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AUSTRALIAN HUMAN RESOURCES INSTITUTE LIMITED

(Limited by Guarantee) ABN 44 120 687 149

FINANCIAL REPORT

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

2

AUSTRALIAN HUMAN RESOURCES INSTITUTE LIMITED (Limited by Guarantee)

Index

Page

Directors’ Report 3

Auditor’s Independence Declaration 10

Statement of Comprehensive Income 11

Statement of Financial Position 12

Statement of Changes in Equity 13

Statement of Cash Flows 14

Notes to the Financial Statements 15

Directors’ Declaration 30

Audit Report 31

AUSTRALIAN HUMAN RESOURCES INSTITUTE LIMITED ABN 44 120 687 149

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DIRECTORS’ REPORT

Your directors present their report on the company for the financial period 1 January to 31 December 2019 and auditors report thereon. The financial report has been prepared in accordance with Australian Accounting Standards.

Directors

The names of the directors in office at any time during the year are:

Peter Snowden Wilson Lynette Joy Goodear (Resigned 24 January 2020) Jonathan Mark Scriven

Carmel Majella McGregor

Robert James Phipps (Resigned 24 February 2020)

Caroline McGuire

Fiona Michel

Michael Rosmarin

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

Company Secretary

Michael Iudica FCPA.

AHRI Vision, Purpose, Strategic Objectives and Key Performance Indicators

Vision: To shape the HR profession for the future

Purpose: To champion the value of people and workplace cultures that thrive in reframing work, productivity, innovation and vitality. To enable transparency, fairness and trust in organisation and transformational practices that positively impact human beings.

Strategic Framework:

Accelerate Certification: as the framework for HR standards and practice in Australia

Broaden Impact: through our strategic partnerships, brand profile, thought leadership and voice.

Customer Experience: to ensure doing business with AHRI is consistently positive and requires minimum member effort.

Digitisation: making it easy for members to ‘connect’ with our products, services and each other.

Engage Volunteers: to leverage the contribution of AHRI’s elected representatives and volunteers.

AHRI Member Value Proposition:

AHRI connects members with an expert community who understand and care about people and culture in workplaces and helps members to find products and services to support their career.


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DIRECTORS’ REPORT (CONTINUED)

Principal Activities

The principal activities of the entity during the financial year included the provision of education programs, information seminars and events, research, services and tools and member services in relation to human resources and people management. AHRI also disseminated information on the implications of workplace legislation, promoting ethical practice, professional conduct and effective leadership to human resources and people managers.

These activities are directly related to AHRI’s vision, purpose and strategic objectives.

Review of Operations Australian Human Resources Institute Limited is a public company limited by guarantee and was registered on 12 July 2006. The total comprehensive income of the entity for the year ended 31 December 2019 amounted to $120,371 (31 December 2018 $410,033).

Members’ Guarantee The entity is incorporated under the Corporations Act 2001 and is an entity limited by guarantee. If the entity is wound up, the constitution states that each member is required to contribute a maximum of $20 each towards meeting outstanding obligations of the entity. At 31 December 2019 the total number of financial members was 14,596 (2018 15,324).

Subsequent Event Except for the Corona Virus (COVID-19) and subsequent government actions, the impacts of which on the business cannot be determined at this time, there has been no other matter or circumstance, which has arisen since 31 December 2019 which has significantly affected or which may significantly affect:

• The operations, in financial years subsequent to 31 December 2019, • The results of those operations, or • State of affairs, in financial years subsequent to 31 December 2019.

Information on Directors

Peter Snowden Wilson Director

Qualifications B. Comm (Hons) MA (Hons), AMP (Wharton, UPenn), Fellow Certified Practitioner Human Resources (FCPHR), Fellow of Australian Institute of Company Directors, Fellow of CPA, Fellow of CIPD.

Experience Director, President and Chairman in CPA Australia, Director and Chairman of Australian Network on Disability Ltd., Director of BankFirst Ltd (previously Victoria Teachers Mutual Bank). Immediate World President, Director, and Secretary General of World Federation of People Management Associations (Switz.), Past President of the Asia Pacific Federation of Human Resources Management Group. Immediate past Chairman and Director of Yarra Valley Water Ltd. Immediate Past Chairman of Vision Super and now Director and Chair of its Audit and Risk Committee. Adjunct Professor in Monash Business School at Monash University, Chairman Advisory Council for the Victoria Institute of Strategic Economic Studies at Victoria University. Accredited Supervisor – PhD Program, Latrobe Business School of Latrobe University. Adjunct Professor in Management at Monash Business School at Monash University. Formerly Executive General Manager of Human Resources and Operating Risk at Amcor until 2005, Managing Director Asia Pacific Division with the ANZ Banking Group, Chairman of the Commonwealth Safety, Rehabilitation and Compensation Commission (Comcare) from 1998 to 2003, Director and Chairman of the Melbourne Tigers Basketball Club, a Board member of Dalgety Farmers Ltd, and Kimberly-Clark Australia Ltd. Adjunct Professor in Monash Business School at Monash University.

Special Responsibilities National President and Chairman. Member of the Finance Audit and Risk Management Committee (FARM), National Certification Council (NCC) Chair and National Accreditation Council (NAC) Member.


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DIRECTORS’ REPORT (CONTINUED) Information on Directors

Lynette Joy Goodear Chief Executive Officer and Managing Director (Resigned 24 January 2020)

Qualifications Lyn has a Bachelor of Business and a Master degree in Education (leadership and management). She is also a Fellow AHRI (FAHRI), a Fellow of CIPD, and a graduate member of the Australian Institute of Company Directors (GAICD).

