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Banyule Community Health ACN 135 660 454

Financial Report

for the year ended

30 June 2014

Banyule Community Health ACN 135 660 454 Financial Statements For the Year Ended 30 June 2014


Contents For the Year Ended 30 June 2014

Page

Financial Statements Directors’ Report 1 Auditor’s Independence Declaration 7 Statement of Profit or Loss and Other Comprehensive Income 8 Statement of Financial Position 9 Statement of Changes in Equity 10 Statement of Cash Flows 11 Notes to the Financial Statements 12 Directors’ Declaration 33 Independent Audit Report 34

Page

Financial Statements

Directors' Report.............................................................................................................................................1

Auditors Independence Declaration ...............................................................................................................7

Statement of Profit or Loss and Other Comprehensive Income ....................................................................8

Statement of Financial Position......................................................................................................................9

Statement of Changes in Equity...................................................................................................................10

Statement of Cash Flows .............................................................................................................................11

Notes to the Financial Statements ...............................................................................................................12

Directors' Declaration ...................................................................................................................................33

Independent Audit Report.............................................................................................................................34


Directors' Report 30 June 2014

The directors present their report on Banyule Community Health for the financial year ended 30 June 2014.

1. General information

Information on directors

The names of each person who has been a director during the year and to the date of this report are: John Ferraro Qualifications Bachelor Science, Bachelor Orthoptics, Master Health Administration Experience John is a trained Orthoptist and has previously worked as a clinician in

the private and public sector. Previously he has also been employed in various roles within the acute health and university sectors. John is a Director of the Victorian Deaf Society and a member of their Finance and Audit Committee and Investment Management Committee. John has been a member of the Board of Directors since 2008.

Special responsibilities Chair BCH Board of Directors; Member of the Client Services and Staffing Sub Committee

Peter Ogden Experience Peter retired in 2008 after 30 years as a director of a sign

manufacturing business in West Heidelberg, and has been a member of the Board of Directors since 1990.

Special responsibilities Member of the Audit and Finance Sub Committee

Bill Barber (Retired 27 February 2014)

Qualifications Diploma in Building & Building Surveying; Certificate IV in Legal Studies; Cert IV Work Place Assessment; Cert IV in OH&S

Experience Bill has worked for the former cities of Coburg and Malvern as well as a private building surveyor. He spent 42 years in State and Local Government as a building surveyor and Director in Local Government in enforcing building laws and local By Laws. Bill worked for 15 years as a private consultant project managing and building surveying. Bill is currently Co-opted to the building Practitioners Board at the Building Commission. Bill was elected to the Board of Directors in 2007.

Special responsibilities Member of the Client Services and Staffing Sub Committee

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1. General information (continued)

Information on directors (continued)

Chris Deakin (Appointed 23 October 2013)

Qualifications Bachelor of Economics, Diploma Financial Services and Prince 2 Project Management.

Experience Chris has lived in the Banyule area for over 20 years and has served the community through terms as Treasurer and President at Heidelberg Primary School and Councillor and President at Viewbank College. Chris’ professional career as seen over 25 years in financial services. Her current role is Manager Strategic Partnerships for First State Super. Chris joined the BCH Board of Directors in October 2013.

Special responsibilities Member of the Client Services and Staffing Sub-Committee

David McKenzie Qualifications David commenced his career as a primary school teacher and has

taught at many local schools such as Watsonia, Viewbank, Greenhills, Briar Hill and Eltham. He holds a Degree in Economics.

Experience David was a foundation member of the Diamond Valley Shire Council (1964) and Shire President from 1969 to 1971. David was the Member for Diamond Valley in the House of Representatives from 1972 to 1975. He was the former Chairman of the Publications Committee of the House of Representatives and Chairman of the Joint House and Senate Publications Committee. He is the Past National President of the Association of Former Members of the Australian Parliament.

