WHERE THE
MONEY WENT
FINANCIAL REPORT 2015
Acknowledgements: Financial Report design by L+L Design | www.l-ldesign.com.au
Directors’ Report 2 Auditor independence declaration 9 Statement of profit or loss and other comprehensive income 10 Statement of financial position 11 Statement of changes in funds 12 Statement of cash flows 13 Notes to the financial statements 14 1. Corporate information 14 2. Summary of significant accounting policies 14 3. Significant accounting judgements, estimates and assumptions 17 4. Revenue and expenses 18 5. Cash and cash equivalents 19 6. Other receivables 19 7. Other current assets 19 8. Assets classified as held for sale 20 9. Investments 20 10. Property, plant and equipment 20 11. Trade and other payables 22 12. Employee benefit liabilities 22 13. Commitments and contingencies 23 14. Related party disclosures 23 15. Key management personnel 24 16. Events after the reporting date 24 17. Economic dependency 24 18. Information and declaration to be furnished under the Charitable Fundraising Act 1991 24
Directors’ declaration 27 Independent auditor’s report 28
Contents | 1
Directors’ Report
Names, qualifications, experience and special responsibilities
For the year ended 30 June 2015 Your directors submit their report for the year ended 30 June 2015.
Directors The names and details of the Company’s directors in office during the financial year and until the date of this report are set out below. Directors were in office for this entire period unless otherwise stated.
• Richard John Gibbs • Anna Maree Ainsworth • Craig Stuart Davis • Rebecca Monica Grace Lynch • Richard John (Rick) Millen • Deborah Thomas (Resigned: 30 October 2014)
• Christopher Keith Riley, AM • Nicholas James Spooner (Appointed: 1 May 2015)
Richard John Gibbs GAICD
Anna Marie Ainsworth GAICD
Chairperson
Director
A Director since 2006, Richard was appointed Chairperson in February 2011. He holds a Bachelor of Economics (Hons) and a Master of International Economics and Finance specialising in macroeconomic policy, finance and public policy administration. He holds a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia, a Master of Business Administration and a Graduate Diploma in Executive Performance Management.
Anna has been a Director since 2002. She served as Chairperson of the Board from 2008 to February 2011. Anna is the Community Development Manager of Eden Gardens and Garden Centre, North Ryde and a Director of the Eden Foundation.
Richard is a member of the Australian Business Economists and the National Association of Business Economics (NABE) in the United States. He is a member of the Advisory Board for the Australian National University, School of Arab and Islamic Studies, a Trustee for the Committee for the Economic Development of Australia (CEDA), a Member of the AustraliaOman Business Council, a Fellow of the Financial Services Institute of Australasia (FINSIA) and Graduate Member of the Australian Institute of Company Directors. Committee Membership:
• Development Committee – Chair from October 2007
• Audit, Finance and Risk Committee • Nomination Committee 2 | Youth Off The Streets Financial Report 2015
Anna’s earlier career was in Public Health Practice where she worked as a Paediatric physiotherapist. Anna is a member of the Development Advisory Committee of the Botanic Gardens and Domain Trust and a member of Philanthropy Australia through the Eden Foundation. Anna holds a postgraduate Diploma in Physiotherapy from Cumberland College of Health Services and a Bachelor of Science from the University of New South Wales. Anna is a graduate Member of the Australian Institute of Company Directors and a graduate of the Benevolent Society Sydney Leadership Program. Committee Membership:
• Services Committee – Chair
Craig Stuart Davis
Rebecca Monica Grace Lynch
Director
Director
Craig Davis has been a Director since 1998. He was elected Deputy Chairman in 2000 and served as Chair of the Board from 2002 to September 2008. He was also elected a Youth Off The Streets Ambassador in August 2009.
Rebecca has been a Director since 2005.
After a successful career playing Australian Football League (AFL) for Carlton, Kangaroos, Collingwood and Sydney Swans, Craig now works in sport at the University of New South Wales. Craig was honoured with the Australian Sports Medal and Life Membership for AFL New South Wales (NSW)/Australian Capital Territory (ACT) in 2000 and brings with him vast experience in Board membership. Craig was the Chief Executive Officer of the NSW Australian Football League (1990 – 1998), the Chairman of Selectors Sydney Swans (1986 – 1987) and Deputy Chairman of the NSW Sports Federation (1996 – 2003) as well as Chairman of the Non-Olympic Sports Task Force (1996 – 2000).
Rebecca is a special counsel at Thomson Geer Lawyers. She holds a Bachelor of Laws from the University of Sydney and brings with her a great deal of experience in the legal profession. Rebecca has practised in the area of commercial litigation for over 30 years. She was a partner at DLA Phillips Fox until she retired from the partnership in May 2007. Rebecca was admitted as a solicitor of the Supreme Court of New South Wales (1979), Northern Territory (1992) and South Australia (1994). Rebecca also received accreditation as a mediator by LEADR (1994). Rebecca is a member of the Law Society of NSW. Committee Membership:
• Services Committee • Nomination Committee – Chair
Richard John (Rick) Millen Director Rick has been a Director since 2007. Rick was a partner of PricewaterhouseCoopers (PwC) (retired June 2011). During his time Rick led the Advisory Practice and sat on PwC’s leadership team. For 5 years, from 2006-2011, Rick led PwC’s corporate responsibility agenda in Australia including running the PwC Foundation. From 2008 to 2010, Rick also coordinated PwC’s corporate responsibility agenda globally in some 140 territories. Rick is a director of Australia for UNHCR and a director of Cabcharge Limited. Rick holds a BA in Law from Oxford University and is a member of the Institute of Chartered Accountants in Australia. Committee Membership:
• Development Committee • Audit, Finance and Risk Committee – Chair
Craig holds a Surveying Certificate from the Royal Melbourne Institute of Technology. Youth Off The Streets Craig Davis College at Cordeaux Heights Centre for Youth was named for him in 2013.