Experience Lyn Goodear was the Chief Executive Officer of the Australian Human Resources Institute and was appointed to the role in December 2012. Lyn was formerly National Manager, Professional Development at AHRI, a position she held from 2005 to 2012. Lyn is Non-executive Director at COSBOA. Previously Lyn held leadership and management roles within the education sector at Southwest Institute of TAFE and Deakin Australia, in addition to accounting roles within the mining and engineering industries located in the United States and Australia. She has also managed her own consulting business. Lyn is an alumnus of the Mt Eliza Business School Leadership Program and the Advanced Human Resources Executive Program of the Ross Business School, Michigan, USA.

Special Responsibilities Past Member of Advisory Research Panel (ARP), Diversity & Inclusion Advisory Panel, Human Resources Technology Advisory Panel (HRTAP), and Public Sector Advisory Panel (PSAP).

Jonathan Mark Scriven Director

Qualifications MA (Hons Cantab) in Mathematics; Fellow AHRI (FAHRI); Fellow of the Institute of Chartered Accountants in Australia.

Experience Jon Scriven retired from Qantas in December 2017 having joined Qantas in April 2009 as Group Executive People. His responsibilities, which encompassed all aspects of Human Resources across the Qantas Group, were extended in 2011 to include overseeing the Office of the CEO comprising Safety, Security, Environment, Risk, Internal Audit, Legal and Company Secretariat. Prior to joining Qantas Jon was the Group HR Director for Coca-Cola Amatil taking on that role in 2002. Between 1999-2002 Jon was a Human Capital Services Partner at Andersen. From 1991 Jon held various roles within Coca-Cola Amatil including Group Remuneration & Benefits Manager and Group Learning & Development Manager. Earlier in his career Jon held Learning & Development roles at both Westpac and PriceWaterhouse.

Special Responsibilities Deputy Chair and Chair of the Finance Audit & Risk Management Committee (FARM).

Carmel Majella McGregor PSM Director

Qualifications B.Arts University of Queensland, Fellow Certified Practitioner Human Resources (FCPHR), Fellow Institute of Public Administration Australia (IPAA), Fellow of Australian Institute of Management (AIM), Member Australian Institute of Training and Development (AITD), Member of Australian Institute of Company Directors (AICD), Fellow Centre for Ethical Leadership Melbourne Business School. Public Service Medal Recipient Australia Day 2013.

Experience Adjunct Professor Institute for Governance and Policy Analysis (IGPA) University of Canberra, Deputy President IPAA ACT 2010 to November 2019, Member Northern Territory Chief Minister’s Advisory Group on Defence. Formerly Deputy Secretary People, Dept. Defence, Deputy Public Service Commissioner APS, Deputy Secretary Dept. Immigration and Citizenship, Inaugural AFR/Westpac Public Policy Woman of Influence. Member Victorian Leadership Advisory Council.


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Information on Directors


Special Responsibility Member of the Finance Audit and Risk Management Committee (FARM), member of the National Certification Council (NCC), Chair of the Public Sector Advisory Panel, Member of the Nominations Committee.

Robert James Phipps Director (Resigned 24 February 2020)

Qualifications LLB, Post Grad Dip IR/ER, Fellow Certified Practitioner of Human Resources (FCPHR), MAICD.

Experience Rob Phipps has extensive experience leading HR functions across Australia and New Zealand, UK, South Africa, Thailand and Pacific Islands. He also possesses deep operational experience, having managed scale able environments from Call Centre divisions to multinational operations teams. AHRI Councilor since 2014, NSW AHRI State President since 2017. Previous roles: Chief People Officer, South Pacific KFC; Chief People Officer, Africa KFC; Chief People Officer UK KFC.

Special Responsibilities NSW AHRI Immediate Past State President, past member of the Council of State Presidents. Past member of the National Accreditation Committee (NAC).

Fiona Michel Director

Qualifications Master of Business Administration, University of Auckland, Chartered Institute of Personnel & Development – Chartered Fellow (FCIPD), Fellow Certified Practitioner of Human Resources (FCPHR), Australian Institute of Company Directors – Graduate (GAICD).

Experience Fiona has worked in the technology, banking, insurance and public sectors for over two decades, leading and coaching businesses in New Zealand, Australia, the United Kingdom and Asia. Fiona is the Chief People & Culture Officer at New Zealand’s largest distributor of electricity and gas, has led significant health & safety and legislative workplace compliance in high risk and highly regulated private, public and listed organisations, and has won awards in New Zealand and Australia for achievement in HR, leadership, culture transformation and industrial relationships.

Special Responsibilities Member of the National Certification Council (NCC) and Advisory Research Panel (ARP).

Caroline McGuire Director

Qualifications BBus (HRM), Dip Neuroscience of Leadership, Fellow Certified Practitioner Human Resources (FCPHR).

Experience AHRI Councilor since 2013, Qld AHRI State President since 2015. Head of People, AITC. Previous roles: HR Specialist and Coach, Clariti Consulting; People and Performance Manager, BMT Group; People and Culture Manager, LogiCamms.

Special Responsibilities Qld AHRI State President; member of the Council of State Presidents. Member of the Diversity and Inclusion Advisory Panel (IDAP).


