financial Statements for the Year Ended 31 December 2013

Chairo Christian School Warragul District Parent-Controlled Christian School Association Incorporated abn 12 451 824 370

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Annual Reports Contents

Board Chairman’s Report for 2013...........................................................................4 Executive Principal’s Report for 2013......................................................................7 Introduction........................................................................................................7 Value Adding......................................................................................................7 Chairo Celebrates Thirty Years of Providing Christian Education............8 School Focus Verse.............................................................................................9 General Comments............................................................................................9 Leongatha Campus..........................................................................................10 Excellence in VCE Performance.....................................................................10 Successful Introduction of the Senior School ‘HeadStart’ Program.........11 Year 12 at Chairo Pakenham Campus...........................................................11 Languages Other Than English (LOTE).......................................................11 Th!nk Magazine................................................................................................12 Music Program.................................................................................................13 ICT Strategic Plan Update..............................................................................14 Conclusion........................................................................................................14


Financial Statements Contents

Statement of Financial Position................................................................................1 Current Assets....................................................................................................1 Non Current Assets...........................................................................................1 Total Assets.................................................................................................1 Statement of Financial Position................................................................................2 Current Liabilities..............................................................................................2 Non Current Liabilities.....................................................................................2 Total Liabilities...........................................................................................2 Net Assets............................................................................................................2 Members Funds..................................................................................................2 Accumulated Funds..................................................................................2 Statement of Comprehensive Income.....................................................................3 Statement of Cash Flows...........................................................................................4 Cash Flows from Operating Activities............................................................4 Net Cash Flow from Operating Activities......................................................4 Net Cash used in Investing Activities.............................................................4 Cash Flows from Financing Activities............................................................4 Net Cash Flow from Financing Activities......................................................4 Net Increase/(Decrease) in Cash Held............................................................4 Cash at End of Year............................................................................................4 Statement of Changes in Equity...............................................................................5 Notes to and forming part of the Financial Statements........................................6 Note 1: Statement of Significant Accounting Policies...................................6 Note 2: Revenue.................................................................................................9 Note 3: Surplus from Ordinary Activities......................................................9 Note 4: Receivables..........................................................................................10 Note 5: Capital Grants.....................................................................................10 Note 6: Borrowings..........................................................................................10 Note 7: Reserves...............................................................................................11 Note 8: Provisions............................................................................................11 Note 9: Cash Flows..........................................................................................12 Note 10: Financial Instruments......................................................................13 Note 11: Related Party Transactions/Directors Benefits.............................13 Note 12: Superannuation................................................................................13 Note 13: Segment Reporting...........................................................................13 Note 14: Economic Dependency....................................................................14 Note 15: Association Details...........................................................................14 Note 16: Non Current Assets..........................................................................14 Note 17: Security over Borrowings................................................................15 Directors’ Declaration..............................................................................................16 Independent Auditor’s Report...............................................................................17 3


Board Chairman’s Report for 2013

As you know, Chairo’s mission is “to provide excellence in Christ-centred education in partnership with families within a caring Christian community”. The year 2013 saw our “Christian community” begin to expand further by seeking to incorporate new “family members” from South Coast Christian College. After much prayer and deliberation, it was agreed that South Coast would become the Leongatha campus of Chairo Christian School. Much of the year was therefore spent in planning, discussing, working and praying. The Lord would see the tremendous efforts of so many from both schools, Christian Education National and even the Federal Government Education Minister’s office, bring about our Father’s intentions to further expand Christian education in our region. The 2013 Board of Directors consisted of Chris Dean, Mark Cutchie, Peter Morison, Melissa Rumble, Brian Tucker, Tanya van Praag, Stephen Young and myself. Michael van Leeuwen and Alan Piening – South Coast Christian College Board members – attended throughout much of the year as observers and provided us with insight into school life in Leongatha. As usual, Rob Bray (Principal) and Bryan Lewis (Business Manager) performed a key advisory role as non-voting members. The Board Executive consisted of me as Chairman, Peter Morison as Vice Chair, Chris Dean in the Secretary’s position and Mark Cutchie filling the role of Treasurer. 2013 was predominantly a year of preparation for the new Leongatha Campus of Chairo, and continued work on our Strategic Plan. New full members of the Association in 2013 were Paul & Vicki Remyn, Brian & Joanne Stevenson, Diane Sydenham, Joanne Pedersen, Alan Rumble, Simon & Melissa Martin, Michael Sterling, Sean Walsh, Ray Patchett and John Claxton. Perhaps you’d like to join them and influence God’s work among the children under our care by gaining voting rights. If so, please contact Caroline Weatherhead in Central Administration at the Drouin Campus and ask for an application form. General Meetings of the Association are an important opportunity for all members, both full and associate, to learn what’s happening in detail, rather than in brief summary form in a report like this. 2013 saw presentations regarding the South Coast Christian College move to become a campus of Chairo; an update regarding Board member attendance at the Christian Education National (CEN) AGM in Canberra; a personal introduction to the first Th!nk magazine from Jane Ward; details of the fact-finding trip to SPH International School in Indonesia; specifics around future building projects; important finance and budget updates; an informative talk from Michelle Dempsey (State Executive Officer for CEN); strategic plan updates; and of course an opportunity to vote for new and re-nominated Board members. 4