Directors’ Report | 3
Nick’s interest in digital extends beyond his professional life and he is passionate about the opportunities that digital offers to enable transformation beyond the business realm.
Nicholas James Spooner Director (Appointed: May 2015) Nick joined the Youth Off The Streets board as a Director in 2015 having supported the Development Committee since 2009. Nick is the National Leader for PwC’s Digital Services practice having joined in 2013. Nick has also held a number of executive roles with some of Australia’s leading businesses and has a wealth of commercial experience in leading and running digital enterprises. With close to 20 years within the digital industry, Nick’s experience spans across a range of disciplines including commercial sales, marketing, product, operations, technology and program delivery across consulting, telecommunications, government, media and marketing services. Prior to his current role, Nick championed and executed a significant business and structural transformation, successfully integrating eight separate businesses to form what is now Salmat Digital. He also played an integral role in the digital success of Ninemsn as its Chief Operating Officer and Network TEN as its Chief Digital Officer. In addition to this Nick has held senior roles with Singtel Optus and global consulting group Accenture. And as Chairman of the Interactive Advertising Bureau (IAB) Australia, he sought to promote the convergence and growth of the local digital industry.
Nick is a dual British and Australian citizenship and holds a First Class Honours Degree in Business and Technology (Industrial Studies). Committee Membership:
• Development Committee
Previously Director of Media, Public Affairs and Brand Development across Bauer Media’s portfolio of 60-plus titles and magazine websites, Deborah was responsible for media, corporate marketing, PR, public affairs, sponsorships and events, plus the development of new revenue streams. These initiatives included licensed products for major magazine brands in partnership with leading retail chains across Australia and New Zealand. Deborah was also responsible for the company’s licensed international titles and was a Director on the Board of Post ACP, the company’s joint venture between Bauer Media and the Bangkok Post (Thailand). Committee Membership:
• Development Committee Deborah Thomas MAICD Director (Resigned: October 2014) Deborah joined the Board of Youth Off The Streets in August, 2013. Deborah was appointed both a Director of Ardent Leisure Group and the Manager in December 2013. On 10 March 2015, Deborah was appointed as the Managing Director and Chief Executive Officer of the Group and commenced in this role on 7 April 2015. Deborah is a former Editor-in-Chief of one of Australia’s biggest selling magazines, The Australian Women’s Weekly, a position she held for almost a decade. During the course of her career, she edited and managed some of Australia’s most popular women’s magazines before moving to a corporate role within ACP Magazines, now Bauer Media.
4 | Youth Off The Streets Financial Report 2015
Father Chris Keith Riley, AM Founder and CEO Father Chris Riley AM, Founder and Chief Executive Officer (CEO) of Youth Off The Streets, has worked with disadvantaged youth for more than 40 years in a variety of roles including teacher, youth worker, probation officer, residential carer, principal and CEO. Father Chris officially founded Youth Off The Streets in 1991.
As Chief Executive Officer of Youth Off The Streets, Father Chris oversees the operation of over 35 programs that employ over 200 staff and involve more than 400 volunteers. He has implemented innovative behaviour modification strategies to help young people deal with a history of trauma, abuse and neglect. He has grown the organisation from a single food van delivering meals to young homeless people on the streets of Kings Cross to a major youth specific agency providing a wide range of services such as crisis accommodation, independent schools, residential treatment programs, centres for youth, Aboriginal programs, and early intervention and prevention programs into troubled suburbs through an outreach service.
Qualifications:
Many of these strategies have been adopted by schools across Australia and by government agencies. Father Chris believes there is no such thing as a “child born bad”, but acknowledges that there are bad environments, circumstances and families that impact negatively on our young.
• Diploma of Psychology, Applied
We must have the courage to demand greatness from our youth.
• Diploma of Teaching (three years trained) Australian Catholic University, Chadstone, Victoria, 1975
• Secondary Teachers Certificate of Registration No. 37378, 1975
• Primary Teachers Registration Board, 1976
• Bachelor of Theology, Melbourne
College of Divinity, Clayton, Victoria, 1982
• Bachelor of Arts (major Sociology and English) Monash University, Clayton, Victoria, 1984
• Diploma of Abuse Counselling,
Australian Institute of Professional Counsellors, Queensland, 1996 School of Psychology, Sydney, 1997
• Diploma of Aboriginal Studies, TAFE NSW OTEN, 2010
• Certificate IV in Alcohol and Other Drugs, TAFE NSW OTEN, 2010
• Honorary Doctorate of Letters,
University of Western Sydney. “This award is in recognition of your outstanding humanitarian service to the community, especially youth,” 2010
• Masters of Special Education,
University of Southern Queensland, 2010.
• Diploma of Life Coaching,
Registered Training Australia, 2014
• Diploma of Youth Work • Master of Science in Restorative
Practices, International Institute for Restorative Practices Graduate School (current)
Dividends The Company is a non-profit organisation and the Constitution of the Company prohibits the payment of a dividend.
Principle activities Youth Off The Street Limited was incorporated in New South Wales on 30 April 2002. The principal activity of the Company is the provision of rehabilitation services to youth affected by drugs, alcohol and homelessness. Youth Off The Streets Limited commenced operating as a company, limited by guarantee, on 1 April 2003. There have been no significant changes in the nature of these activities during the year.