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Information on Directors Michael Rosmarin

Director

Qualifications BA (Psychology), M Comm, Fellow Certified Practitioner Human Resources (FCPHR), Graduate of Australian Institute of Company Directors (GAICD)

Experience Currently Chief Human Resources & Brand Officer of Link Group. Previously Chief Operating Officer, Group Executive, Strategy & Human Resources and Executive General Manager, Human Resources at Stockland and Principal at global executive search firm Egon Zehnder. Prior experience includes executive human resources and operational roles in Australia and Asia for leading major companies including Westpac Banking Corporation and Goldman Sachs. Former Director of Stockland’s CARE Foundation, Westpac’s Staff Superannuation Plan and Mount Sinai College.

Special Responsibilities Member of the Finance Audit and Risk Management Committee (FARM).


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DIRECTORS’ REPORT (CONTINUED) Meetings of Directors

During the year, 7 meetings of directors and 2 meeting of Finance Audit and Risk Management Committee (FARM) were held. Attendances by each director were as follows:

Directors Meetings Finance Audit and Risk Committee Meetings

No. Eligible to Attend Number Attended No. eligible to attend Number

attended

Mr. Peter Wilson 7 7 2 2 Ms. Lyn Goodear 7 7 - - Mr. Jon Scriven 7 7 2 1 Ms. Carmel McGregor 7 6 2 2 Mr. Robert James Phipps 7 7 - - Mr. Michael Rosmarin 7 7 2 2 Ms. Caroline McGuire 7 7 - - Ms. Fiona Michel 7 7 - -


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Auditor’s Independence Declaration

The lead auditor’s independence declaration for the period ended 31 December 2019 has been received and can be found on page 10 of the financial statements.

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

Director __________________________________________

Peter Snowden Wilson

Dated this 7th day of April 2020

AUSTRALIAN HUMAN RESOURCES INSTITUTE ABN 44 120 687 149

AUDITOR'S INDEPENDENCE DECLARATION TO THE MEMBERS OF AUSTRALIAN HUMAN RESOURCES INSTITUTE

- 10 -Pitcher Partners. An independent Victorian Partnership ABN 27 975 255 196. Level 13, 664 Collins Street, Docklands, VIC 3008 Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities

Adelaide Brisbane Melbourne Newcastle Sydney Perth pitcher.com.au

In relation to the independent auditor’s review for the period ended 31 December 2019, to the best of my knowledge and belief there have been no contraventions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards).

K L BYRNE PITCHER PARTNERS

Partner Melbourne

7 April 2020


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STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019

Note 31 Dec 2019

$ 31 Dec 2018

$

Revenue 2 13,176,533 13,769,885

Doubtful debts expense/write back 3,522 (750)

Computer charges (447,849) (451,390)

Changes in inventories of finished goods (1,024) 11,782

Consumables used (21,175) (40,971)

Loss on write off of fixed assets (46,936) (10,825)

Depreciation and amortisation (659,674) (224,070)

Employee benefits (5,183,705) (5,059,592)

Event and marketing expenses (3,441,881) (3,448,665)

Facilitation and assessment costs (1,067,564) (1,275,855)

Grant and research expenses (10,000 (10,000)

Insurance (115,548) (112,403)

Interest expense (52,698) -

Legal and professional fees (217,120) (88,062)

Merchants fees and bank charges (93,009) (112,294)

Projects (180,700) (274,512)

Property and relocation expenses (119,846) (768,728)

Publications, postage and printing expenses (407,041) (414,077)

Recruitment costs (54,986) (23,991)

Telephone charges (16,143) (33,672)

Travel expenses (289,893) (283,635)

Other expenses (703,170) (738,142)

Surplus before income tax 3 50,093

410,033

Income tax expense 1a - -

Surplus for the period 50,093 410,033

Other comprehensive income

Items that may be reclassified subsequently to profit and loss

Unrealised gain on investment portfolio 70,278 -

Other comprehensive income for the year 70,278 -

Total comprehensive income 120,371 410,033

The accompanying notes form part of these financial statements


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STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019

Note 31 Dec 2019 $

31 Dec 2018 $

ASSETS

CURRENT ASSETS

Cash and cash equivalents 4 3,120,965 7,333,187

Trade and other receivables 5 556,431 634,811

Inventory 6 4,161 3,137

Other current assets 7 273,832 434,024

Financial assets 8 9,781,837 5,148,127

TOTAL CURRENT ASSETS 13,737,226 13,553,286

NON CURRENT ASSETS

Other receivables 5 - 311,065

Property, plant & equipment 9 247,532

342,236

Intangible assets 10 2,475,810 2,655,007

Lease asset 15 1,125,138 --

TOTAL NON CURRENT ASSETS 3,848,480 3,308,308

TOTAL ASSETS 17,585,706 16,861,594

CURRENT LIABILITIES

Trade and other payables 11 682,952 711,284

Other liabilities 12 3,441,941 3,639,494

Provisions 13 454,661 427,171

Current lease liabilities 15 345,595 --

TOTAL CURRENT LIABILITIES 4,925,149 4,777,949

NON CURRENT LIABILITIES

Other liabilities 12 125,725 494,598

Provisions 13 18,283

23,608

Noncurrent lease liabilities 15 830,739

TOTAL NON CURRENT LIABILITIES 974,747 518,206

TOTAL LIABILITIES 5,899,896 5,296,155

NET ASSETS 11,685,810 11,565,439

MEMBERS’ FUNDS

Reserves 70,278 --

Retained surplus 11,615,532 11,565,439

TOTAL MEMBERS’ FUNDS 11,685,810 11,565,439 The accompanying notes form part of these financial statements


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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2019