In July, Board members attended the annual Board Development and Training Day. This is an important opportunity for the Board members to undertake vital training and to spend large “chunks of time” in deliberation of matters pertinent to our role, rather than just the three or so hours at regular Board meetings. Some topics covered on this occasion included discussion around deeper involvement options for Association members in various activities of the School; dialogue around the level of full membership of the Association; commencement of deliberations around the new Strategic Plan (for 2014 and beyond); and a special presentation from the then new Head of Middle School (Drouin), Annette Martin. As detailed at the May Annual General Meeting, the current Strategic Plan, initiated in 2011 (to be replaced in 2014), continued to be delivered, with some of the key outcomes being: • Over recent years, Chairo has implemented a number of key reviews, designed to provide us with clear data to best assist future planning. Recommendations from these reviews are being progressively implemented by the School’s Executive Leadership Team. • Our Pakenham Campus now boasts a Concert Band; a Grade Two Strings Program; and Junior, Middle and Senior School Choirs. Significant progress has also been made at our Drouin and Drouin East campuses. Plans are also currently being considered to build a Performing Arts Centre at our Drouin Campus. • Our involvement in Christian Education National and the wider Christian education community continues to expand. In many ways, with the growth of our Pakenham Campus and the addition of Leongatha, Chairo is now a larger school within the Christian schooling movement. Wherever possible, we ensure that we attend, and contribute to, all significant events of direct relevance to Christian education. • A ‘Mission and Service Program/Trips’ Review will occur through the second half of 2014. Key developments already occurring include an inaugural Indonesian Cultural and Language Trip planned for August 2014, and a Year 10 Service and Cultural Program replacing the Canberra Trip from 2017. • Other key plan areas include: • Addressing the needs of ‘gifted and talented’ students. • Further development of our support in choosing study and career pathways. • More ways to further support and engage parents and families. • The successful introduction of the dual LOTE program, offering both Indonesian and French progressively, commencing at the Years 5/6 levels in 2013. 5


As noted above, planning for the new Strategic Plan for 2014 and beyond was commenced during the latter half of 2013, for presentation mid-2014. As acknowledged from the outset, Strategic Plan 2011 was a predominantly operational plan – reviews and consolidation in the main. Much of its work was completed, initiated or delayed for implementation at a more appropriate time from 2014. As Chairo continues to grow and plan, it is crucial that we remember all our blessings come from our Heavenly Father and it is to Him that all praise and glory must continue to be given. It is also to Him that we ask you to continue in prayer for your Board and Senior Management, as we continue to serve you, our parents and students, in our aim to fulfil our mission and vision. Jeff Calway Board Chairman

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Executive Principal’s Report for 2013 Introduction

It is my great pleasure to present this report regarding the 2013 school year. I am confident that you will receive further assurance that Chairo Christian School is a dynamic teaching and learning community as you read through the summary of key events contained in the following pages. However, it is important that we always remember that all programs at Chairo are presented from a Christian worldview perspective. Our School is wisely governed by a Board of Christian parents. All staff members (both teaching and non-teaching) have an active Christian faith. Considerable time and resources are invested each year on professional development activities that ensure the ability of our staff members to deliver ‘excellence in Christcentred education’, as described in our Mission Statement. This report has been distributed to each Chairo family and all staff members as part of the Annual General Meeting mailout. I would encourage you to attend our AGM in the Drouin Campus Library, commencing at 7.30 pm on Thursday 29 May. Our guest speaker will be Travis Waterhouse, who was Senior School captain at the Drouin Campus in 2007. Travis is a qualified pilot who now lives in Alice Springs and trains commercial pilots in relation to matters of air safety and new aircraft types.

Value Adding

Please note that the rest of this report forms one component entitled ‘Value Adding’ of the larger Chairo Christian School Annual Report that covers the key reporting areas as required by the Australian Government for funding under the Schools Assistance Act 2004. These guidelines require that school performance information is made publicly available to the School and wider communities in the prescribed formats. The complete report will be emailed to all families and staff members, and made available on the Chairo website, by the end of June this year. We have always had a strong desire to ensure that our School community is kept fully informed about Chairo’s programs and performance. As partners in the educational process, our parents are greatly valued and we wish to maintain effective communication with you at all times. We do this through a variety of methods including newsletters, the School website, SMS and email messages, telephone conversations, personal interviews, surveys and direct mail outs.