Operational and financial review Principal activities to meet objectives For the year ended 30 June 2015, Youth Off The Streets Limited reported a surplus of $1,241,117 (2014: deficit of $1,600,183), which represented a 178 per cent improvement on the previous financial year. This result was impacted by an amount of $178,569 attributed to the net loss on sale of our Southern Highlands properties, Better Homes Farm and Foundation House, which had previously been identified as surplus to requirements and written down by $605,664 in the previous financial year.
Committee Membership:
• Services Committee • Nominations Committee Directors’ Report | 5
Income received from government increased by 41.8 per cent from $8,101,451 in 2014 to $11,487,008 in 2015 attributable to the full year of the National Crime Prevention funding for the expansion of our Outreach Services and the growth in funding from the federal government’s six year commitment to the new needs-based school funding arrangements based on the Gonski model. Income from this source represents 48.5 per cent (2014: 43.8 per cent) of total revenue. Income from donations grew 25.8 per cent to $9,900,054 reflecting the ongoing impact of the implementation of the fundraising and branding review recommendations of 2012. Funding for capital works is included in government income. The total amount received for capital projects was $519,100, $269,100 was received from the Commonwealth Block Grant Authority through the Association of Independent Schools, and $250,000 from a major donor, both for site preparation to establish vocational training at Key College, Merrylands Campus.
Operating results for the year The operating result for the year ended 30 June 2015 was surplus of $1,241,117 (2014: deficit of $1,600,183).
Short term and long term objectives and strategy Youth Off The Streets will continue to provide services consistent with our mission of helping disconnected young people discover greatness
within, by engaging, supporting and providing opportunities to encourage and facilitate positive life choices. Our 35 services include homelessness services, alcohol and other drug services, counselling, aboriginal services, accredited high schools, centres for youth, outreach programs and specialised residential programs. This is in accordance with our renewed three year Strategic Plan which is reviewed annually to ensure that the organisation is well positioned to meet new challenges in our key focus areas. Youth Off The Streets has continued to outline the external and internal factors which will impact our organisation for the next three years, as part of our focus on providing a framework for a sustainable future through accountable, professional and collaborative practice. Youth Off The Streets will continue to adapt to the changes in funding requirements and opportunities from: the various federal, state and local governments provided through relevant grants; the generosity of individuals; and private and corporate donors. The organisation completed the implementation of the fundraising strategy and brand recommendations given from a fundraising and brand review that took place from January to June 2012. The Board continues to set clear expectations about the number and quality of programs provided to young people. The Board, in line with the CEO, have agreed reports for these programs noting progress towards strategic outcomes with these reports reviewed at the monthly Board meeting.
6 | Youth Off The Streets Financial Report 2015
Performance measurement Donation revenue of $9,900,054 (2014: $7,868,752) increased by 25.8 per cent largely from donations by individuals as well as bequests. This represented 41.8 per cent of total revenue. Expenditure for the year was $22,476,014 (2014: $20,106,769) largely due to an increase in staffing and related costs to support the growth of our Outreach programs, the New South Wales (NSW) government’s Going Home Staying Home (GHSH) Specialist Homelessness Services (SHS) funding for the Inner West Youth Homelessness Services, as well as the increase in the Department of Education and Training funding based on school enrolments.
Likely developments and expected results Change in Government Funding Models Based on Outsourcing Social Services As stated in last year’s report, there has been a strong trend toward consolidating the source and grouping of government funding and an increased emphasis on partnerships between Not for Profits to ensure the delivery of a broader range of programs, with one of the partners having the extra responsibility of administering the delivery of the program as a criteria to qualify for funding. For example, the Inner West Youth Homelessness Service. In addition, the government is exploring social impact investment models
for future funding. Social impact investments are organisations and financial funds with the intention to generate social and environmental impact alongside a financial return. There are a range of models being tested and implemented in Australia over the next couple of years, all of which are underpinned by the financial product – a social bond. The outcome of these projects will impact the future of government funding.
Implement Planned Business Growth The Board and the Executive Team held a Strategy Day in November 2014 facilitated by an external organisation. This collaborative approach between the Board and the Executive formed the 2014-2017 Strategic Plan. The aim of the day was to ensure that existing business needs are being met and that there is flexibility and alignment with future business needs. It resulted in the creation of nine projected outcomes and milestones needed to be reached to ensure these outcomes are successfully achieved over the next three years.
Continue to review the viability and impact of our programs and services As part of the framework for a sustainable future for our organisation, Youth Off The Streets reviews the viability and impact of our programs and services. In 2014/2015, Youth Off The Streets began the implementation of an organisationwide minimum data set. In addition we implemented an up-grade and collation of our service area databases to provide consistent and accessible program results for reporting. This approach is being rolled-out over the
next 12 -18 months, starting with our Dunlea Alcohol and Other Drug Youth Service and our Outreach programs.