Reserves Retained Surplus

Total equity

$ $ $

Total members funds at the beginning of prior financial period -

11,155,406 11,155,406

Surplus attributable to members -

410,033 410,033

Total comprehensive income for the year -

410,033 410,033

Total members funds at the end of prior financial period -

11,565,439 11,565,439

Total members funds at the beginning of the financial period -

11,565,439 11,565,439

Surplus attributable to members -

50,093

50,093

Other comprehensive income for the year 70,278

- 70,278

Total comprehensive income for the year 70,278

50,093

120,371

Total members funds at the end of the financial period 70,278

11,615,532

11,685,810



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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019

Note 31 Dec 2019

$ 31 Dec 2018 $

CASH FLOW FROM OPERATING ACTIVITIES

Receipts from customers 13,442,967 14,384,838

Payments to suppliers and employees (12,831,259) (13,727,259)

Interest expense on Lease (52,698) -

Interest received 250,280 269,116

Net cash provided by operating activities 16 809,290 926,695

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment 9a (16,156) (203,037)

Payment for intangible assets acquired 10 (51,643) (237,005)

Payment for investments (9,735,429) -

Net cash used in investing activities (9,803,228) (440,042)

CASH FLOW FROM FINANCING ACTIVITIES Lease Payment (366,411) -

Net cash used in financing activities (366,411) -

Net increase in cash held (9,360,349) 486,653

Cash and cash equivalents at beginning of financial period 12,481,314 11,994,661

Cash and cash equivalents at end of financial period 4 3,120,965 12,481,314



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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The company applies Australian Accounting Standards-Reduced Disclosure requirements as set out in AASB 1053: Application of Tiers of Australian Accounting Standards.

The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements of the Australian Accounting Standards Board and the Australian Charities and Not-for-profits Commission Act 2012. The company is a not for profit entity for financial reporting purposes under Australian Accounting Standards.

The financial report covers the entity of Australian Human Resources Institute Limited as an individual entity. Australian Human Resources Institute Limited is a company limited by guarantee, incorporated and domiciled in Australia.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated.

The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

The financial report has been authorised for issue on 23 April 2020 by the board of directors.

Accounting Policies

a. Income Tax On 29 June 2009 AHRI was granted income tax exempt status effective 29 February 2008.

b. Inventories

Inventories are measured at the lower of cost and net realisable value.

c. Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation.

Plant and equipment Plant and equipment are measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually 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.

Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the

entity commencing from the time the asset is held ready for use.

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

Class of Fixed Asset Depreciation Rate

Plant and equipment 33.33%


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NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued) d. Leases

Accounting policy applied to the information presented for the current period under AASB 16 Leases (refer Note 1 o. New and revised accounting standards effective at 31 December 2019): At the commencement date of a lease (other than leases of 12-months or less and leases of low value assets), the group recognises a lease asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments.

Lease assets Lease assets are initially recognised at cost, comprising the amount of the initial measurement of the lease liability, any lease payments made at or before the commencement date of the lease, less any lease incentives received, any initial direct costs incurred, and an estimate of costs to be incurred in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories.

Subsequent to initial recognition, lease assets are measured at cost (adjusted for any remeasurement of the associated lease liability), less accumulated depreciation and any accumulated impairment loss.

Lease assets are depreciated over the shorter of the lease term and the estimated useful life of the underlying asset, consistent with the estimated consumption of the economic benefits embodied in the underlying asset.

Lease liabilities Lease liabilities are initially recognised at the present value of the future lease payments (i.e., the lease payments that are unpaid at the commencement date of the lease). These lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined, or otherwise using the group’s incremental borrowing rate.

Subsequent to initial recognition, lease liabilities are measured at the present value of the remaining lease payments (i.e., the lease payments that are unpaid at the reporting date). Interest expense on lease liabilities is recognised in profit or loss (presented as a component of finance costs). Lease liabilities are remeasured to reflect changes to lease terms, changes to lease payments and any lease modifications not accounted for as separate leases.

Variable lease payments not included in the measurement of lease liabilities are recognised as an expense when incurred.

Leases of 12-months or less and leases of low value assets Lease payments made in relation to leases of 12-months or less and leases of low value assets (for which a lease asset and a lease liability has not been recognised) are recognised as an expense on a straight-line basis over the lease term.

Accounting policy applied to the information presented for the prior period under AASB 117 Leases: Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership. Operating leases Lease payments for operating leases are recognised as an expense on a straight-line basis over the term of the lease. Lease incentives received under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.


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NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued) e. Financial Instruments Recognition

Classification of Financial Assets Financial assets recognised by the entity are subsequently measured in their entirety at either amortised cost or fair value, subject to their classification and whether the entity irrevocably designates the financial asset on initial recognition at fair value through other comprehensive income (FVtOCI) in accordance with the relevant criteria in AASB 9.

Financial assets not irrevocably designated on initial recognition at FVtOCI are classified as subsequently measured at amortised cost, FVtOCI or fair value through profit or loss (FVtPL) on the basis of both: (a) the entity’s business model for managing the financial assets; and (b) the contractual cash flow characteristics of the financial asset. Impairment

At each reporting date, the entity assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in the income statement.

f. Impairment of Assets At each reporting date, the entity reviews the carrying values 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 value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Where it is not possible to estimate the recoverable amount of an individual asset, the entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

g. Intangibles Goodwill

Goodwill is initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Development costs Development costs relating to new services and tools for members are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably. Development costs are amortised over 5 years. Expenditure during the research phase of a project is recognised as an expense when incurred.

h. Employee Benefits Provision is made for the company’s liability for employee benefits arising from services rendered by employees

to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based on historical data. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period and is recorded under Provisions.