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Chairo Celebrates Thirty Years of Providing Christian Education

The year 2013 marked another significant milestone in the rich history of Chairo Christian School. This year saw fitting celebrations recognising that Chairo’s first Prep to Grade 6 class had commenced operating in February 1983 at our Drouin East site. The School began with one teacher and a class of 19 students. At the commencement of 2013, these numbers had grown to 1026 students from K3 to Year 12 being educated on three geographically separate campuses (Note: In 2014, with the inclusion of our Leongatha Campus, we now have four separate campuses and a further 122 students.) On 9 May this year, over 150 past and present members of the Chairo Christian School community gathered in Heritage Hall at the Drouin East Campus to celebrate this wonderful event and to give thanks to God for His generous provision throughout this time.

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School Focus Verse

In 2013, we continued our recent practice of highlighting a Focus Verse taken directly from God’s word. This verse is designed to provide specific guidance and direction for our entire School community. The verse chosen for 2013 came from Colossians 3:23 – ‘Whatever you do, work at it with all your heart, as working for the Lord, not for men.’ Throughout the year, this verse was placed on the top of all meeting agendas, on our website and at the beginning of all newsletters. It provided a consistent reminder that Chairo is God’s School and that it is our desire to provide teaching and learning programs that appropriately bring honour to His name.

General Comments

It is not possible within the scope of this brief report to highlight all of the diverse teaching and learning programs that occurred throughout 2013. I would simply emphasise that it continues to be our intention to ensure that families are progressively provided with regular information about key events and programs through a variety of sources. These include the website, newsletters, the annual Outlook magazine and numerous other communication channels. During the 2013 year, Chairo introduced another convenient method designed to keep families up-to-date with events occurring at all Chairo campuses. This occurred through the creation of Facebook pages for each campus. We generally aim to post several photographs and short stories most school days on each of these pages. Visit Chairo Christian School, Drouin, Drouin East, Leongatha or Pakenham and ‘like’ the page/s so that posts will appear in your newsfeed. Throughout 2013, Chairo students across all campuses continued to produce excellent performances in academic, sporting and cultural fields. It is also important to note that another year in the life of Chairo has seen the continuation and further development of numerous programs. These have included the provision of excellent chaplaincy support at all campuses. The student mentoring program has continued to flourish and many of our students have been actively involved in valuable leadership training camps and special programs. Our Early Learning Centres at Pakenham and Drouin East have, once again, provided excellence in Christ-centred Kindergarten programs for our three and four year old children. Students with learning needs have been professionally and compassionately supported by the qualified members of our Learning Support Teams. We have also continued to maintain contact with our alumni through the Alumni Newsletter and the holding of another successful Ten Year Student Reunion.

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Leongatha Campus

The process that saw South Coast Christian College become Chairo’s Leongatha Campus was one of the most challenging and rewarding highlights of 2013, and certainly occupied much of the attention of the Chairo Board and School Leadership. All Chairo families received progress reports throughout 2013 as the boards of the two schools worked harmoniously together on this rather complicated merger process. We were delighted to announce to both school communities in late 2013 that the former South Coast Christian College would become Chairo’s Leongatha Campus from the commencement of 2014. This important decision has been appropriately recognised through the holding of a variety of special celebratory community events.

Excellence in VCE Performance

Chairo’s Year 12 class of 2013 achieved excellent results in the Victorian Certificate of Education (VCE). All 73 students satisfied the full requirements of the VCE course, which represented a 100% pass rate and opened the door for our students to many course and career areas. James Murray was announced as the dux of Year 12. He received an excellent Australian Tertiary Admission Rank (ATAR) score of 98.15. We were delighted that a total of nine students achieved an ATAR score of 90 or above. This performance placed these students in the top 10% of VCE graduates across Victoria. 10


Successful Introduction of the Senior School ‘HeadStart’ Program

Towards the end of the 2013 School year, all students moving into Years 10, 11 and 12 in 2014, at both our Drouin and Pakenham campuses, participated in a very successful nine day ‘HeadStart’ program. This initiative was part of an extensive program to assist students to successfully make the transition to the next year level. In most cases, the ‘HeadStart’ program was presented by the actual teacher taking that subject in the coming year. There was a genuine focus on academic rigour as all students commenced learning tasks that would have them well-equipped for the coming year. (Note: A small number of senior students from our new Leongatha Campus also travelled by bus to Drouin to participate in the ‘HeadStart’ program.)

Year 12 at Chairo Pakenham Campus

A great deal of careful planning occurred during 2013 for the introduction of our inaugural Year 12 VCE program at the Pakenham Campus in 2014. We successfully applied for Year 12 registration, held major VCE Information Sessions for parents and students, and recruited a quality Year 12 teaching team in readiness for the coming year.