Special responsibilities Deputy Chair BCH Board of Directors; Member of the Audit and Finance Sub Committee

Bob Dunn (Retired 11 July 2013)

Experience Bob has been involved with Diabetes Support Group for 13 years, commencing with Greensborough/Diamond Valley Community Services which amalgamated with West Heidelberg Community Health Centre to form Banyule Community Health in 1997. Bob has been a key person in the Support Group, working tirelessly for the group, organising bus trips and social functions while acting as the chairperson and main contact. Bob is an editor and primary contributor to our monthly Diabetes Newsletter currently distributed to 260 members. Bob is dedicated to raising community awareness of diabetes and other chronic diseases by alerting members to the service available from Banyule Community Health. Bob retired from the Board of Directors on 11 July 2013.

Special responsibilities Client Services and Staffing Sub-Committee

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Anthony O'Donnell Qualifications Anthony holds a Bachelor of Nursing (Honours) and a Masters of

Health Administration. Experience Anthony O'Donnell is currently a Divisional Director of Nursing and

Operations at Melbourne Health. His background is as a registered nurse specialising in oncology and haematology and he has spent most of his clinical career at Box Hill Hospital and the Austin Hospital. Previously Anthony has been employed in a number of clinical and non-clinical roles and most recently was a project manager working on the Box Hill redevelopment. Anthony has extensive experience working in the acute health sector both as a clinician and a health planner. Anthony was appointed to the Board of Directors in 2011.

Special responsibilities Convenor of the Client Services and Staffing Sub-Committee

Dr Melissa Russell Qualifications PhD, Bachelor of Physiotherapy Experience Melissa's background is as a physiotherapist and she has worked in a

variety of fields of physiotherapy in Australia and overseas. Following many years as a physiotherapist Melissa undertook her PhD through the University of Melbourne and the National Ageing Research Institute and completed it in 2008. She has since worked in public health research, focusing on the areas of healthy ageing, the benefits of physical activity and injury prevention. She is currently employed at the University of Melbourne as a Lecturer in Epidemiology and Coordinator of the Master of Public Health course.

Special responsibilities Member of the Client Services and Staffing Sub-Committee

Craig Trenfield Qualifications Craig is a member of the Institute of Chartered Accountants and the

Australian Health Services Financial Management Association (AHSFMA) and holds a Bachelor of Business and a Graduate Diploma in Accounting.

Experience Craig joined the BCH Board of Directors on 1 April 2012. Craig Trenfield is an experienced financial executive with expertise in the Public Health sector having begun his career in health in 1995 when he joined Royal Melbourne Hospital. He later moved to Northern Health as the Finance Manager before taking up his current role in 2006 as Director Financial Services with Eastern Health. Prior to this, Craig spent many years as an Auditor with Coopers & Lybrand, both in Australia and Edinburgh, Scotland.

Special responsibilities Convenor of the Audit and Finance Sub-Committee; Treasurer of the BCH Board of Directors

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Anita Brown Qualifications Bachelor of Arts/Bachelor of Laws, Master of Intellectual Property Law,

legal practitioner, registered trade mark attorney, journalist Experience Anita has worked as both a journalist and a lawyer. She also has an

interest in privacy and freedom of information law and is a member of the Federal Government's Information Advisory Committee. Anita also sits on the Committee of Management for Olympic Adult Education.

Special responsibilities Member of the Audit and Finance Sub-Committee

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Company secretary

The following person held the position of Company secretary at the end of the financial year:

Jim Pasinis(Dip Accounting, Grad Dip Health Administration, Associate Fellow Australasian College Health Service Management (ACHSM)) has been the company secretary since 16 November 2009. In addition to his role as company secretary, Jim has worked for Banyule Community Health for the past 20 years as its CEO.

Significant changes in state of affairs

No significant changes in the Company's state of affairs occurred during the financial year.

Principal activities

The principal activity of Banyule Community Health during the financial year was the provision of health and welfare services.

No significant changes in the nature of the Company's activity occurred during the financial year.

Operational plan 2013-14 Strategy Outcome Area of Focus 1: Community Responsiveness

Goals/Objectives: 1. Increase reach of our programs and services Establish health promotion initiatives

for disadvantaged youth in youth based organisations.