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NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued) i. Provisions Provisions are recognised when the company has a legal or constructive obligation, as a result of past events,

for which it is probable that an outflow of economic benefits will result, and that outflow can be reliably measured.

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

investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

k. Revenue Revenue from the rendering of a service is recognised upon the delivery of the service to members. Interest

revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. All revenue is stated net of the amount of goods and services tax (GST). If conditions are attached to revenue received which must be satisfied before it is eligible to receive the contribution, the recognition of the revenue will be deferred until those conditions are satisfied.

l. 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 balance sheet are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

m. Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in

presentation for the current financial period.

n. Critical Accounting Estimates and Judgments (i) Impairment

The entity assesses impairment at each reporting date by evaluating conditions specific to the company that may lead to impairment of assets. Value-in-use calculations have been performed in assessing the recoverable amount of goodwill. Goodwill is an indefinite life intangible asset initially recorded as the excess between consideration paid and the fair value of the assets and liabilities acquired in a business combination. Goodwill is tested annually for impairment. Management tests the goodwill annually for impairment. The recoverable amount of goodwill is calculated using a value in use calculation based on the present value of cash flow projections with the following key inputs: Growth factor: 3.0% Pre-tax discount rate: 9% Period of forecast: 5 years

o. New Accounting Standards Issued

The Company has applied all new and revised standards issued by the Australian Accounting Standards Board ("AASB") that apply to annual reporting periods beginning on or after 1 January 2019, including AASB 16 Leases (AASB 16). AASB 16: Leases AASB 16 replaces AASB 117 Leases and introduces a single lessee accounting model that requires a lessee to recognise right-of-use assets and lease liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Right-of-use assets are initially measured at cost and lease liabilities are initially


19

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019

NOTE 1 : STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

measured on a present value basis. Subsequent to initial recognition: (a) right-of-use assets are accounted for on a similar basis to non-financial assets, whereby the right-of-use

asset is accounted for on a cost basis unless the underlying asset is accounted for on a revaluation basis, in which case if the underlying asset is: i. investment property, the lessee applies the fair value model in AASB 140 Investment Property to the

right-of-use asset; or ii. property, plant or equipment, the lessee applies the revaluation model in AASB 116 Property, Plant

and Equipment to all of the right-of-use assets that relate to that class of property, plant and equipment; and

(b) lease liabilities are accounted for on a similar basis to other financial liabilities, whereby interest expense is recognised in respect of the lease liability and the carrying amount of the lease liability is reduced to reflect the principal portion of lease payments made.

AASB 16 substantially carries forward the lessor accounting requirements of the predecessor standard, AASB 117. Accordingly, under AASB 16 a lessor continues to classify its leases as operating leases or finance leases subject to whether the lease transfers to the lessee substantially all of the risks and rewards incidental to ownership of the underlying asset, and accounts for each type of lease in a manner consistent with the current approach under AASB 117. In accordance with the transition requirements of AASB 16, the Company has elected to apply AASB 16 retrospectively to those contracts that were previously identified as leases under the predecessor standard, with the cumulative effect, if any, of initially applying the new standard recognised as an adjustment to opening retained earnings at the date of initial application (i.e., at 1 January 2019). Accordingly, comparative information has not been restated. The Company has also elected to apply the following practical expedients to the measurement of right-of-use assets and lease liabilities in relation to those leases previously classified as operating leases under the predecessor standard: - to recognise each right-of-use asset at the date of initial application at an amount equal to the lease

liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statement of financial position immediately before the date of initial application;

- to not recognise a right-of-use asset and a lease liability for leases for which the underlying asset is of low value;

- to not recognise a right-of-use asset and a lease liability for leases for which the lease term ends within 12 months of the date of initial application;

- to apply a single discount rate to a portfolio of leases with reasonably similar characteristics; - to adjust each right-of-use asset at the date of initial application by the amount of any provision for onerous

leases recognised in the statement of financial position immediately before the date of initial application; - to exclude initial direct costs from the measurement of each right-of-use asset at the date of initial

application; and - to use hindsight, such as in determining the lease term if the contract contains options to extend or

terminate the lease. The application of AASB 16 resulted in the recognition of right-of-use assets with an aggregate carrying amount of $1,125,138 (referred to in these financial statements as “lease assets”) and corresponding lease liabilities with an aggregate carrying amount of $1,176,334 as at 31 December 2019. The incremental borrowing rate applied in the calculation of the initial carrying amount of lease liabilities was 4%. The following is a reconciliation of non-cancellable operating lease commitments disclosed at the end of the prior reporting period (i.e., at 31 December 2018) to the aggregate carrying amount of lease liabilities recognised at the date of the initial application (i.e., at 1 January 2019):

$ Aggregate non-cancellable operating lease commitments at 31 December 2018 2,652,157 Less: lease payments previously included in non-cancellable lease commitments for leases with remaining terms of less than 12 months and leases of low value assets (142,647) Less: impact of discounting lease payments to their present value at 1 January 2019 (126,307) Less: Variable costs not included in lease agreement previously accounted for (893,156) Carrying amount of lease liabilities recognised at 1 January 2019 1,490,047 Further details of the Company's accounting policy in relation to accounting for leases under AASB 16 are at Note 15.