Languages Other Than English (LOTE) Introduction of French

2013 was a pivotal year for Chairo’s LOTE programs which, for the first time, saw the commencement of an implementation program to introduce French into the curriculum. Chairo has traditionally offered a vibrant Indonesian program from Prep through to VCE. In 2013, students at the Years 5 and 6 levels had the opportunity to study both the French and Indonesian languages. This dual language program will be progressively implemented at higher levels over the coming years, culminating in students having the opportunity to choose which language they wish to pursue through to VCE level, once the study of languages has become optional. (Note: Due to the smaller size of our Leongatha Campus, French is currently the only LOTE offering.)

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Indonesian Student Language and Cultural Trip

Another important development in 2013 saw a small group of Chairo staff members accepting an invitation from Peter Wells, Chairo’s former Deputy Principal (Teaching & Learning), to visit SPH International School (Sentul City Campus) in Indonesia. Peter is now Campus Principal at this distinctively Christian Indonesian International School. One significant outcome of this exploratory visit is that plans have now been finalised to develop a major new initiative that will greatly enrich Chairo’s Indonesian program. This initiative will see a group of Years 9 and 10 Indonesian students travelling to Indonesia in 2014 on a 15 day ‘Language and Cultural Trip.’ We believe that this opportunity may well encourage even more Chairo students to pursue the study of Indonesian through to the VCE level.

Th!nk Magazine

Chairo has always placed great emphasis on the quality of our teaching and learning programs. In 2013, we launched another major initiative in this important area when we published our first edition of the Th!nk teaching and learning magazine. The philosophy behind the publication of this colourful and informative magazine was outlined inside the cover of our inaugural edition. It stated ‘At Chairo we Th!nk… “But why?” This is one of the most frequently asked questions in our society. People, young and old, are questioning. They want to understand the deeper explanations that lie behind a process or activity. I am delighted to state that this first edition of Chairo Christian School’s Th!nk magazine is designed specifically to answer the “But why?” questions. We want to explore with you the reasons why we run our teaching and learning programs.’ Two editions of Th!nk will be published each year and I am confident that this publication will provide families with an informative exploration of the thinking behind the teaching and learning programs that occur at Chairo.

Th!nk 12

Chairo Christian School

Teaching & Learning Magazine 1 Winter 2013 • Issue 1


Music Program

Music has been a major area of strategic importance at Chairo for many years and recently we have witnessed significant developments in the music program at all campuses. These have culminated in the formation of many new student groups, including a Concert Band at Pakenham Campus and Junior, Middle and Senior School Choirs at Drouin and Drouin East, as well as a Senior School Worship Band and a Junior School Recorder Group. At all campuses, we can look forward to further significant developments in future years. These include an in-principle agreement to build a modern Performing Arts Centre at our Drouin Campus and the conducting of an inaugural music tour to Tasmania by the Pakenham Concert Band in 2014.

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ICT Strategic Plan Update

2013 was another very busy year in the world of ICT (Information and Communication Technology). Chairo has a well-established ICT Strategic Plan and recent years have seen many elements of this planning coming to fruition, resulting in significant teaching and learning benefits for students and staff. Following are some of the achievements that occurred in 2013: • After a successful trial in 2012, all Years 5 and 6 students were provided with individual access to iPads in their classrooms. • Planning occurred throughout 2013 to ensure that all students in Years 7 and 8 would be issued with a Personal Learning Device (a PC tablet) at the start of 2014. This device has the combined benefit of a small portable tablet and the functionality of a networked PC. • Throughout 2013, Chairo has been trialling new Learning Management System (LMS) software. This will result in a staged implementation across Years 5-12 in 2014. Students and parents will then have 24/7 access to resources such as work requirements and course outlines and notes. • Chairo’s ICT Team also worked tirelessly throughout the second half of 2013 to ensure that the new Leongatha Campus will be provided with high quality ICT facilities and equipment that will greatly enhance their teaching and learning programs.

Conclusion

As always, it is my desire on behalf of the School Board and all members of staff to thank every member of the Chairo Christian School community for the many valuable contributions that you made to the success of our teaching and learning programs throughout 2013. We do, indeed, have much to celebrate as we reflect on the wonderful achievements of the year. What must always distinguish the educational programs provided at Chairo is a recognition that we are working together in a powerful partnership between home and school under God’s sovereign guidance. This partnership is expressly designed to produce young men and women of upright character. It is our shared desire that they will go out into their various communities equipped with the skills, knowledge and character qualities that will allow them to make positive contributions to our society. Rob Bray Executive Principal 14


Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN 12 451 824 370 Statement of Financial Position as at 31 December 2013 Note

2013 $

2012 $

9(a)

