where the money went financial report 2014€¦ · bauer media. in her current role as director of...

WHERE THE MONEY WENT

—FINANCIALREPORT

2014

Acknowledgements Design by L+L Design | www.l-ldesign.com.au

ContentsDirectors Report 02Auditor independence declaration 09Statement of Profit or Loss and Other Comprehensive Income 10Statement of financial position 11Statement of changes in funds 12Statement of cash flows 13Notes to the financial statements 141. Corporateinformation 142. Summaryofsignificantaccountingpolicies 143. Significantaccountingjudgments,estimatesand

assumptions 174. Revenueandexpenses 185. Cashandcashequivalents 196. Otherreceivables 197. Othercurrentassets 198. Assetsclassifiedasheldforsale 209. Investments 2010. Property,plantandequipment 2111. Tradeandotherpayables 2312. Employeebenefitliabilities 2313. Commitmentsandcontingencies 2314. Relatedpartydisclosures 2415. Keymanagementpersonnel 2416. Eventsafterbalancedate 2417. Economicdependency 2418. Information and declaration to be furnished under the

CharitableFundraisingAct1991 25

Directors’ declaration 27Independent auditor’s report 28

Contents | 1

Directors ReportFor the year ended 30 June 2014

Your Directors submit their report for the year ended 30 June 2014.

Directors

The names and details of the Company’s Directors in office during the financial year and until the date of this report are as follows. 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 (Appointed: 22 August 2013)

• Christopher Keith Riley, AM

Names, qualifications, experience and special responsibilities

RichardJohnGibbs,GAICDChairperson

Richard has been a Director since 2006. He was appointed Chairperson in February 2011. He is the Global Head of Economics and Chief Economist at Macquarie Group, where he is responsible for providing analysis and strategic advice on developments in domestic and international economies, and investment markets. He plays a key strategic advisory role in support of Macquarie Group’s securities trading, banking services, corporate finance, infrastructure and funds management businesses. He also acts as a specialist adviser to the Boards of several of the Group’s major institutional clients and provides strategic advice to the Board of Macquarie Group.

Richard holds a Bachelor of Economics (Hons) and a Master of International Economics and Finance specialising in macroeconomic policy, finance and public policy administration. He also 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.

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 Australia-Oman 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

AnnaMareeAinsworth,GAICDDirector

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.

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.

2 | Youth Off The Streets Financial Report 2014

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.


• Services Committee – Chair

Craig Stuart Davis 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.

After a successful career playing Australian Football League (AFL) for Carlton, Kangaroos, Collingwood and Sydney Swans, Craig is now Consultant to Sport for 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 CEO 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).

Craig holds a Surveying Certificate from the Royal Melbourne Institute of Technology.

Rebecca Monica Grace Lynch Director

Rebecca has been a Director since 2005.

Rebecca is a special counsel at Thomson Geer Lawyers. She holds a LLB (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 official accreditation as a mediator by LEADR (1994). Rebecca is a member of the Law Society of NSW.


• Services Committee

• Nominations Committee – Chair

RichardJohn(Rick)Millen,GAICDDirector

Rick has been a Director since 2007. Rick was a partner of Pricewaterhouse Coopers (PwC) (retired June 2011). During his time, Rick led the Advisory Practice and sat on PwC’s leadership team. For five 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.


• Development Committee

• Audit, Finance and Risk Committee – Chair

Directors Report | 3

DeborahThomas,MAICDDirector (Appointed: 22 August 2013)

Deborah joined the Board of Youth Off The Streets in August 2013. One of the country’s most successful and experienced magazine editors, Deborah was at the helm of Australia’s biggest selling magazine, The Australian Women’s Weekly, for a decade and has been editing some of Australia’s most popular women’s magazines for over 20 years, before moving to a corporate role within Bauer Media.

In her current role as Director of Media, Public Affairs and Brand Development across Bauer Media’s portfolio of 60-plus magazines, websites and social media, Deborah is responsible for media, events, communications, brand licensing and sponsorships, as well as key advertising relationships.