Next Steps in our Fundraising and Brand Strategy In January 2012, Youth Off The Streets engaged More Strategic to review its fundraising and marketing structure and assist in the formulation of a three year fundraising strategy and brand development model that is sustainable and scalable. The review recommendations focused on building a fundraising team, implementing and reinvigorating the revenue streams related to all individual fundraising such as Appeals programs, Regular Giving, Donor Relations, and establishing proactive campaigns around Major Gifts and Bequests. Youth Off The Streets’ began its three year fundraising strategy focused on balancing the financial investment in fundraising with the expected return of investment in 2012/2013 with a focus on establishing and resourcing Individual fundraising with a focus on best Direct Marketing practice. In 2013/2014, the investment continued with the creation of the Father Chris Riley Society for our supporters who have decided to acknowledge Youth Off The Streets in their will, increasing the use of and implementing guidelines for our customer relationship management software to ensure better analysis and strategic decision making regarding income generation, and building an acquisition program for new donors and supporters. In 2014/2015, our focus was on donor care and stewardship, particularly in relation to our elderly donors. We invested time and resources in understanding the needs and wants of our donors in relation to frequency and preferences of communication. In
addition, we implemented the refresh of our brand and marketing materials, which included an updated logo, more youth-oriented marketing materials and a new website. Going forward Youth Off The Streets will build on the strong groundwork of the review recommendations and invest in what is working and review what is not to ensure a better return on investment going forward.
Directors’ meetings The number of meetings of directors held during the year and the number of meetings attended by each director were as follows:
Name of Directors
No. of meetings No. of held while meetings in office attended
Christopher Keith Riley
11
9
Craig Stuart Davis
11
9
Anna Maree Ainsworth
11
10
Rebecca Monica Grace Lynch
11
10
Richard John Gibbs
11
10
Richard John (Rick) Millen
11
10
Deborah Thomas (resigned October 2014)
3
2
Nicholas James Spooner (joined May 2015)
3
3
Directors’ Report | 7
Committee Membership
Services Committee Meetings
Directors acting on the committees of the Board and the meetings attended are as follows:
Audit, Finance and Risk Committee Meetings Name of Directors
No. of meetings No. of held while meetings in office attended
Richard John Gibbs
10
9
Richard John (Rick) Millen
10
10
Christopher Keith Riley*
10
7
Anna Maree Ainsworth (joined February 2015)
5
5
* Attendance by invitation only Audit, Finance and Risk Committee changed to the Audit and Risk Committee via a resolution of the Board meeting held April 15, 2015.
Nominations Committee Meetings Name of Directors
No. of meetings No. of held while meetings in office attended
Rebecca Monica Grace Lynch
2
2
Christopher Keith Riley
2
2
Richard John Gibbs
2
2
Name of Directors
No. of meetings No. of held while meetings in office attended
Anna Maree Ainsworth
9
8
Rebecca Monica Grace Lynch
9
9
Christopher Keith Riley
9
8
Development Committee Meetings Name of Directors
No. of meetings No. of held while meetings in office attended
Richard John Gibbs
8
8
Richard John (Rick) Millen
8
7
Deborah Thomas
8
1
Nicholas James Spooner (joined November 2014)
5
4
Member’s Guarantee The Company is a public company limited by guarantee that is incorporated and domiciled in Australia. If the Company is wound up, its Constitution states that each member is required to contribute a maximum of $20 each towards meeting any outstanding obligations of the Company. The total liability of members in the event of winding up the Company is $400 (2014: $400). At 30 June 2015 the number of members was 20 (2014: 20 members). The maximum number of members allowed under the Company’s Constitution is 100 members.
8 | Youth Off The Streets Financial Report 2015
Indemnification of Auditors To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year.
Auditor Independence The directors received an independence declaration from the auditor, Ernst & Young. A copy has been included on page 9 of the report. Signed in accordance with the resolution of the Directors.
Richard John Gibbs, Director Sydney, 21 October 2015
Christopher Keith Riley, Director Sydney, 21 October 2015
Auditor independence declaration
Directors’ Report | 9
Statement of profit or loss and other comprehensive income For the year ended 30 June 2015 Notes Government grants
2015 $
2014 $
11,487,008
8,101,451
Donations
9,900,054
7,868,752
Fundraising
1,794,090
1,566,585
434,141
456,943
Finance revenue
4.1
Other income
4.2
Revenue
101,838
512,855
23,717,131
18,506,586
Employee benefits expense
4.3
(14,366,703)
(13,215,701)
Depreciation expense
4.4
(1,168,194)
(1,132,973)
Other expenses
4.5
(6,941,117)
(5,758,095)
1,241,117
(1,600,183)
_
–
1,241,117
(1,600,183)
–
–
1,241,117
(1,600,183)
Surplus/(deficit) before income tax Income tax expense Surplus/(deficit) for the year Other comprehensive income Total comprehensive loss for the year
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
10 | Youth Off The Streets Financial Report 2015
Statement of financial position As at 30 June 2015 Notes
2015 $
2014 $
Assets Current assets Cash and cash equivalents
5
6,866,626
4,095,820
Other receivables
6
31,008
30,472
Other current assets
7
4,365,511
3,731,493
Assets classified as held for sale
8
–
2,211,266
11,263,145
10,069,051
Total current assets Non-current assets Investments
9
Property, plant and equipment
10
4,177,228
4,046,637
16,049,883
16,460,821
Total non-current assets
20,227,111
20,507,458
Total assets
31,490,256
30,576,509
Liabilities and funds Current liabilities Trade and other payables
11
2,365,857
2,839,606
Employee benefit liabilities
12
1,065,880
899,022
3,431,737
3,738,628
195,852
216,331
195,852
216,331
3,627,589
3,954,959
4,295,888
4,295,888
Total current liabilities Non-current liabilities Employee benefit liability Total non-current liabilities Total liabilities
12
Funds Contributed funds Retained surplus
23,566,779
22,325,662
Total funds
27,862,667
26,621,550
Total funds and liabilities
31,490,256
30,576,509
The above statement of financial position should be read in conjunction with the accompanying notes.