20


NOTE 2: REVENUE

31 Dec 2019

$ 31 Dec 2018

$ Services revenue

- Sale of goods 20,258 30,717

- Interest income 271,741 269,116

- Membership income 4,649,000 4,489,146

- Professional development income 3,193,662 3,839,272

- Events income 2,547,516 2,764,459

- Sponsorship revenue 2,194,394 2,061,501

- Other revenue 299,962 315,674

Total Revenue 13,176,533 13,769,885

NOTE 3: SURPLUS/LOSS FOR THE PERIOD

Expenses

Foreign currency translation loss/(gain) (514) (7,816)

Depreciation 110,474 111,049

Amortisation 549,200 113,021

Employee benefits 5,183,705 5,059,592

NOTE 4: CASH AND CASH EQUIVALENTS

Cash at bank and on hand 1,139,965 952,186

Term deposits - current 1,981,000 6,381,001

3,120,965 7,333,187


21


NOTE 5: TRADE AND OTHER RECEIVABLES

31 Dec 2019

$ 31 Dec 2018

$ CURRENT

Trade receivables 403,970 357,369

Provision for impairment of receivables - (3,522)

403,970 353,847

Other receivables 152,461 280,964

556,431 634,811

NON-CURRENT

Other receivables - 311,065

556,431 945,876

a. Trade Receivables That Are Past but Not Impaired

An asset is considered past due when any payment due under the contractual terms is received one day past the contractual due date. As at 31 December 2019, trade receivables of $130,282 were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:

Past due but not impaired

Gross Amount

Past due and

impaired

<30 31-60 61-90 >90 Within initial

trade terms

$ $ $ $ $ $ $

As at 31 Dec 2019

Trade and term receivables 403,970 - 273,688 117,448 9,070 3,765 273,688

Other receivables 152,461 - 152,461 - - - 152,461

556,431 - 426,149 117,448 9,070 3,765 426,149

As at 31 Dec 2018

Trade and term receivables 357,369 3,522 205,320 138,308 3,970 6,249 205,320

Other receivables 592,029 - 592,029 - - - 592,029

949,398 3,522 797,349 138,308 3,970 6,249 797,349


22

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 NOTE 5: TRADE AND OTHER RECEIVABLES (Continued) b. Provision for Impairment of Trade Receivables

Trade receivables are non-interest-bearing loans and generally on 30-day terms. A provision for impairment is recognised when there is evidence that an individual trade receivable is impaired.

31 Dec 2019 $

31 Dec 2018 $

Balance at beginning of period 3,522

2,772

Charge for period - 750

Amounts reversed 3,522 -

Balance at end of period - 3,522

NOTE 6: INVENTORIES

CURRENT

Finished goods (at cost)

4,161 3,137

4,161 3,137

NOTE 7: OTHER ASSETS

CURRENT

Prepayments 253,832 294,024

Software Licenses 20,000 140,000

Total Other Assets 273,832 434,024

NOTE 8: FINANCIAL ASSETS

CURRENT

Financial assets at fair value through other comprehensive income

Financial assets 9,781,837 5,148,127

Total Current financial assets 9,781,837 5,148,127


23


NOTE 9: PROPERTY, PLANT, AND EQUIPMENT 31 Dec 2019

$

31 Dec 2018 $

LEASEHOLD IMPROVEMENTS

Leasehold Improvement at cost - -

Transfer from Plant and Equipment 330,620 -

Less accumulated depreciation (135,045) -

Total Leasehold improvements 195,575 -

PLANT AND EQUIPMENT

Plant and equipment at cost 161,998 521,610

Less accumulated depreciation (110,041) (179,374)

Total plant and equipment 51,957 342,236

Total property, plant and equipment 247,532 342,236

a. Movement in Carrying Amounts

LEASEHOLD IMPROVEMENTS

Balance at beginning of financial period - -

Reclassified from Plant and Equipment 263,980 -

Depreciation expense (68,405) -

Balance at end of financial period 195,575 -

PLANT AND EQUIPMENT

Balance at beginning of financial period 342,236 261,073

Additions 16,156 203,037

Reclassified to Leasehold improvements (263,980) -

Loss on asset written off (386) (10,825)

Depreciation expense (42,068) (111,049)

Balance at end of financial period 51,957 342,236

NOTE 10: INTANGIBLE ASSETS

GOODWILL

Cost 2,118,092 2,118,092

Net carrying value 2,118,092 2,118,092

RECONCILIATION OF GOODWILL

Balance at the beginning of period 2,118,092 2,118,092

Closing carrying value at end of period 2,118,092 2,118,092


24


NOTE 10: INTANGIBLE ASSETS (Continued) 31 Dec 2019

$

31 Dec 2018 $

DEVELOPMENT COSTS

Cost 1,132,902 1,467,276

Accumulated Amortisation (775,184) (930,361)

Net carrying value 357,718 536,915

Total Intangibles 2,475,810 2,655,007

RECONCILIATION OF DEVELOPMENT COSTS

Balance at the beginning of period 536,916 412,932

Additions 51,643 237,005

Amortisation charge (184,291) (113,021)

Loss on write off of Intellectual Property (46,550) -

Closing carrying value at end of period 357,718 536,916 Development Costs Development costs are finite life intangible assets and relate to the development of new services and tools for members where such development will deliver future economic benefits to members and such benefits can be measured reliably.

Development costs are recognised at cost less accumulated amortisation and impairment losses. If indicators of impairment exist for finite life intangibles, the recoverable amount of the asset will be calculated and compared to the carrying value. No indicators of impairment exist at the financial reporting date.