In 2012 Deborah was elected to local government as a Councillor for Woollahra. She is a Non-Executive Director of Ardent Leisure (ASX200), Deputy Chair of the National Library of Australia, and a founding patron of the Taronga Conservation Foundation.


• Development Committee

FatherChristopherKeithRiley,AMFounder and CEO

Father Chris Riley AM, Founder and 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 and principal. Father Riley officially founded Youth Off The Streets in 1991.

As CEO of Youth Off The Streets, Father Riley oversees the operation of over 35 programs that employ over 200 staff and involve more than 478 volunteers. He has implemented innovative behaviour modification strategies to help young people deal with a history of trauma, abuse and neglect.

Many of these strategies have been adopted by schools across Australia and by Government agencies. Father Chris Riley 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.

“We must have the courage to demand greatness from our youth.”

• Diploma of Teaching (3 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

• Diploma of Psychology, Applied 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

Father Riley is a member of the Children’s Court Advisory Committee; Headspace Macarthur, Campbelltown, Southern Highlands; Regional Development Committee Sydney; and is Patron of the Care Van Foundation in the Albury region.


• Services Committee

• Nominations Committee


DividendsThe Company is a non-profit organisation and the Constitution of the Company prohibits the payment of a dividend.

Principal activitiesYouth 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, exclusion from school, neglect, abuse 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.

Operating and financial reviewPrincipal activities to meet objectives

For the year ended 30 June 2014, Youth Off The Streets Limited reported a deficit of $1,600,183 (2013: deficit of $1,050,696), which represented a 52 per cent increase in deficit on the previous financial year. This increase in deficit includes $1,024,664, attributed to non-operational and non-recurrent expenses, as detailed in the Performance Measurement section below. The deficit for the year – after excluding the non-operational items – is $575,519, which represents a 45 per cent improvement on the previous financial year.

Income received from government increased by 2 per cent from $7,970,324 in 2013 to $8,101,451 in 2014. Income from this source represents 44 percent (2013: 46 per cent) of total revenue.

Funding for capital works is included in government income. The final payment of $226,430 (2013: $1,738,221) was accepted from the Regional Development Authority Funding for the refurbishment of our Cordeaux Heights Centre for Youth. Capital projects ensure staff and young people are provided with adequate infrastructure resources to maximise learning and development outcomes.

Operating results for the year

The deficit for the Company for year ended 30 June 2014 was $1,600,183 (2013: deficit of $1,050,696).

Short term and long term objectives and strategyYouth 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 crisis accommodation, alcohol and other drug services, counselling, accredited high schools, centres for youth, outreach programs and specialised residential programs. This is in accordance with our existing 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 is in the second year of implementing a fundraising strategy and brand development model. This is based on 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 has agreed, in line with the Chief Executive Officer, to measurable outputs for each service, and performance reports noting the progress made towards achieving these outputs, are reviewed at the monthly Board meeting.

Performance measurementDonation revenue of $7,868,752 (2013: $6,941,635) increased by 13 per cent largely from donations by individuals. This represented 43 per cent of total revenue.

Expenditure for the year was $20,106,769 (2013: $18,410,689). The majority of the increase in expenses is mainly due to non-operational and non-recurrent items as a result of the following:


• Following the closure of Matthew Hogan School and our Southern Highlands residential programs, Better Homes Farm and Foundation House, the Canyonleigh properties have been put on the market as they are surplus to requirements. The closures are due to fewer young people being referred to our residential service and the low number of school enrolments resulting in the school becoming no longer sustainable. Alternative arrangements were made for these young people to ensure their educational needs are being met.

• The estimated fair values of the Canyonleigh properties were obtained from market appraisals provided by our appointed real estate agents. This resulted in a write down of $605,664 from the properties’ carrying costs. This amount was charged directly as an expense for this financial year. As a result of the closure of Matthew Hogan School, we are required to repay previous capital funding received from the federal government for buildings there. The amount of $419,000 has also been recognised as an expense for this financial year.

Operational expenditure for the year amounted to $19,082,105 which was an increase of 4 per cent from 2013. This increase was largely due to increased staffing cost.