Directors’ Report | 11
Statement of changes in funds For the year ended 30 June 2015 Contributed Funds $
Retained Surplus $
Total Funds $
4,295,888
22,325,662
26,621,550
Surplus for the year
–
1,241,117
1,241,117
Other comprehensive income
–
–
–
Total comprehensive income for the year
–
1,241,117
1,241,117
At 30 June 2015
4,295,888
23,566,779
27,862,667
As at 1 July 2013
4,295,888
23,925,845
28,221,733
Deficit for the year
–
(1,600,183)
(1,600,183)
Other comprehensive income
–
–
–
Total comprehensive loss for the year
–
(1,600,183)
(1,600,183)
4,295,888
22,325,662
26,621,550
As at 1 July 2014
At 30 June 2014
The above statement of changes in funds should be read in conjunction with the accompanying notes.
12 | Youth Off The Streets Financial Report 2015
Statement of cash flows For the year ended 30 June 2015 Notes
2015 $
2014 $
Operating activities Receipts from customers Payments to suppliers and employees
24,491,143
17,879,547
(22,607,637)
(17,072,658)
378,617
389,818
Interest received Dividends received
55,524
67,125
2,317,647
1,263,832
2,076,985
529,700
Purchase of property, plant and equipment
(801,544)
(731,940)
Purchase of other financial assets
(273,833)
(22,247)
82,611
~
Net cash flows from operating activities Investing activities Proceeds from sale of property, plant and equipment
Proceeds from disposal of other financial assets Purchase of short-term deposits Net cash flows from/(used in) investing activities
(631,060)
(139,938)
453,159
(364,425)
–
–
Financing activities Net cash flows from/(used in) financing activities Net increase in cash and cash equivalents
2,770,806
899,407
Cash and cash equivalents at opening balance date
4,095,820
3,196,413
6,866,626
4,095,820
Cash and cash equivalents at 30 June
5
The above statement of cash flows should be read in conjunction with the accompanying notes.
Directors’ Report | 13
Notes to the financial statements 1. Corporate information
except for investments and other financial assets, which have been measured at fair value.
The financial statements of Youth Off The Streets Limited for the year ended 30 June 2015 were authorised for issue in accordance with a resolution of the directors on 21 October 2015.
The financial report is presented in Australian dollars.
Youth Off The Streets Limited (the Company) is a not for profit company limited by guarantee incorporated and domiciled in Australia. The registered office and principal place of business of the Company is 133 O’Riordan Street, Mascot NSW 2020. The nature of the operations and principal activities of the Company are described in the directors’ report.
2. Summary of significant accounting policies 2.1 Basis of preparation The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 – Reduced Disclosure Requirements, other authoritative pronouncements of the Australian Accounting Standards Board and Australian Charities and Not-for-Profits Commission Regulation 2013. The financial report has also been prepared on a historical cost basis,
The financial statements of the Company comply with Australian Accounting Standards – Reduced Disclosure Requirements as issued by the Australian Accounting Standards Board (AASB).
2.2 Changes in accounting policy, disclosures, standards and interpretations The accounting policies adopted are consistent with those of the previous financial reporting. The new and amended Australian Accounting Standards and AASB Interpretations that apply for the first time in 2014/2015 do not impact the financial statements of the Company. a.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above.
14 | Youth Off The Streets Financial Report 2015
b.
Other receivables
Other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an allowance for impairment. Collectibility of other receivables is reviewed on an ongoing basis. Individual debts that are known to be uncollectible are written off when identified. An impairment provision is recognised when there is objective evidence that the Company will not be able to collect the receivable. c.
Investments and other financial assets
Investments and financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are categorised as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Designation is re-evaluated at each reporting date, but there are restrictions on reclassifying to other categories. When financial assets are recognised initially, they are measured at fair value, plus, in the case of assets not at fair value through profit or loss, directly attributable transaction costs. Recognition and derecognition All regular way purchases and sales of financial assets are recognised on the trade date i.e., the date that the Company commits to purchase
the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the market place. Financial assets are derecognised when the right to receive cash flows from the financial assets have expired or when the entity transfers substantially all the risks and rewards, it derecognises the asset if it has transferred control of the assets. Subsequent measurement Financial assets at fair value through profit or loss Financial assets are classified as ‘financial assets designated at fair value through profit or loss’ as the group of financial assets is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management strategy and information about the group is provided internally on that basis to the entity’s key management personnel. Gains or losses on financial assets at fair value through profit or loss are recognised in profit or loss and the related assets are classified as non-current assets in the statement of financial position. d.
Property, plant and equipment
Buildings, plant and equipment are stated at historical cost less accumulated depreciation and any impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. All other repairs and maintenance are recognised in the statement of profit or loss and other comprehensive income as incurred.
Land is stated at historical cost less any impairment in value. Property, plant and equipment acquired at no cost or for a nominal amount, is recognised at fair value as at the date of acquisition. Subsequent to initial recognition, such property, plant and equipment is measured at cost, being the fair value at acquisition. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:
• Buildings – over 25 to 40 years • Computer – 3 to 4 years • Furniture and fittings – 4 to 5 years • Motor vehicles – over 5 years • Plant and equipment – 4 to 5 years An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss and other comprehensive income when the asset is derecognised. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
e.
Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement. A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease. An operating lease is a lease other than a finance lease. Operating lease payments are recognised as an operating expense in the statement of profit or loss and other comprehensive income on a straight-line basis over the lease term. f.
Impairment of non-financial assets
Non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company conducts an internal review of asset values, which is used as a source of information to assess for any indicators of impairment. External factors, such as changes in expected future processes, technology and economic conditions, are also monitored to assess for indicators of impairment. If any indication of impairment exists, an estimate of the asset’s recoverable amount is calculated.