NOTE 11: TRADE AND OTHER PAYABLES CURRENT

Trade payables 128,099 121,977

Sundry payables and accrued expenses 554,853 589,307

682,952 711,284

NOTE 12: OTHER LIABILITIES

CURRENT

Lease Incentives - 100,886

Deferred income 3,441,941 3,538,608

3,441,941 3,639,494

NON-CURRENT

Deferred Income 125,725 134,725

Lease Incentives - 359,873

125,725 494,598


25


NOTE 13: PROVISIONS 31 Dec 2019 $

31 Dec 2018 $

CURRENT

Employee benefits 454,661 427,171

454,661 427,171

NON-CURRENT

Employee benefits 18,283 23,608

TOTAL PROVISIONS 472,944 450,779

RECONCILIATION OF PROVISIONS

Opening Balance 450,779 454,355

Additional provisions raised during the period 22,165 (3,576)

Balance at end of period 472,944 450,779

NOTE 14: MEMBERS’ GUARANTEE

The entity is incorporated under the Corporations Act 2001 and is an entity limited by guarantee. If the entity is wound up, the constitution states that each member is required to contribute a maximum of $20 each towards meeting outstanding obligations of the entity. At 31 December 2019 the total number of financial members was 14,596 (2018 15,324). NOTE 15: LEASE ASSETS AND LEASE LIABILITIES

31 Dec 2019

$

(a) Lease assets

Right of use asset 1,490,047

Accumulated depreciation (364,909)

Total carrying amount of lease assets 1,125,138

Reconciliations Reconciliation of the carrying amount of lease assets at the beginning and end of the financial year:

Buildings under lease

Opening carrying amount -

Additions 1,490,047

Depreciation (364,909)

Closing carrying amount 1,125,138

(b) Lease liabilities

CURRENT

Operating lease liability 345,595


26


NOTE 15: LEASE ASSETS AND LEASE LIABILITIES (Continued) NON CURRENT

31 Dec 2019

$

Operating lease liability 830,739

Total carrying amount of lease liabilities 1,176,334

(c) Lease expenses and cashflows

Interest expense on lease liabilities 52,698 Expense relating to lease payments made for leases of low value assets (for which a lease asset and a lease liability has not been recognised) 77,967

Total cash outflow in relation to leases 130,665

Depreciation expense on lease assets 364,909

(d) Non-cancellable operating lease arrangements (31 December 2018) The following information relates to non-cancellable operating lease arrangements of the prior reporting period only, and is presented in accordance with the predecessor accounting standard AASB 117 Leases.

2018

$

- Not later than 1 year 645,920

- Later than 1 year and not later than 5 years 2,006,236

- Later than 5 years -

Aggregate lease payments contracted for at reporting date 2,652,157

NOTE 16: CASH FLOW INFORMATION

Reconciliation of Cash Flow from Operations with Surplus after Income Tax

31 Dec 2019 $

31 Dec 2018 $

Surplus from ordinary activities after income tax 50,093 410,033 Reconciliation of Cash Flow from Operations with Surplus after income tax

Non-cash flows in total comprehensive income: Depreciation and Amortisation 659,674 224,070 Doubtful debts (gain)/expense (3,522) 750 Interest on lease 52,698 - Interest revenue accrued (21,461) - Loss on write off of fixed assets 46,936 10,825 Change in assets and liabilities, excluding assets and liabilities purchased

(Increase) decrease in trade & other receivables (22,505) 33,110 (Increase) decrease in inventories (1,024) 11,782 (Increase) decrease in other assets 160,192 (18,038) Increase (decrease) in trade & other payables (133,956) 257,739 Increase (decrease) in provisions 22,165 (3,576) Net cash provided by operating activities 809,290 926,695


27


NOTE 17: DIRECTORS AND KEY MANAGEMENT PERSONNEL COMPENSATION AND RELATED PARTY TRANSACTIONS

A. Remuneration of directors and key management personnel

31-Dec-18

# Roles $

Director and committee fees 7 389,822

Key Management personnel salaries 7 1,226,976

Total 14 1,616,798

The amount reported on 2018 of $1,616,798 consists of base and committee fee compensation paid to 7 Directors and 7 Key management personnel including the Chief Executive Officer/Managing Director.

31-Dec-19

# Roles $

Director and committee fees 7 396,107

Key Management personnel salaries 7 1,246,100

Total 14 1,642,207

The amount reported on 2019 of $1,642,207 consists of base and committee fee compensation paid to 7 Directors and 7 Key management personnel including the Chief Executive Officer/Managing Director.

Directors Fees

The AHRI constitution supports a Director Chair and National President, and 8 Directors including a Managing Director.

The constitution also supports a Finance Audit and Risk Management Committee consisting of 3 Directors, an Independent Director Chair and 2 other Directors, with the Chair selected from one of the Directors.

Fee Structure includes base plus super $ Chair Fee 194,705

Director Fee 30,200

FARM Chair Fee 7,500

FARM Committee Member Fee 4,250


28

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 NOTE 17: KEY MANAGEMENT PERSONNEL COMPENSATION AND RELATED PARTY TRANSACTIONS (Continued)

Financial Year End 2019 Disclosure of Directors

Name Role

Board Fee Committee

Fee Total

$ $ $

Peter Snowden Wilson Chair / National President / FARM Member 194,705 4,250 198,955

Jonathan Mark Scriven Director / FARM Chair 30,185 7,500 37,685

Carmel Majella McGregor Director / FARM Member 30,200 4,250 34,450

Robert James Phipps Director 30,184 - 30,184

Fiona Michel Director 30,200 - 30,200

Caroline McGuire Director 30,200 - 30,200

Michael Rosmarin Director / FARM Member 30,184 4,250 34,434

Total 375,857 20,250 396,107

Key Management Personnel 2019

Base Salary

(incl. Super)

$

Bonus $

Total $

Chief Executive Officer and Managing Director 242,794 30,501 273,295

Other Key Management Personnel (6)

893,983 78,822

972,805

Total 1,136,777 109,323 1,246,100

A total of 15-20% of key personnel managers’ notional base annual salary was paid as an annual bonus, based on the achievement of performance targets and KPI's set for the previous year (2018). B. Related Party Transactions Directors are reimbursed for travel and accommodation expenses incurred for performing their duties as a director. The MD & CEO was appointed by the Board as executive director and was remunerated as employee of AHRI.