616,361

551,899

4

284,238

267,795

266,058

228,732

1,166,657

1,048,426

1,055,000

715,000

40,395,500

22,758,865

(16,261,315)

(2,853,951)

24,134,185

19,904,914

5,374,300

4,859,645

(3,713,296)

(3,266,096)

16

1,661,004

1,593,549

16

68,256

38,858

26,918,445

22,252,321

28,085,102

23,300,747

Current Assets Cash Assets Receivables (Net) Prepayments Total Current Assets Non Current Assets Land At Deemed Cost

16

Buildings and Improvements at Deemed Cost Less Provision for Depreciation 16 Plant and Equipment at Cost Less Provision for Depreciation

Capital Works in Progress Total Non Current Assets Total Assets

* The accompanying notes form part of the financial statements.

Page 1

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Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 Statement of Financial Position as at 31 December 2013 Note

2013 $

2012 $

Creditors

198,560

317,283

Accrued Expenses

883,831

860,350

Fees Received in Advance

106,618

92,996

Current Liabilities

Borrowings

6

400,000

1,335,255

Provision for Employee Entitlements

8

126,811

123,777

37,383

57,194

1,753,203

2,786,857

1,088,265

954,620

Total Non-Current Liabilities

1,088,265

954,620

Total Liabilities

2,841,468

3,741,477

25,243,634

19,559,271

9,574,497

8,618,323

15,669,137

10,940,948

25,243,634

19,559,271

Other Total Current Liabilities Non Current Liabilities Provision for Employee Entitlements

8

Net Assets Members Funds Accumulated Funds Reserves

7

Total Equity

* The accompanying notes form part of the financial statements.

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Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 Statement of Comprehensive Income for the year ended 31 December 2013 Note

2013 $

2012 $

2/5

15,805,494

14,917,310

(10,317,545)

(10,064,522)

(66,476)

(111,774)

(1,398,455)

(956,921)

Transport Costs

(639,821)

(704,303)

Cleaning/Maintenance/Utilities Costs

(715,028)

(690,005)

Tuition/camps/excursion expenses

(804,127)

(733,470)

(1,489,228)

(1,164,472)

374,814

491,843

215,027

1,052,030

589,841

1,543,873

Net Gain on Revaluation of Land & Buildings

5,094,522

-

Total Comprehensive Income

5,684,363

1,543,873

Revenue from ordinary activities Employee benefits expense Borrowing costs expense Depreciation and amortisation expense

Other expenses from ordinary activities Surplus from ordinary activities Revenue from capital grants

5

Total Surplus Other Comprehensive Income

* The accompanying notes form part of the financial statements.

Page 3

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Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 Statement of Cash Flows for the year ended 31 December 2013 Note Cash Flows from Operating Activities Receipts from Student Charges Other Income Grants Interest Received Borrowing Costs Paid Payment to Suppliers and Employees

Net Cash Flow from Operating Activities

9(b)

2013 $

2012

$

4,803,525 212,166

4,606,069 230,938

10,690,312 46,739

9,972,929 51,941

(66,476) (13,928,965)

(111,774) (13,141,373)

1,757,301

1,608,730

Cash Flows from Investing Activities Proceeds from Disposal of Fixed Assets

(2,554)

-

Payments for Property Plant & Equipment

(970,057)

(2,058,877)

Net Cash used in Investing Activities

(972,611)

(2,058,877)

Proceeds from capital grants Repayment of Loans

215,027 (935,255)

1,052,030 (217,422)

Net Cash Flow from Financing Activities

(720,228)

834,608

64,462

384,461

551,899

167,438

616,361

551,899

Cash Flows from Financing Activities

Net Increase/(Decrease) in Cash Held Cash at beginning of Year

Cash at End of Year

9(a)

* The accompanying notes form part of the financial statements.

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Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 Statement of Changes in Equity for the year ended 31 December 2013 2013 Retained surplus Balance at 1 January 2013 Net Surplus/ deficit Revaluation Increment Transfer from retained surplus for grants received Transfer to retained surplus for amortisation Balance at 31 December 2013

$ 8,618,324

Capital Grants Reserve $ 6,301,470

Asset Revaluation Reserve $ 4,639,478

Total $ 19,559,272

589,841

-

-

589,841

-

-

5,094,522

5,094,522

(98,971)

98,971

-

-

465,304

(465,304)

-

-

9,574,498

5,935,137

9,734,000

25,243,635

Retained surplus

Asset Revaluation Reserve $ 4,639,478

Total

$ 7,331,096

Capital Grants Reserve $ 6,044,825

$ 18,015,399

1,543,873

-

-

1,543,873

(691,029)

691,029

-

-

434,384

(434,384)

-

-

8,618,324

6,301,470

4,639,478

19,559,272

2012

Balance at 1 January 2012 Net Surplus/deficit Transfer from retained surplus for grants received Transfer to retained surplus for amortisation Balance at 31 December 2012

* The accompanying notes form part of the financial statements.