Likely developments and expected resultsPartnerships and Consortiums

Across both NSW and federal governments there has been a strong trend toward consolidating the source and grouping of funding, previously there were several government departments looking after our funding however these have largely been consolidated. In addition, there has been 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. While this means a successful tender will now generate larger sums than previously, organisations are now incurring higher operating costs and having to deliver more programs for similar amounts of funding. Youth Off The Streets has seen increased competition for funding between organisations, as well as increased risk to key programs being shut down due to consolidation of grant programs. In response to this trend, Youth Off The Streets has been proactive over the last year in building and strengthening partnerships with other community service organisations, as well as local, state and federal government. This has led to an increase in the types of programs we offer young people within a service, increasing our chances of securing funding, and building our knowledge base through dynamic joint working arrangements. This approach was best evidenced during the Going Home Staying Home (GHSH) homeless services reform, led by the Department of Community Services.

This reform required Youth Off The Streets to prequalify and tender for the Inner West Youth Homelessness Service funding that included our crisis refuge program, Don Bosco Home, in Marrickville, Sydney; and the Macarthur Multipurpose Homelessness Service funding that included our Koch Centre for Youth & Learning in Macquarie Fields, Sydney. Youth Off The Streets formed strong partnerships with Wesley Mission and YWCA NSW in the Inner West of Sydney, and Uniting Care Burnside in the South West of Sydney. Both of these tenders were successful and announced in June 2014, and both will provide us with the opportunity to expand our services in two separate districts for the next three years.

Change in Program and Service Geographical Areas

In 2013/14, as part of the National Crime Prevention Funding announced in April 2013, we launched eight of the 10 new Outreach programs that expanded our Outreach Services from five to 15 into communities that are in need. This growth included a number of interstate (Queensland and Tasmania) and remote locations in NSW (Bourke and Illawarra). This led to additional requirements on our IT resources and infrastructure. There was a need for an IP (Internet Protocol) telephony solution providing increased connectivity within Youth Off The Streets. This allowed these sites to connect to shared resources, templates, reporting services and presentations and meet the requirements of their local communities.


Implement Planned Business Growth

There has been an impact on the structure of the organisation due to the changes in programs, significant government funding opportunities and interstate growth. As such, Youth Off The Streets is reviewing internal reporting lines and structure to accommodate planned business growth. The organisation’s aim is to ensure that existing business needs are being met and that there is flexibility and alignment with future business needs. The Board began the review in April 2014 and recommendations will be discussed at the Board Strategy Day in November 2014.

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. Subsequently the relevant programs and services are amended or enhanced according to the results. For example, one of our goals for this year was to develop an operational framework for our two Centres for Youth. As part of this process, Youth Off The Streets identified that the drop-in model was not meeting the needs of the local communities as it siloed the programs offered by the Centres. As a result, the Koch Centre for Youth was changed to a more structured, educational environment offering after-school programs. To match this new focus, the centre was renamed the Koch Centre for Youth & Learning (KC4Y&L).

Continued Implementation of our 2012 Fundraising and Brand Review recommendations

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. Over six months, More Strategic audited Youth Off The Streets’ fundraising model, including the evaluation of the level of investment in fundraising, compared our performance to that of best practice fundraising strategies and tools in Australia and clarified gaps and opportunities for growth. Two major issues were identified; a lack of investment in fundraising in comparison to organisation growth and an unbalanced income portfolio with a reliance on two vulnerable revenue streams (Bequests and Major Gifts). 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, and 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 2012/13 with a focus on establishing and resourcing Individual fundraising with a focus on best Direct Marketing practice.

In 2013/14, 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.