Notes to the financial statements | 15
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets that suffered an impairment are tested for possible reversal of the impairment whenever events or changes in circumstances indicate that the impairment may have reversed. g.
Trade and other payables
Trade and other payables are carried at amortised cost and due to their short-term nature they are not discounted. They represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition. h.
Provisions and employee benefit liabilities
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the
reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit or loss and other comprehensive income net of any reimbursement. Wages and salaries Liabilities for wages and salaries, including non-monetary benefits which are expected to be settled within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Long service leave and annual leave The Company does not expect its long service leave or annual leave benefits to be settled wholly within 12 months of each reporting date. The Company recognises a liability for long service leave and annual leave measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. i.
Revenue recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
16 | Youth Off The Streets Financial Report 2015
The following specific recognition criteria must also be met before revenue is recognised: (i) Government grants Government grants are recognised when there is reasonable assurance that the Company will comply with the conditions attaching to them, and that the grants will be received. (ii) Donations and fundraising income Donations and fundraising income are recognised as income when received and when the Company is entitled to receive the contribution. (iii) Donations-in-kind Donations-in-kind of assets or other services are recorded as revenue at the fair value to the Company where this can be quantified and a third party is bearing the cost. No amounts are included in the financial statements for services provided by volunteers. (vi) Interest revenue Revenue is recognised on a cash receipts basis. (v) Dividends Revenue is recognised when the Company has received the dividend. j.
Taxes
Youth Off The Streets Limited has approved status as an income tax exempt charitable entity and therefore incurs no liability to pay income tax.
Goods and services tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except:
• When the GST incurred on a sale
or purchase of assets or services is not payable to or recoverable from the taxation authority, in which case the GST is recognised as part of the revenue or the expense item or as part of the cost of acquisition of the asset, as applicable
• When receivables and payables are stated with the amount of GST included
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as part of operating cash flows. k.
Self-generating and regenerating assets
Livestock assets are valued at cost at each reporting date. l.
Fair value measurement
The Company measures investments and other financial assets at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
material adjustment to the carrying amount of assets or liabilities affected in future periods.
• In the principal market for the asset
Estimates and assumptions
or liability, or
• In the absence of a principal
market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible to by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
3. Significant accounting judgements, estimates and assumptions The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur. Impairment of non-financial assets The Company assesses impairment of non-financial assets at each reporting date by evaluating conditions specific to the Company and to the particular asset that may lead to impairment. These include technology, economic and political environments and future expectations. If an impairment trigger exists the recoverable amount of the asset is determined. Management does not consider that the triggers for impairment testing have been significant enough and as such these assets have not been tested for impairment in this financial period. Valuation of donations-in-kind The estimation of donations-in-kind valuation is based on discussions with the third party donor of the goods or services, or, where required, expert valuation.
Notes to the financial statements | 17
4. Revenue and expenses 2015 $
2014 $
378,617
389,818
4.1 Finance revenue Interest received Dividends
55,524
67,125
434,141
456,943
–
190,794
Other income
101,838
322,061
Total other income
101,838
512,855
12,841,093
11,849,284
384,625
349,017
1,140,985
1,017,400
14,366,703
13,215,701
522,152
538,853
Total finance revenue
4.2 Other income Fair value gains on investments
4.3 Employee benefits expense Wages and salaries Workers' compensation costs Defined contribution superannuation expense Total employee benefits expense
4.4 Depreciation expense Depreciation of non-current assets Land and buildings Computer equipment and software
81,740
91,923
Furniture and fittings
121,707
132,480
Plant and equipment
56,902
57,317
385,693
312,400
1,168,194
1,132,973
781,990
560,799
Motor vehicles Total depreciation expense
4.5 Other expenses Communication and general office expenses Residential expenses – food, housing, education
1,120,575
806,037
Premises outgoings
355,068
370,510
Motor vehicles
310,183
270,241
Advertising
575,935
394,294
Repairs and maintenance
618,972
512,461
Travel expense
335,565
345,283
2,221,776
1,424,534
Net losses on disposal of property, plant and equipment
178,569
15,975
Minimum lease payments – operating lease
381,853
452,297
–
605,664
60,631
–
6,941,117
5,758,095
Other expenses
Fair value loss on non-current assets classified as held for sale Fair value loss on investments Total other expenses
18 | Youth Off The Streets Financial Report 2015
5. Cash and cash equivalents Cash at bank and in hand
2015 $
2014 $
6,866,626
4,095,820
Cash at bank earns interest at floating rates based on daily bank deposit rates. The carrying amounts of cash and cash equivalents represent fair value.
Reconciliation to the statement of cash flows For the purposes of the statement of cash flows, cash and cash equivalents comprise of the above.
6. Other receivables 2015 $
2014 $
31,008
30,472
31,008
30,472
2015 $
2014 $
221,453
220,995
2,920
420
4,141,138
3,510,078
4,365,511
3,731,493
No.
No.
2
2
Current Other receivables
7. Other current assets Prepayments and other assets Livestock Term deposit
(a) Physical quantity of livestock Number of horses owned
(b) Nature of assets The livestock is used at the residential properties for the enjoyment of the children in the care of Youth Off The Streets Limited.
(c) Term deposit Included in the term deposit is reserved cash of $414k (2014: $728k) representing the deferred revenue from the Attorney General’s Office (“AG”) funding it received during the year. The cash is restricted for use solely for the activities as mandated by the agreement entered into by and between the Company and AG.
