YOORALLA
ANNUAL FINANCIAL REPORT
30 JUNE 2014
ABN 14 005 304 432
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FINANCIAL REPORT
Yooralla reported total comprehensive income of $0.5m in the year ended 30 June 2014. This included book value adjustments of $1.5m of unrealised gains on equity investment and a one off business combination gain of $3.5m on the acquisition of EDAR. The deficit recorded from operations was $4.4m
Revenue from operations is recorded at $103.6m, an increase of $5.5m on the previous year (2012/13). Increases in Government revenue for 13/14 continued the trend of previous years. The revenue increases afforded to Yooralla do not correspond with higher increases in costs.
The chart below shows another positive year of revenue growth in line with preceding years. It is through strategic mergers that Yooralla has achieved revenue growth above indexation.
Sources of income from Government bodies continue to provide Yooralla with the majority of our income stream. The support that we receive from Department of Human Services, Department of Education and Early Childhood Development and the Commonwealth Department of Social Services is imperative to providing quality services to our clients. The government derived income has amounted to $86.2m for the 2013/14 financial year.
Increases in operating expenditure continue to provide Yooralla with difficult trading conditions. Expenses in 13/14 increased above the rise in revenue. This directly resulted in the significant operating deficit of $4.4m. Labour costs continue to be the largest of Yooralla expense items. Management implemented a number of efficiency initiatives during the 13/14 year and have undertaken re-structures and other cost saving strategies across a number of Yooralla divisions. This will deliver a much improved result in 14/15.
The Net Assets of Yooralla at the end of the 2013/14 financial year were $56.3m. This included $3.5m gain on net assets from the EDAR acquisition. Yooralla has embarked upon a program of asset improvement in line with the transition to NDIS. Yooralla has created a solid financial base which can now be utilised to make strategic investment in Information Technology and Property Assets. This development will leverage Yooralla to be well positioned to provide enhanced services to our customers as NDIS is implemented over the following years.
Yooralla continues to rely on the generosity of the public in the form of annual donations, bequests and trusts. On behalf of the clients of Yooralla, we therefore wish to thank all our financial supporters. It is only with these additional revenues that Yooralla is able to ensure the continuation of its services to people with a disability across Victoria and maintain the financial strength of the organisation.
Claire Keating
Chairperson - Finance, Audit, Infrastructure Risk Committee
22 September 2014
DIRECTORS’ REPORT
Your Directors submit their report for the year ended 30 June 2014.
Directors
The names and the details of the members of the Board during the financial year and until the date of this report are set out elsewhere in this report. The Board members were in office for the entire period unless otherwise stated.
Corporate Information
Yooralla is a company limited by guarantee and the liability of members of Yooralla is limited to $50 each. The principal activity of Yooralla is to provide services for people with disabilities in the State of Victoria. Yooralla’s range of essential services includes therapy, accommodation, respite, equipment, employment, recreation and help in and out of the home.
Objectives
Yooralla’s objectives are guided by our vision, which is a world where people with disability are equal citizens.
Yooralla's new strategic plan, SMART Choices, reflects Yooralla’s need to continue driving service transformation, to maximise the value we add for people with disability in an NDIS environment.
Through SMART Choices, Yooralla will focus on providing relevant and quality services for children and adults with disability, their families and carers. Our services include a range of accommodation alternatives, respite, in-home support, therapy, attendant care, assistive technologies, employment, education, recreation, training and practical skills for daily living.
The Yooralla Promise, as an Australian human service provider, informed by its Victorian context and engaged with the people and the local communities it serves, Yooralla promises to advance:
Services / Offer outstanding products and services that support people with disability, in all their diversity, to live the life they choose.Markets / Understand consumer needs and meet these through the development of appropriate partnerships, programs, leadership and management.
Access / Easily connect with and use Yooralla services.
Reputation / Demonstrate and build integrity through evidence based solutions and measurable results.