Directors’ meetingsThe number of meetings of Directors held during the year and the number of meetings attended by each Director were as follows:

Name of Directors

Number of meetings

held while in office

Number of

meetings attended

Christopher Keith Riley 11 10

Craig Stuart Davis 11 11

Anna Maree Ainsworth 11 10

Rebecca Monica Grace Lynch

11 9

Richard John Gibbs 11 11

Richard John (Rick) Millen 11 9

Deborah Thomas 11 7


Committee membershipDirectors acting on the committees of the Board and the meetings attended are as follows:

Audit,FinanceandRiskCommittee Meetings

Name of Directors

Number of meetings


Number of

meetings attended



Christopher Keith Riley* 11 10

* Attendance by invitation only

Nominations Committee Meetings

Name of Directors

Number of meetings


Number of

meetings attended


4 4



Services Committee Meetings

Name of Directors

Number of meetings


Number of

meetings attended

Anna Maree Ainsworth 10 9


10 8


Development Committee Meetings

Name of Directors

Number of meetings


Number of

meetings attended



Deborah Thomas 10 4

Member’s guaranteeThe 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 (2013: $380).

At 30 June 2014 the number of members was 20 (2013: 19 members). The maximum number of members allowed under the Company’s Constitution is 100 members.

Indemnification of auditorsTo 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 independenceThe directors received an independence declaration from the auditor, Ernst & Young. A copy has been included on page 10 of the report.

Signed in accordance with a resolution of the directors.

Richard John Gibbs Chairman Sydney 15 October 2014

ChristopherKeithRiley,AM Director Sydney 15 October 2014


Auditor independence declaration


Statement of Profit or Loss and Other Comprehensive IncomeFor the year ended 30 June 2014

Notes2014

$2013

$

Government grants 8,101,451 7,970,324

Donations 7,868,752 6,941,635

Fundraising 1,566,585 1,657,617

Finance revenue 4.1 456,943 688,002

Other income 4.2 512,855 102,415

Revenue 18,506,586 17,359,993

Employee benefits expense 4.3 (13,215,701) (12,732,121)

Depreciation expense 4.4 (1,132,973) (895,030)

Other expenses 4.5 (5,758,095) (4,783,538)

Deficit before income tax (1,600,183) (1,050,696)

Income tax expense – –

Deficit for the year (1,600,183) (1,050,696)

Other comprehensive income – –

Total comprehensive loss for the year (1,600,183) (1,050,696)

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes, that

are in the Financial Report that can be found at www.youthoffthestreets.com.au/annualreport


Statement of financial positionAs at 30 June 2014

Notes2014

$2013

$

Assets

Current assets

Cash and cash equivalents 5 4,095,820 3,196,413

Other receivables 6 30,472 51,170

Other current assets 7 3,731,493 3,616,530

Assets classified as held for sale 8 2,211,266 470,711

Total current assets 10,069,051 7,334,824

Non-current assets

Investments 9 4,046,637 3,833,596

Property, plant and equipment 10 16,460,821 19,753,748

Total non-current assets 20,507,458 23,587,344

Total assets 30,576,509 30,922,168

Liabilities and funds

Current liabilities

Trade and other payables 11 2,839,606 1,618,499

Employee benefit liabilities 12 899,022 784,432

Total current liabilities 3,738,628 2,402,931

Non-current liabilities

Employee benefit liability 12 216,331 297,504

Total non-current liabilities 216,331 297,504

Total liabilities 3,954,959 2,700,435

Funds

Contributed funds 4,295,888 4,295,888

Retained surplus 22,325,662 23,925,845

Total funds 26,621,550 28,221,733

Total funds and liabilities 30,576,509 30,922,168

The above statement of financial position should be read in conjunction with the accompanying notes.


Statement of changes in fundsFor the year ended 30 June 2014

Contributed funds $

Retained surplus $

Total funds $

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)

At 30 June 2014 4,295,888 22,325,662 26,621,550

As at 1 July 2012 4,295,888 24,976,541 29,272,429

Deficit for the year – (1,050,696) (1,050,696)

Other comprehensive income – – –

Total comprehensive loss for the year – (1,050,696) (1,050,696)

At 30 June 2013 4,295,888 23,925,845 28,221,733

The above statement of changes in funds should be read in conjunction with the accompanying notes.