Notes to the financial statements | 19
8. Assets classified as held for sale In financial year 2014, following the closure of Matthew Hogan School and our residential program Better Homes Farm and Foundation House, the Company has decided to sell its properties in Canyonleigh. Subsequent to this decision, the Company determined the fair value of these using the market appraisals provided by the appointed real estate agents less its estimated cost to sell. As at 30 June 2015, all relevant properties have been disposed. 2015 $
2014 $
Net book value
–
2,816,930
Fair value less costs to sell
–
(2,211,266)
Loss directly charged to profit and loss
–
605,664
2015 $
2014 $
4,177,228
4,046,637
2015 $
2014 $
At cost
16,323,950
16,020,832
Accumulated depreciation
(1,886,548)
(1,434,137)
Net carrying amount
14,437,402
14,586,695
9. Investments Non-current Financial assets at fair value through profit or loss Investments
10. Property, plant and equipment Land and buildings
Computer equipment At cost Accumulated depreciation Net carrying amount
428,304
595,320
(335,739)
(478,049)
92,565
117,271
846,385
917,992
(579,673)
(546,333)
266,712
371,659
660,776
750,604
(535,504)
(583,360)
125,272
167,244
Furniture and fittings At cost Accumulated depreciation Net carrying amount Plant and equipment At cost Accumulated depreciation Net carrying amount
20 | Youth Off The Streets Financial Report 2015
2015 $
2014 $
At cost
2,051,317
2,014,242
Accumulated depreciation
(923,385)
(796,290)
Net carrying amount
1,127,932
1,217,952
At cost
20,310,732
20,298,990
Accumulated depreciation
(4,260,849)
(3,838,169)
Net carrying amount
16,049,883
16,460,821
14,586,695
17,898,863
Additions
372,986
43,615
Disposals
(127)
–
–
(2,816,930)
Motor vehicles
Total property, plant and equipment
Reconciliation of carrying amounts at the beginning and the end of the year Land and buildings At 1 July
Transfer to asset held for sale Depreciation charge for the year Net carrying amount at 30 June
(522,152)
(538,853)
14,437,402
14,586,695
117,271
212,590
Computer equipment At 1 July Additions
57,948
7,137
Disposals
(914)
(10,533)
Depreciation charge for the year
(81,740)
(91,923)
Net carrying amount at 30 June
92,565
117,271
371,659
508,298
Furniture and fittings At 1 July Additions
17,699
1,040
Disposals
(939)
(5,199)
Depreciation charge for the year
(121,707)
(132,480)
Net carrying amount at 30 June
266,712
371,659
167,244
177,723
Plant and equipment At 1 July Additions
15,204
57,636
Disposals
(274)
(10,798)
Depreciation charge for the year
(56,902)
(57,317)
Net carrying amount at 30 June
125,272
167,244
1,217,952
956,274
337,707
622,512
Motor vehicles At 1 July Additions Disposals
(42,034)
(48,434)
Depreciation charge for the year
(385,693)
(312,400)
Net carrying amount at 30 June
1,127,932
1,217,952
Notes to the financial statements | 21
2015 $
2014 $
16,460,821
19,753,748
Additions
801,544
731,940
Disposals
(44,288)
(74,964)
–
(2,816,930)
Depreciation charge for the year
(1,168,194)
(1,132,973)
Net carrying amount at 30 June
16,049,883
16,460,821
2015 $
2014 $
307,508
465,020
Total property, plant and equipment At 1 July
Transfer to asset held for sale
11. Trade and other payables Current Trade payables Other payables
2,058,349
2,374,586
2,365,857
2,839,606
Fair value Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value.
12. Employee benefit liabilities 2015 $
2014 $
Current Annual leave
866,199
698,980
Long service leave
199,681
200,042
1,065,880
899,022
195,852
216,331
Non-current Long service leave
Nature and timing of provisions Long service leave Refer to note 2 for the relevant accounting policy and a discussion of the significant estimations and assumptions applied in the measurement of this provision.
22 | Youth Off The Streets Financial Report 2015
13. Commitments and contingencies 13.1 Commitments Operating lease commitments – Company as lessee The Company has entered into commercial leases on certain motor vehicles and rental properties. These leases have a term between 1 to 8 years with some leases having a renewal option included in the contracts. There are no restrictions placed upon the lessee by entering into these leases. Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:
Within one year After one year but not more than five years Total minimum lease payments
2015 $
2014 $
209,196
225,236
50,700
93,135
259,896
318,371
13.2 Contingencies No contingent liabilities exist as at the date of this financial report (2014: none).
14. Related party disclosures Amounts owed from/(to) related parties $ Related party Christopher Keith Riley, AM
2015
6,926
2014
793
Christopher Keith Riley, AM is a director of Youth Off The Streets – Overseas Relief Fund Limited, which owes $69 to the Company (2014: $1,365 owed to the Company).
Terms and conditions of transactions with related parties Outstanding balances at year-end are unsecured, interest free and settlement occurs in cash.
Allowance for impairment loss on related party receivables For the year end 30 June 2015, the Company has not made any allowance for impairment loss relating to amounts owed by related parties as there has been a good payment history (2014: $nil). An impairment assessment is undertaken each financial year by examining the financial position of the related party and the market in which the related party operates to determine whether there is objective evidence that a related party receivable is impaired. When such objective evidence exists, the Company recognises an allowance for the impairment loss.
Notes to the financial statements | 23
15. Key management personnel 15.1 Compensation key management personnel
Total compensation
2015 $
2014 $
1,034,614
1,251,494
The compensation to key management personnel includes compensation to all the directors and the executive management of the Company.
