FINANCIALS 2019
KU
20
19
Subsequent Events
On 30 January 2020, the World Health Organization
Director-General declared the outbreak of novel
coronavirus (2019-nCoV) a Public Health Emergency of
International Concern. On the 11 March 2020, the World
Health Organization declared COVID-19 to be a Pandemic.
The outbreak of COVID-19 and the subsequent quarantine
measures imposed by the Australian Government have
caused unprecedented disruption to businesses and
economic activity. The entity considers this to be a nonadjusting
post balance sheet event and accordingly the
financial effects of COVID-19 have not been reflected in
the entity’s financial statements at 31 December 2019.
This situation has had a negative impact on the
operations of the entity and is likely to continue to do so
as quarantine measures continue. While the entity has
not closed any of its Centres, it is experiencing a significant
decline in attendance.
The outbreak of COVID-19 is also expected to negatively
affect some parent’s ability or willingness to pay childcare
fees which may in turn result in parents withdrawing their
children from care.
The NSW Government have committed to continuing
to pay the Start Strong funding (a Government program
for early childhood education) during this crisis and
throughout 2021 based on the August 2019 census
enrolment levels. The Federal Government has also
provided a ‘JobKeeper’ support package which will help to
support employment cost for 6 months in the event that
revenues of the entity decline by 30% or more. Further
government funding packages may be released.
While childcare services are currently considered essential
services, the situation remains fluid at the date of signing the
financial statements and closures of Centres may be required
should government policy change. Management and
Directors have undertaken scenario cash flow forecasting
and believe that, in the event of Centre closures, the entity
has sufficient cash reserves and access to government
funding to be able to continue to pay its debts as and when
they fall due for at least 12 months from the date of signing
the financial report and as such have prepared the financial
statements on a going concern basis.
As the situation remains fluid (due to continuing changes
in government policy and evolving business and customer
reactions thereto) as at the date these financial statements
are authorised for issue, the Directors of the Company
considered that the financial effects of COVID-19 on
the entity’s financial statements cannot be reasonably
estimated. Nevertheless, the economic effects arising from
the COVID-19 outbreak are expected to materially affect the
results of the entity for the full year of 2020.
No other matter or circumstance has occurred subsequent
to year end that has significantly affected, or may
significantly affect, the operations of the Company, the
results of those operations or the state of affairs of the
entity in subsequent financial years.
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