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Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 Notes to and forming part of the Financial Statements for the year ended 31 December 2013 Note 1: Statement of Significant Accounting Policies The school has elected to early adopt the pronouncements AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010–2: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements to the annual reporting period beginning 1 January 2010. The financial report is a general purpose financial report that has been prepared in accordance with Accounting Standards, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the Associations Incorporation Reform Act 2012. The financial report is prepared on an accruals basis and is based on historical costs and does not take into account changing money values except where stated to be at current values. Cost is based on the fair values of the consideration given in exchange for assets. The accounting policies have been consistently applied, unless otherwise stated. The Board have determined that the School is a not for profit entity as the principal objective is not the generation of profit. The financial report does not fully comply with International Financial Reporting Standards (IFRS) as some Australian equivalents to IFRS relating to not for profit entities are inconsistent with IFRS. The following is a summary of the significant accounting policies adopted by the Association in the preparation of the financial report. (a)

Property, Plant and Equipment Fixed assets are initially brought to account at cost. Property was revalued in July 2013 by an external independent valuer. Increases in the carrying amount arising on the revaluation of Property is recognised in other comprehensive income, and accumulated in the Asset Revaluation Reserve in Equity.

(b)

Depreciation The depreciable amount of all fixed assets are depreciated on a straight line basis over the useful lives of the assets to the school from the time the asset is held ready for use, except for buildings and site improvements which are depreciated using the diminishing value basis with a 10% residual value. The depreciation rates used for the current and comparative year for each class of depreciable asset are:Class of Fixed Asset Depreciation Rate Buildings & Site Improvements 20-40 years, Diminishing Value Plant and Equipment 10% - 50%

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Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 Notes to and forming part of the Financial Statements for the year ended 31 December 2013 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 as the depreciated replacement cost of an asset. (c)

Cash For the purposes of the Statement of Cash Flows, cash includes cash on hand and in at call deposits with banks or financial institutions, net of bank overdrafts, and investments in money market instruments.

(d)

Revenue Revenue from tuition fees is bought to account when students are invoiced. Interest revenue is recognised on a proportional basis. Government grants are recognised when the right to receive a grant has been established. Revenue received for capital purposes is recorded as income through the statement of financial performance and then transferred to capital reserves.

(e)

Leases Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to the Association are classified as finance leases. Finance leases are capitalised recording an asset and a liability equal to the present value of the minimum lease payments, including any guaranteed residual value. Leased assets are amortised over their estimated useful lives. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

(f)

Employee Entitlements Provision is made for the Association’s liability for employees’ entitlements arising from services rendered by employees to balance date. Employee entitlements expected to be settled within one year together with entitlements arising from wages and salaries and annual leave, which will be settled after one year, have been measured at their nominal amount.

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Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 Notes to and forming part of the Financial Statements for the year ended 31 December 2013 Other employee entitlements payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those entitlements utilising a discount rate representative of national government guaranteed securities of relevant maturity. Contributions are made by the Association to employee superannuation funds and charged as expenses when incurred. The Association has no legal obligation to cover any shortfall in the funds’ obligations to provide benefits to employees on retirement. Long Service Leave is accrued in full in respect of all staff with more than 7 year’s service with the Association. The Current portion reflects Long Service Leave scheduled in the following 12 months as the Board is of the opinion that this provides more relevant and reliable information. (g)

Income Tax In accordance with Section 50-5 of the Income Tax (Assessment) Act, the Association is exempt from income tax.

(h)

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. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the Statement of Financial Position are shown inclusive of GST.

(i)

Working Capital Deficiency The financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and the realization of assets and settlement of liabilities in the ordinary course of business. For the year ended 31 December 2013 the School recorded a net current asset deficiency of $586,546 (2012: $1,738,431) however it also recorded a surplus from operating activities of $374,814 (2012: $491,843) and positive cash inflows from operating activities of $1,757,301 (2012: $1,608,730)

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Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 Notes to and forming part of the Financial Statements for the year ended 31 December 2013 Note 2: Revenue Fees Revenue

2013

2012

$

$

4,225,323

4,015,021

Government Grants: - State

3,104,406

2,770,219

- Commonwealth

7,592,978

7,202,711

- Capital

215,027

10,912,411

1,052,030

11,024,960

Interest Received

46,739

51,941

Student Transport

289,480

347,002

Other Income

518,013

510,400

- Donations

31,110

20,016

-Profit/(loss) on disposal of fixed assets

(2,554)

-

16,020,522

15,969,340

Educational Consumables, Expenses and Camps

804,127

733,470

Occupancy maintenance and operating expenses

715,028

690,005

Movement in provisions (Note 8)