15.2 Other transactions and balances with key management personnel and their related parties There were no other transactions and balances with key management personnel or their related parties.
16. Events after the reporting date There have been no significant events occurring after the reporting date which may affect either the Company’s operations or results of those operations or the Company’s state of affairs.
17. Economic dependency Youth Off The Streets Limited is dependent upon funding in the form of government grants, corporate and individual donations and funds received through various fundraising events.
18. Information and declaration to be furnished under the Charitable Fundraising Act 1991 The Company is registered under the Charitable Fundraising Act to conduct fundraising activities.
18.1 Details of aggregated gross income and total expenses of fundraising appeals 2015 $
2014 $
Gross proceeds from donations and fundraising appeals Corporate
808,776
855,293
Individuals/benefactors
1,472,453
1,447,299
Bequests
2,885,748
1,509,804
Foundations and trust
1,033,601
933,528
345
3,275
33,175
13,916
Masses donations Anonymous Registered clubs Newsletters School fundraising
24 | Youth Off The Streets Financial Report 2015
290,850
273,950
2,323,103
2,072,360
42,817
40,770
Funerals/weddings/birthdays
2015 $
2014 $
68,189
45,834
Other groups
394,504
98,932
Payroll giving
259,558
319,449
Gifts in kind
108,171
132,468
Net community online
178,764
121,874
9,900,054
7,868,752
724,874
683,385
183
364
Event – Internal
370,773
175,214
Event – External
656,287
673,096
41,973
34,526
1,794,090
1,566,585
Total revenue from donations and fundraising
11,694,144
9,435,337
Staffing expenses
(1,086,258)
(1,107,747)
(5,727)
(40,343)
(145,247)
(79,370)
Total revenue from donations Op shop sales Service learning kits
Merchandise Total revenue from fundraising
Transport Communication and office expenses
(58,580)
(48,718)
Advertising and promotion
Administration costs
(938,158)
(523,346)
Op shop costs
(482,130)
(522,371)
(2,716,100)
(2,321,895)
Total expenses Net surplus from fundraising appeals Government grants Expenses attributable to provision of services
8,978,044
7,113,442
11,487,008
8,101,451
(19,520,519)
(17,163,235)
Finance revenue and other income Net losses on disposal of property, plant and equipment
535,979
779,004
(178,764)
(15,975)
(60,631)
190,794
Fair value gains on investments Fair value loss on non-current assets classified as held for sale Surplus/(deficit) for the year
-
(605,664)
1,241,117
(1,600,183)
18.2 Statement showing how funds received were applied to charitable purposes Funds were used for the provision of services to youth affected by drugs, alcohol and homelessness. Our core services included Aboriginal services, education, residential services and community development.
18.3 Fundraising appeals conducted during the financial year The following fundraising appeals were conducted: four Direct Mail appeals, the Macsim Sydney to Surfers Charity Bike Ride, the Annual Cooley Classic Golf Day, two Eden Garden morning teas, the Campbelltown Catholic Club Golf Day, the Gala Dinner, and Lipstick Lunch.
Notes to the financial statements | 25
18.4 Comparison by monetary figures and percentages 2015 $
2014 $
2,716,100
2,321,895
11,694,144
9,435,337
23%
25%
8,978,044
7,113,442
11,694,144
9,435,337
77%
75%
Total cost of services
19,520,519
17,163,235
Total expenditure
22,476,014
19,082,105
87%
90%
Total cost of services
19,520,519
17,163,235
Total income received
23,717,131
18,506,586
82%
93%
Total cost of fundraising Gross income from fundraising %
Net surplus from fundraising Gross income from fundraising %
%
%
26 | Youth Off The Streets Financial Report 2015
Directors’ declaration In accordance with a resolution of the directors of Youth Off The Streets Limited, We state that: In the opinion of the directors: (a) the financial statements and notes of Youth Off The Streets Limited for the financial year ended 30 June 2015 are in accordance with the Corporations Act 2001 and the Australian Charities and Not-for-Profits Commission Act 2012, including: (i) giving a true and fair view of the entity’s financial position as at 30 June 2015 and of its performance for the year ended on that date; and (ii) complying with Accounting Standards – Reduced Disclosure Requirements and the Corporations Regulations 2001 and the Australian Charities and Not-for-Profits Commission Regulation 2013; (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; (c) the statement of financial position gives a true and fair view of the state of the affairs of the Company with respect to fundraising appeals; (d) the provisions of the Charitable Fundraising Act 1991, the regulations under the Charitable Fundraising Act 1991 and the conditions attached to the fundraising authority have been complied with by the Company; and (e) the internal controls exercised by the Company are appropriate and effective in accounting for all income received and applied by the Company from any of its fundraising appeals.
On behalf of the board
Richard John Gibbs, Director Sydney, 21 October 2015
Christopher Keith Riley, Director Sydney, 21 October 2015
Directors’ declaration | 27
Independent auditor’s report
28 | Youth Off The Streets Financial Report 2015
Independent auditor’s report | 29
Youth Off The Streets is accredited as a Designated Agency and maintains policies and procedures that comply with the benchmark standards as defined by the Office for Children the Children’s Guardian. All donations over $2.00 are tax deductible. Charitable Fund Raising No. 12611. Youth Off The Streets Limited ABN 29 100 388 412. Phone: 1800 062 288 | Email: info@youthoffthestreets.com.au Facebook: www.facebook.com/youthoffthestreetsaustralia Twitter: @YOTSAustralia | Instagram: @youthoffthestreets Pinterest: www.pinterest.com/youthoffstreets/ Youtube: YOTS011 www.youthoffthestreets.com.au