Talent / Engaged, responsive staff who are educated, skilled, inspired and who demonstrate our Yooralla values.
These five important and interconnecting elements make up the Yooralla Promise.
Progress against our strategic plan is governed through the preparation and monitoring of annual business plans and tracking a number of key performance indicators. These performance indicators broadly monitor services meeting contemporary customer needs, productivity measures, increased customer numbers and service recognition, client satisfaction, research that leads to change in practice and service delivery, financial performance, and increased staff engagement.
Review of Operations and Results
Yooralla's total comprehensive income for the year ended 30 June 2014 was $503,689 (2013: $6,561,560). Included in the comprehensive income for the year were unrealised gains on equity investment of $1.5m, other income from capital grants, bequests and a $3.5 million gain from the acquisition of EDAR. Typical operational activity for the year ended June 2014 resulted in Yooralla posting a deficit of $4.4 million.
Total revenues increased by $1.0 million. This increase is reflective of a $5.8 million increase in revenue from operating activities, a $3.5 million gain from the acquisition of EDAR, less the $8.1 million one-off gain from the sale of the Glenroy property recorded in 2012/13.
The increase in revenue from operating activities of $5.8 million is attributable to rate adjustments to recurring government grants by $3.7m and revenue from the EDAR services acquired on 1 July 2013 of $4.5 million.
Total operating expenses increased by $7.5 million. The increase is due to expenditure from EDAR services acquired on 1 July 2013 of $4.4 million, employee pay increase entitlements through award agreements of $1.8 million, the full year impact of leasing motor vehicles of $0.3m and non-capital investment in IT infrastructure, research, investigation and organisation restructure costs of $2.5 million.
Principal Activities
The company’s principal activities for the year were:
· Residential and carer support for people with disabilities
· Community and Independence services
· Children’s school and early intervention services
· Recreation services
· Adult day program services
· Supported employment services
· Raising of funds for these activities through government grants, fee for service and fundraising.
Significant events or changes in affairs after balance date
The directors are not aware of any other matter or circumstance which will significantly or may significantly affect Yooralla's operations, the result of those operations or Yooralla's state of affairs.
Directors Benefits
No non-executive director of Yooralla has received or became entitled to receive a benefit by reason of a contract made by Yooralla with a director, with a firm of which a director is a member, or with a company in which a director has a substantial financial interest, except as disclosed in Note 20.
Environmental regulations
The Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of any State or Territory.
Indemnification and insurance of officers and auditors
During the financial year, insurance cover was provided in respect of directors’ and officers’ liability under the State Government’s insurance policy for State Government of Victoria funded Community Service Organisations. A premium was not incurred by Yooralla to give effect to this cover.
Yooralla has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of Yooralla or of any related body corporate against a liability incurred as such an officer or auditor.
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of Yooralla or intervene in any proceedings to which Yooralla is a party for the purpose of taking responsibility on behalf of Yooralla for all or any part of those proceedings. Yooralla was not a party to any such proceedings during the year.
Directors’ Meetings
During the year, the number of Board and Committee Meetings held and attended by Directors were as follows:
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Board Meetings / Committee MeetingsDirectors / Finance, Audit, Infrastructure and Risk (formally Finance, Audit and Infrastructure) / Service Delivery & Quality (formally People, Quality and Policy / Investment / Business Strategy & Performance / Governance & People (formally Nominations and Remuneration)
Number of meetings held / 7 / 5 / 4 / 1 / 2 / 3
Number of meetings attended:
Dr Peter Langkamp (1) / 7 / 5 / 4 / 1 / 2 / 3
Mr Sanjib Roy / 6 / 5 / 3 / 1 / 2 / 3
Mr Ian Silk / 6 / 4 / 1 / 2
Mr Phillip Slater (2) / 4/5* / 3/3* / 1
Ms Fiona Smith / 7 / 2 / 2 / 3
Ms Claire Keating / 6 / 4 / 1/1*
Mr Robert Walker (3) / 7 / 4 / 2 / 3
Ms Barbara Alexander AO / 6 / 4 / 1
Mr Wayne Ramsey AM / 5 / 3
(1) Resigned on 7 Aug 2014
(2) Resigned on 14 Feb 2014
(3) Resigned on 7 Aug 2014
* Number of meetings the director was a member of the committee
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Auditors’ Independence and Non-Audit Services
The directors received a declaration from the auditor of Yooralla which is included with the Independent Audit Report on pages 47 to 49.