136,679

2,133

Non Operating Activities

Note 3: Surplus from Ordinary Activities Expenses

Bad and doubtful debts: - bad debts written off

34,533

- movement in provision for doubtful debts (Note 4)

21,000

26,826 55,533

8,500

35,326

Remuneration of the auditors for: - auditing or reviewing the financial report

12,500

- other services

850

Page 9

12,360 13,350

2,200

14,560

23


Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 Notes to and forming Part of the Financial Statements for the year ended 31 December 2013 2013 $

2012 $

Debtors – Fees

421,064

404,934

Sundry Debtors

27,274

5,961

(164,100)

(143,100)

284,238

267,795

98,971

743,230

116,056

258,800

-

50,000

215,027

1,052,030

-

4,555

400,000

1,330,700

400,000

1,335,255

Note 4: Receivables

Less Provision for Doubtful Debts

Note 5: Capital Grants Block Grant Authority – Aust. Govt. Aust. Govt. Sec. School Computer Fund (no amortisation) Solar Grant – Aust Govt. (no amortisation)

Note 6: Borrowings Current Hire Purchase Bank Loans & Bills

24

Page 10


Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 Notes to and forming Part of the Financial Statements for the year ended 31 December 2013 Note 7: Reserves

2013 $

2012 $

Balance at beginning of year

6,301,470

6,044,825

Transfer (from) / to Reserve

(366,333)

256,645

Balance at end of year

5,935,137

6,301,470

Balance at beginning of year

4,639,478

4,639,478

Net Gain On Revaluation of Land & Buildings

5,094,522

-

Balance at end of year

9,734,000

4,639,478

15,669,137

10,940,948

Capital Grants Reserve:

Asset Revaluation Reserve

Total Reserves Balance at end of year

The capital grants reserve is held in recognition of grants received for capital purposes. There is a requirement for these grants to be refunded, on a pro rata basis, should the entity cease operations within a 20 year period after the receipt of the grant. The entity therefore recognises the grant as income and transfers the entire grant from retained earnings to the reserve in the year it is received and then transfers 5% from the reserve into retained earnings annually.

Note 8: Provisions Current Long Service Leave Annual Leave Maternity Leave

2013 $

2012 $

35,992 84,382 6,437

38,764 77,313 7,700

126,811

123,777

1,088,265

954,620

Non Current Long Service Leave

*No annual leave was provided for originally in the 2012 financials. This has been amended for 2013 with the Provision for Annual Leave for 2012 transferred from retained profits.

Page 11

25


Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 Notes to and forming Part of the Financial Statements for the year ended 31 December 2013 Note 9: Cash Flows (a) Reconciliation Of Cash For the purpose of the Statement of Cash Flows, the entity considers cash to include cash on hand, in banks and investments in money market instruments. Cash at the end of the reporting period as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial position as follows:

Cash on Hand Cash at Bank – General Account Cash at Bank – Building Fund Cash at Bank – Canteen Account Cash at Bank – 24 hr Call

2013 $

2012 $

1,400

1,000

39,081 9,150

43,967 5,850

-

2,784

566,730

498,298

616,361

551,899

(b) Reconciliation of Net Cash Provided by Operating Activities to Operating Surplus 2013 $

Surplus/(Deficit) from ordinary activities Non Cash Flows in Operating Surplus/Deficit Depreciation (Profit)/Loss on sale of assets Decrease/(Increase) in operating receivables Decrease/(Increase) in prepayments Increase/(Decrease) in payables & accrued expenses Increase/(Decrease) in fees in advance Increase/(Decrease) in provision for employee entitlements Net Cash Provided by Operating Activities

26

Page 12

374,814

2012 $ 491,843

1,398,455

956,921

2,554

-

(16,443)

16,666

(37,326)

210,984

(115,054)

(119,420)

13,622

(27,710)

136,679

79,446

1,757,301

1,608,730


Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 for the year ended 31 December 2013 Note 10: Financial Instruments The school’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, and borrowings. The totals for each category of financial instruments are as follows: Cash and cash equivalents Loans and receivables Total financial assets Financial liabilities at amortised cost - Trade and other payables - Interest bearing liabilities

2013 616,361 284,238 900,599

2012 551,899 267,794 819,693

1,119,774 400,000 1,519,774

1,234,827 1,335,255 2,570,082

Note 11: Related Party Transactions/Directors Benefits Directors The names of Directors who have held office during the financial year are: Christopher Dean Stephen Young Jeff Calway

