Home' Annual Report : Annual Report 2015 Contents ENSURING
The 2015 financials reflected a strong operating
performance across the organisation delivering an operating
surplus before tax of $7.7m (2014: $3.8m) and an overall
comprehensive income of $7m (after tax, defined benefit,
FX and unrealised loss on investment s) (2014: $4.7m).
Overall revenue increased by $13.3m or 8.2 per cent
during 2015. Continued grow th in membership, an increase
in CPA Program sales and higher qualification assessments
revenue were the key drivers behind this result. Revenue
from training and development products was consistent
with 2014 levels.
The organisation ended the year with more than 155,000
members. This strong result was driven by new member
growth and member retention levels consistent with
2014. The increase in member numbers resulted in higher
membership revenue of $4.8m or 6.4 per cent. Income
from investment s also exceeded 2014 results.
Expenditure before tax was $9.3m or 5.8 per cent higher
than 2014. The increases were driven by our investment
in CPA Australia Advice and further investment in our
underlying technology platforms including a new learning
management system (LMS) for members. The depreciation
of the Australian dollar also resulted in higher operational
cost s in overseas locations.
Costs in the brand, ethics and the profession area were
higher than 2014 due to our increased presence in key
growth markets outside Australia. Direct costs associated
with education were also higher, which was a direc t result
of higher sales in this area.
DISCUSSION AND ANALYSIS OF
THE FINANCIAL RESULTS 2015
For income tax purposes CPA Australia has elected
to form a tax group with CPA Australia Advice
allowing the group to prepare its income tax return
on a consolidated basis. This allows the CPA Australia
group to continue to apply the principles of mutuality
as outlined below.
In assessing its income tax liability, CPA Australia applies
the principles of mutuality to revenues and expenses.
Revenue in the form of member receipts represents
mutual income and is not subject to income tax.
Expenses associated with such mutual activities
are not tax deductible for income tax purposes.
All other receipts and payments to, or made by,
CPA Australia are classified for income tax purposes
in accordance with income tax legislation.
CPA Australia’s tax expense for 2015 is $0.2m.
This is attributable to a taxable gain for 2015 largely
due to higher non-mutual income received from the
organisation’s investment portfolio in the form of franking
credits and higher migration skills assessment revenue.
It is expected that CPA Australia will continue to operate
on a tax mutual basis.
19% Membership and member value
10% Training and development
15% Brand, ethics and the profession
10% Business development
29% Member support and corporate services
3% Corporate governance and committees
TOTAL EXPENDITURE EXCLUDING TAX
Subscription fees, where a foreign currency option is
available, are reviewed and adjusted if required on a weekly
basis to reflect exchange rate movements. Foreign currency
cash holdings are also limited to the requirements for the
funding of local operations to minimise CPA Australia’s
exposure to fluctuations in exchange rates. The depreciation
of the Australian dollar against the currencies where
substantial cash is held contributed to a foreign exchange
gain of $0.3m for the full year.
CPA Australia’s cash flow and liquidity remained strong
in 2015. Overall cash and cash equivalents increased by
$14.2m, net cash flows from operating activities for the year
were $20.4m. The net increase in cash and cash equivalents
was due to an increase in our investment portfolio and a
reduction in capital purchases during 2015. In real terms,
CPA Australia has $65.5m in excess cash and investments
after income received in advance is deducted.
CPA Australia’s investment portfolio continues to perform
well returning $4.6m in revenue in 2015. However, due to
the performance of the Australian equity market in 2015
the portfolio returned an unrealised loss of $0.9m.
CPA AUSTRALIA 2015 INTEGRATED REPORT
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