On behalf of the Board
Signed in accordance with a resolution of the Directors.
Wayne Ramsey AM
Chairperson
22 September 2014
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CORPORATE GOVERNANCE
The Board of Directors of Yooralla is responsible for corporate governance of the organisation. The Board guides and monitors the business and affairs of Yooralla to ensure that it achieves its Objects, as set out in the Constitution, and acts on behalf of its members by whom it is elected and to whom it is accountable.
The Board sets the policies, strategic direction and annual budget of Yooralla. It decides what services and programs are to be provided and supported. The Chief Executive, appointed by and accountable to the Board, is responsible for the day to day operations and administration of Yooralla.
The Board aims to ensure it discharges its responsibilities in an appropriate manner and it has established Charters and Policies to guide its actions.
The Board ensures that the members are informed and the information is communicated through:
· The annual report which is distributed to all members;
· The annual general meeting and such other meetings as may be called to obtain approval for Board action as required by the Constitution.
Composition of the Board
The composition of the Board is determined in accordance with Yooralla’s Constitution:
· The Board must comprise between seven and ten directors. The members can vote at a general meeting to change the limits on the number of directors. However the limits cannot be lower than five nor greater than fifteen. The Board can still act even if it has fewer directors than its lower limit. However, if it has fewer than five directors it cannot do anything other than appoint more directors so that there are five in all.
· A person can become a director by being elected by the members at an Annual General Meeting. At each Annual General Meeting, at least one third of the Board (those on the Board for the longest time since last elected) must resign and having done so, are eligible to be re-elected. These rotation requirements do not include the Chief Executive Officer.
· At the first Board meeting after each Annual General Meeting, the Board must elect a Chairman and a Deputy Chairman.
· The Board can appoint a member to fill a casual vacancy on the Board. He or she will hold office until the next Annual General Meeting and will be eligible for re-election at that meeting.
· ·At any meeting of Yooralla, the members present in person or by proxy, who are entitled to vote, may, by a majority vote, remove a director and appoint a replacement.
· The Board meets in accordance with the Constitution and its directions and follows meeting guidelines set down to ensure all directors are made aware of, and have available all necessary information, to participate in an informed discussion of all agenda items.
Details of the members of the Board of Yooralla during the financial year are set out elsewhere in this Annual Report.
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Codes of Conduct
Codes of Conduct have been developed to establish the professional standards of behaviour required of directors, management and staff in the conduct of Yooralla’s affairs. In particular, the Staff Code seeks to provide guidance to staff to assist them to act with confidence and integrity in their interpersonal relationships with consumers, consumers’ family members, carers and advocates. The Codes are periodically reviewed and updated as required.
Risk Management Framework
The Board ensures that a risk assessment process is regularly undertaken and that control and monitoring processes are both in place and reviewed on a regular basis. The Board is supported in this responsibility through its sub-committees and by the development and formalisation and policies and procedures at the organisational and divisional levels.
Board Committees
The Board has established the following Committees to assist it in carrying out its responsibilities:
Finance, Audit, Infrastructure & Risk Committee (formerly Finance, Audit & Infrastructure)
This Committee’s primary purpose is to advise the Board and the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and other members of the senior management team in matters relating to:
a) Risk: assisting the Board and the CEO and CFO to discharge their responsibilities for oversight and governance of risk within Yooralla;