Any transactions which are incurred by Directors which relate to other organisations travel are claimed back from such organisation as a reimbursement and are not deemed to be related party transactions.

Transactions with directors and their related parties have been under the AHRI’s normal terms and conditions of trading.

Mr Robert James Phipps is the owner of Evolve Fast. AHRI paid Evolve Fast $ 8,250 including GST for consultancy fee and reimbursed $2,200 for travel to attend CIPD conference 2019 (2018, $13,200).

Mr Kim Schofield is the director of Kapability Solutions Pty Ltd. During the period of January to March 2019, AHRI engaged Kapability Solutions as independent contractor and it invoiced AHRI $49,480 including GST for facilitation and consultancy services. Commencing 1st of April 2019, AHRI employed Kim Schofield as General Manager of HR Standards and Practice. Kapability Solutions invoiced AHRI $118,041 including GST from April to December 2020 for facilitation and consultancy services (2018, $438,687). These arrangements formed part of Mr. K Schofield transition from a consultant to an employee.


29


NOTE 18: EVENTS SUBSEQUENT TO REPORTING DATE Except for the Corona Virus (COVID-19) and subsequent government actions, the impacts of which on the business cannot be determined at this time, there has been no other matter or circumstance, which has arisen since 31 December 2019 which has significantly affected or which may significantly affect:

• The operations, in financial years subsequent to 31 December 2019, • The results of those operations, or • State of affairs, in financial years subsequent to 31 December 2019.

NOTE 19: COMPANY DETAILS

The registered office of the company is:

Australian Human Resources Institute Limited Level 4 575 Bourke Street MELBOURNE VIC 3000

The principal place of business is:

Australian Human Resources Institute Limited Level 4 575 Bourke Street MELBOURNE VIC 3000


30

DIRECTORS’ DECLARATION

The directors of the company declare that:

1. The financial statements and notes, as set out in 12 to 29, are in accordance with the Australian Charitiesand Not-for-profits Commission Act 2012 and:

a. comply with Accounting Standards - Reduced Disclosure Requirements and the Australian Charitiesand Not-for-profits Commission Regulation 2013; and

b. give a true and fair view of the financial position as at 31 December 2019 and of the performance for theyear ended on that date of the company.

2. In the directors’ opinion there are reasonable grounds to believe that the Company will be able to pay itsdebts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Director ___________________________________________

Peter Snowden Wilson

Dated this 7th day of April 2020


INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUSTRALIAN HUMAN RESOURCES INSTITUTE

- 31 -Pitcher Partners. An independent Victorian Partnership ABN 27 975 255 196. Level 13, 664 Collins Street, Docklands, VIC 3008 Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities


Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Australian Human Resources Institute, "the registered entity", which comprises the statement of financial position as at 31 December 2019, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion, the accompanying financial report of Australian Human Resources Institute, is in accordance with Division 60 of the Australian Charities and Not-for-profits Commission Act 2012, including:

(a) giving a true and fair view of the registered entity’s financial position as at 31 December 2019 and of itsfinancial performance for the year then ended; and

(b) complying with Australian Accounting Standards - Reduced Disclosure Requirements and Division 60 ofthe Australian Charities and Not-for-profits Commission Regulation 2013.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the registered entity in accordance with the Australian Charities and Not-for-profits Commission Act 2012 "ACNC Act" and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants "the Code" that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

The directors are responsible for the other information. The other information comprises the information included in the registered entity’s annual report for the year ended 31 December 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 assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and,


INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF AUSTRALIAN HUMAN RESOURCES INSTITUTE

Other Information (Continued)

- 32 -

Pitcher Partners. An independent Victorian Partnership ABN 27 975 255 196. Level 13, 664 Collins Street, Docklands, VIC 3008 Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities

Adelaide Brisbane Melbourne Newcastle Sydney Perth

pitcher.com.au

in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Report

Management is responsible for the preparation and fair presentation of the financial report in accordance with the financial reporting requirements of the ACNC Act and for such internal control as management determines is necessary to enable the preparation and fair presentation of a financial report that is free from material misstatement, whether due to fraud or error.

In preparing the financial report, management is responsible for assessing the registered entity’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 management either intends to liquidate the registered entity or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the registered entity’s financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional 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 perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our 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.


INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUSTRALIAN HUMAN RESOURCES INSTITUTE

- 33 -

Pitcher Partners. An independent Victorian Partnership ABN 27 975 255 196. Level 13, 664 Collins Street, Docklands, VIC 3008 Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities


Auditor's Responsibilities for the Audit of the Financial Report (Continued)

• Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the registered entity’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related toevents or conditions that may cast significant doubt on the registered entity’s ability to continueas 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 suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor’s report. However, future events or conditionsmay cause the registered entity to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial report, including thedisclosures, and whether the financial report represents the underlying transactions and eventsin a manner that achieves fair presentation.

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

K L BYRNE PITCHER PARTNERS

Partner Melbourne

7 April 2020

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