Statement of cash flowsFor the year ended 30 June 2014

Notes2014

$2013

$

Operating activities

Receipts from customers 17,879,547 16,685,574

Payments to suppliers and employees (17,072,658) (17,820,361)

Interest received 389,818 622,584

Dividends received 67,125 65,418

Net cash flows from/(used in) operating activities 1,263,832 (446,785)

Investing activities

Proceeds from sale of property, plant and equipment 529,700 498,831

Purchase of property, plant and equipment (731,940) (3,160,766)

Purchase of other financial assets (22,247) (2,057,485)

(Purchase)/proceeds from short-term deposits (139,938) 2,813,693

Net cash flows used in investing activities (364,425) (1,905,727)

Financing activities

Net cash flows from/(used in) financing activities – –

Net increase/(decrease) in cash and cash equivalents 899,407 (2,352,512)

Cash and cash equivalents at opening balance date 3,196,413 5,548,925

Cash and cash equivalents at 30 June 5 4,095,820 3,196,413

The above statement of cash flows should be read in conjunction with the accompanying notes.


Notes to thefinancialstatementsFor the year ended 30 June 2014

1. Corporate information

The financial statements of Youth Off The Streets Limited for the year ended 30 June 2014 were authorised for issue in accordance with a resolution of the Directors on 15 October 2014.

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 and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared on a historical cost basis,

except for investments and other financial assets, which have been measured at fair value.

The financial report is presented in Australian dollars.

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 Changesinaccountingpolicy,disclosures,standardsand interpretations

The accounting policies adopted are consistent with those of the previous financial year except as follows:

New and amended standards and interpretations

The Company has adopted the following new and amended Australian Accounting Standards and AASB Interpretations as of 1 July 2013:

• AASB 13 Fair Value Measurement

The adoption of the above new and amended Australian Accounting Standards and AASB Interpretations do not have any material impact on the financial statements of the Company.

Several other amendments apply for the first time in 2013/2014. However, the adoption of the amendments does not impact the annual 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.

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 financialassets

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 throughprofitorloss

Financial assets are classified as ‘financial assets designated at fair value through profit or losses 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,plantand 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 inception date, whether 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, even if that right is not explicitly specified in an arrangement.

Company as a lessee

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-financialassets

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.

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

Notestothefinancialstatements|15

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 benefitliabilities

General

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,salariesandannualleave

Liabilities for wages and salaries, including non-monetary benefits and annual leave 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

The liability for long service leave is recognised and 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. 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 purchase of assets or services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item, 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.

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.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

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:

• In the principal market for the asset 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 judgments, 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 accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and assumptions

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.

Impairmentofnon-financialassets

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.


4. Revenue and expenses2014

$2013

$

4.1 Finance revenue

Interest received 389,818 622,584

Dividends 67,125 65,418

Total finance Revenue 456,943 688,002

4.2 Other income

Fair value gains on investments 190,794 30,480

Other income 322,061 71,935

Total other income 512,855 102,415

4.3 Employee benefits expense

Wages and salaries 11,849,284 11,113,882

Workers' compensation costs 349,017 684,372

Defined contribution superannuation expense 1,017,400 933,867

Total employee benefits expense 13,215,701 12,732,121

4.4 Depreciation expense

Depreciation of non-current assets

Land and buildings 538,853 474,886

Computer equipment and software 91,923 95,595

Furniture and fittings 132,480 56,773

Plant and equipment 57,317 33,736

Motor vehicles 312,400 234,040

Total depreciation expense 1,132,973 895,030

4.5 Other expenses

Communication and general office expenses 560,799 611,506

Residential expenses – food, housing, education 806,037 703,929

Premises outgoings 370,510 501,390

Motor vehicles 270,241 224,972

Advertising 394,294 378,645

Repairs and maintenance 512,461 617,696

Travel expense 345,283 299,290

Other expenses 1,424,534 796,031

Net losses on disposal of property, plant and equipment 15,975 23,669

Minimum lease payments – operating lease 452,297 573,944

Fair value loss on non-current assets classified as held for sale 605,664 52,466

Total other expenses 5,758,095 4,783,538


Included in the other expenses are non-operational and non-recurrent items for such items described below:

• following the closure of Matthew Hogan School and our residential programs Better Homes Farm and Foundation House we have decided to sell those Canyonleigh properties. The estimated fair value less costs to sell were obtained from market appraisals provided by our appointed real estate agents for these properties. This resulted in a write down of $605,664 from the properties' carrying costs. This amount was charged directly as an expense for this financial year; and

• in addition, we are required to repay previous capital funding received from the federal government for Matthew Hogan School. The amount of $419,000 has also been recognised as an expense for this financial year.