Peter Morison Brian Tucker Tanya Van Praag

Mark Cutchie Melissa Rumble

A number of directors are parents of children currently attending the school and, therefore, receive tuition and other schooling services; fees are set for and paid by the relevant directors at the published, scheduled rates. No director, a firm of which a director is a member or an entity in which a director has a substantial financial interest, receives remuneration from services rendered to the economic entity other than reimbursement of out-of-pocket expenses as provided for in the entity’s constitution. The Chairman received an honorarium of $7,000 during the financial year to assist in covering such out-of-pocket expenses. Note 12: Superannuation The Association participates in employer sponsored superannuation plans, which are defined contribution plans. Benefits provided under the plans are based on accumulated contributions and earning for each employee. The Association contributes to the plans pursuant to the Superannuation Guarantee Scheme. Note 13: Segment Reporting The entity operates predominantly in one sector (education) and one geographic location (West Gippsland). Page 13

27


Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 for the year ended 31 December 2013 Note 14: Economic Dependency A significant portion of income is received by way of recurrent grants from the State and Australian Governments. Note 15: Association Details The registered office and principal place of business of the Association is: 76 Balfour Road Drouin Victoria 3818 Note 16: Non Current Assets This table shows the movement in the carrying amount of each class of property, plant and equipment between the beginning and the end of the current financial year.

Balance at Beginning of the Year Transfers Additions Asset Revaluation Asset Retirement Depreciation Retirement Asset Adjustment Depreciation Adjustment Depreciation Expense Assets Sold Depreciated Value of Assets Sold Balance at End of the Year

Land

Buildings 19,904,914

Plant and Equipment 1,593,549

Work in Progress 38,858

715,000 340,000 -

Total

(28,755) 679,918 (108,039) 106,455 (3,601) (1,685) (573,388) (4,873) 1,423

(254,406) 283,804 -

-

283,161 3,319 4,754,522 (11,019) 11,019 6,988 936 (819,655) -

-

967,041 5,094,522 (119,058) 117,474 3,387 (749) (1,393,043) (4,873) 1,423

1,055,000

24,134,185

1,661,004

68,256

26,918,445

22,252,321

An independent valuation of the entity’s land and buildings was performed by Mark Eddy from PP+E Valuations Pty Ltd to determine the fair value of land and buildings. The valuation which conforms to Australian Valuation Standards, was determined by reference to the basis of the land and site improvements, together with an assessment of the “in use” written down value of the structural improvements on the land. The effective date of the valuation was 4th of July 2013.

28

Page 14


Financial Statements for the Year Ended 31 December 2013

Note 17: Security over Borrowings General Security Interest by WARRAGUL DISTRICT PARENT CONTROLLED CHRISTIAN SCHOOL ASSOCIATION INC comprising: First Ranking Charge over All Present & After Acquired Property. First Registered Mortgage by WARRAGUL DISTRICT PARENT CONTROLLED CHRISTIAN SCHOOL ASSOCIATION INC over Non-Residential Real Property located at 435 Lardners Track WARRAGUL VIC 3820. First Registered Mortgage by WARRAGUL DISTRICT PARENT CONTROLLED CHRISTIAN SCHOOL ASSOCIATION INC over Non-Residential Real Property located at 76 Balfour Road DROUIN VIC 3818. First Registered Mortgage by WARRAGUL DISTRICT PARENT CONTROLLED CHRISTIAN SCHOOL ASSOCIATION INC over Non-Residential Real Property located at 585 Bald Hill Road NAR NAR GOON VIC 3812. Business Mortgage by WARRAGUL DISTRICT PARENT CONTROLLED CHRISTIAN SCHOOL ASSOCIATION INC over all assets of the association including assets of the school sites situated at 76 Balfour Rd Drouin Vic, 435 Lardners Track Warragul Vic and 585 Bald Hill Rd Nar Nar Goon Vic. Note 18: Subsequent Events The Association has entered into an agreement with Leongatha Association for Parent Controlled Christian Education (LAPCCE) (ACN 005 426 308), a company limited by guarantee, to have the assets of the Company transferred to the Association by way of gift. This transfer is due to take place after the full liquidation of LAPCCE is finalized on the 18th of April 2014.

Page 15

29


Financial Statements for the Year Ended 31 December 2013

Warragul District Parent-Controlled Christian School Association Incorporated Chairo Christian School ABN: 12 451 824 370 for the year ended 31 December 2013 Directors’ Declaration In the opinion of the directors of Warragul District Parent Controlled Christian School Association Incorporated (a)

The financial report as set out on pages 1 to 15: (i)

(ii) (b)

Presents fairly the financial position of the Association as at 31 December 2013 and of the Association’s performance, as represented by the results of its operations and its cash flows, for the year ended on that date: and Complies with the Associations Incorporation Reform Act 2012 and Accounting Standards in Australia; and

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

Signed in accordance with a resolution of the board members:

Dated at Drouin this

30

: Chairman

Mr. Jeff Calway

: Treasurer

Mr. Mark Cutchie

day of April 2014

Page 16


31



Annual Report 2013 Chairo Christian School Victoria