5. Cash and cash equivalents2014

$2013

$

Cash at bank and in hand 4,095,820 3,196,413

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.

Reconciliationtothestatementofcashflows

For the purposes of the statement of cash flows, cash and cash equivalents comprise of the above.

6. Other receivables2014

$2013

$

Other receivables 30,472 39,123

GST receivable – 12,047

30,472 51,170

7. Other current assets2014

$2013

$

Prepayments and other assets 220,995 245,970

Livestock 420 420

Term deposit 3,510,078 3,370,140

3,731,493 3,616,530

No No

a. Physical quantity of livestock

Number of horses owned 2 2


b. Nature of assets

The above livestock was donated to Youth Off The Streets Limited. 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 $728,000 (2013: $nil) 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.

8. Assets classified as held for saleFollowing 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 properties using the market appraisals provided by the appointed real estate agents less its estimated cost to sell as follows:

2014 $

2013 $

Net book value 2,816,930 523,177

Fair value less costs to sell (2,211,266) (470,711)

Loss directly charged to profit and loss 605,664 52,466

The assets classified as held for sale at 30 June 2013 relates to the property for the Southern Highlands Residential Program which was sold in September 2013 for a consideration of $470,711.

9. Investments2014

$2013

$

Non-current

Financial assets at fair value through profit or loss

Investments 4,046,637 3,833,596


10. Property, plant and equipment2014

$2013

$

Land and buildings

At cost 16,020,832 19,581,094

Accumulated depreciation (1,434,137) (1,682,231)

Net carrying amount 14,586,695 17,898,863

Computer equipment

At cost 595,320 600,993

Accumulated depreciation (478,049) (388,403)

Net carrying amount 117,271 212,590

Furniture and fittings

At cost 917,992 946,194



Plant and equipment

At cost 750,604 708,397



Motor vehicles

At cost 2,014,242 1,486,388


Net carrying amount 1,217,952 956,274

Total property, plant and equipment

At cost 20,298,990 23,323,066

Accumulated depreciation (3,838,169) (3,569,318)

Net carrying amount 16,460,821 19,753,748

Reconciliation of carrying amounts at the beginning and the end of the year

Land and buildings

At 1 July 17,898,863 16,010,662

Additions 43,615 2,388,192

Disposals – (25,105)

Transfer to asset held for sale (2,816,930) –

Depreciation charge for the year (538,853) (474,886)

Net carrying amount at 30 June 14,586,695 17,898,863


2014 $

2013 $

Computer equipment

At 1 July 212,590 254,609

Additions 7,137 54,746

Disposals (10,533) (1,170)


Net carrying amount at 30 June 117,271 212,590

Furniture and fittings

At 1 July 508,298 467,661

Additions 1,040 97,410

Disposals (5,199) –



Plant and equipment

At 1 July 177,723 93,771

Additions 57,636 117,688

Disposals (10,798) –



Motor vehicles

At 1 July 956,274 690,031

Additions 622,512 502,730

Disposals (48,434) (2,447)


Net carrying amount at 30 June 1,217,952 956,274

Total property, plant and equipment

At 1 July 19,753,748 17,516,734

Additions 731,940 3,160,766

Disposals (74,964) (28,722)

Transfer to asset held for sale (2,816,930) –

Depreciation charge for the year (1,132,973) (895,030)

Net carrying amount at 30 June 16,460,821 19,753,748


11. Trade and other payables2014

$2013

$

Trade payables 465,020 328,657

Other payables 2,374,586 1,289,842

2,839,606 1,618,499

Fair value

Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value.

12. Employee benefit liabilities2014

$2013

$

Current

Annual leave 698,980 649,771

Long service leave 200,042 134,661

899,022 784,432

Non current

Long service leave 216,331 297,504

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.

13. Commitments and contingencies13.1 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:

2014 $

2013 $

Within one year 225,236 337,059

After one year but not more than five years 93,135 220,166

Total minimum lease payments 318,371 557,225

13.2 Contingencies

No contingent liabilities exist as at the date of this financial report (2013: none).


14. Related party disclosuresAmounts owed from/(to)

related parties

$

Related party

Christopher Keith Riley, AM 2014 793

2013 2,883

Christopher Keith Riley, AM is a director of Youth Off The Streets – Overseas Relief Fund Limited which owes $1,365 to the Company (2013: $50 owed from 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 2014, 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 (2013: $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.

15. Key management personnel15.1 Compensation key management personnel

2014 $

2013 $

Total compensation 1,251,494 300,793

The compensation to key management personnel includes compensation to all the directors and the executive management of the Company. During the current financial year, a number of senior managers were appointed to the executive committee which was newly formed and all members of the executive committee are identified as key management personnel.

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 balance dateThere have been no significant events occurring after the balance date which may affect either the Company’s operations or results of those operations or the Company’s state of affairs.

17. Economic dependencyYouth 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

2014 $

2013 $

Gross proceeds from donations and fundraising appeals

Corporate 855,293 916,390

Individuals/benefactors 1,447,299 1,553,158

Bequests 1,509,804 936,265

Foundations and trust 933,528 802,169

Masses donations 3,275 13,543

Anonymous 13,916 15,621

Registered clubs 273,950 334,300

Newsletters 2,072,360 1,487,466

School fundraising 40,770 47,010

Funerals/weddings/birthdays 45,834 44,576

Other groups 98,932 121,178

Payroll giving 319,449 377,127

Gifts in kind 132,468 129,681

Net community online 121,874 163,151

Total revenue from donations 7,868,752 6,941,635

Op shop sales 683,385 763,786

Service learning kits 364 454

Event – Internal 175,214 137,249

Event – External 673,096 708,318

Merchandise 34,526 47,810

Total revenue from fundraising 1,566,585 1,657,617

Total revenue from donations and fundraising 9,435,337 8,599,252

Staffing expenses (1,107,747) (1,051,981)

Transport (40,343) (14,687)

Communication and office expenses (79,370) (177,613)

Administration costs (48,718) (81,772)

Advertising and promotion (523,346) (315,002)

Op shop costs (522,371) (660,379)

Total expenses (2,321,895) (2,301,434)

Net surplus from fundraising appeals 7,113,442 6,297,818

Government grants 8,101,451 7,970,324

Expenses attributable to provision of services (17,163,235) (16,033,120)

Finance revenue and other income 779,004 759,937


2014 $

2013 $

Net losses on disposal of property, plant and equipment (15,975) (23,669)

Fair value gains on investments 190,794 30,480

Fair value loss on non-current assets classified as held for sale (605,664) (52,466)

Deficit for the year (1,600,183) (1,050,696)

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 Fundraisingappealsconductedduringthefinancialyear

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 and the Campelltown Catholic Club Golf Day.

18.4 Comparisonbymonetaryfiguresandpercentages

2014 $

2013 $

Total cost of fundraising 2,321,895 2,301,434

Gross income from fundraising 9,435,337 8,599,252

% 25% 27%

Net surplus from fundraising 7,113,442 6,297,818

Gross income from fundraising 9,435,337 8,599,252

% 75% 73%

Total cost of services 17,163,235 16,033,120

Total expenditure 19,082,105 18,334,554

% 90% 87%

Total cost of services 17,163,235 16,033,120

Total income received 18,506,586 17,359,993

% 93% 92%


Directors’ declarationIn accordance with a resolution of the directors of Youth Off The Streets Limited, we state that:

1. 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 2014 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 2014 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 Chairman Sydney 15 October 2014

ChristopherKeithRiley,AM Director Sydney 15 October 2014


Independent auditor’s report


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: [email protected]

www.facebook.com/youthoffthestreetsaustralia Twitter: @YOTSAustralia | Instagram: @youthoffthestreets www.youthoffthestreets.com.au

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