15 projects established. Services included, Parkville Youth Justice Centre (includes residents from West Heidelberg), The Pavilion (community school), secondary schools, TAFE, youth mental health service and the Somali community.

2. Embed a client-centred approach Increase clinician’s capacity to deliver Person Centred Care practices for discharge and continuity of care.

Policy & Procedure in client discharge and continuity of care developed. All clinical staff trained accordingly and cross agency tools have been trialed.

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3. Improve access and equity for marginalised and at risk populations

Reduce the wait time for clients between first point of contact and making an appointment.

- 100% of clients for Gambler’s Help Services receive an appointment at first point of contact. i.e., no wait list. - Wait list for Diabetes Educator has reduced to a few days instead of 2 weeks.

Increase education and employment pathways for the ATSI community.

- Ongoing employment of one ATSI staff after successful completion of the traineeship. - Development of Health Promotion Cadetship position for ATSI university student. - A position under development that will require positive discrimination employment of ATSI.

Area of Focus 2: Sustainability Goals/Objectives:

1. Ensure financial sustainability Ensure financial performance accountability in a period of senior staff transition.

A transition plan was developed and successfully implemented. Positions have been filled and workloads continue to be monitored and managed accordingly.

2. Effective utilisation of resources Establish employment/service provision using alternate funding sources.

Counselling services established a private practice clinic with MBS sources.

3. Continuously improve our positive working culture Implement performance appraisal component of Human Resources Information System (HRIS).

Performance appraisal module of HRIS has been developed, piloted and evaluated.

Area of Focus 3: Innovation and Creativity Goals/Objectives:

1. Improve our research and evaluation capacity Carry out two research/evaluation projects in partnership with a university.

Two research/evaluations have been completed with Swinburne University. 1. Physical Health Screening in a Community Based Alcohol Service. 2. The benefits of operating an educational student run clinic in a community setting.

2. Develop our knowledge management systems Reconfigure shared e-knowledge management to maximize accessibility.

Knowledge management survey conducted, software purchased to organise plans.

3. Address health literacy Increase capacity of staff at all levels of the agency to initiate and engage in health literacy.

100% leadership staff have been trained in Organisational Health Literacy with pilot projects planned. Training booked for clinicians.

92% of the initiatives in the 2013-14 Operational Plan were either completed or in significant progress over the course of the year.

Members guarantee

Banyule Community Health is a company limited by guarantee. In the event of, and for the purpose of winding up of the company, the amount capable of being called up from each member and any person or association who ceased to be a member in the year prior to the winding up, is limited to $ 1 for members that are corporations and $ 1 for all other members, subject to the provisions of the company's constitution.

At 30 June 2014 the collective liability of members was $ 646 (2013: $ 673).

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Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2014

Note 2014

$ 2013

$ Revenue 3 13,937,324 12,733,657 Employee benefits expense (10,163,720) (9,643,894) Depreciation and amortisation expense 4(a) (194,676) (223,407) Client programs & medical expenses 4(a) (1,297,649) (812,551) Lease expenses (101,796) (98,872) Motor vehicle & travel expenses (80,329) (132,850) Repairs & maintenance expenses (128,976) (144,023) Rental expenses (110,563) (92,127) Equipment purchases (101,861) (106,781) Consultancy fees (268,560) (154,235) Printing & stationery expenses (210,397) (192,334) Cleaning expenses (103,798) (105,560) Other expenses (615,764) (706,656) Finance costs 4(a) (7,168) (9,296)

Surplus/(loss) from operations 14 552,067 311,071

Other comprehensive income/(loss)

Items that will not be reclassified subsequently to profit or loss - - Items that will be reclassified to profit or loss when specific conditions are met - -

Other comprehensive income for the year, net of tax

- -

Total comprehensive income/(loss) for the year

552,067 311,071

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The accompanying notes form part of these financial statements.


Statement of Financial Position As At 30 June 2014

Note 2014

$ 2013

$

ASSETS

CURRENT ASSETS Cash and cash equivalents 5 3,542,829 3,220,796 Trade and other receivables 6 251,187 304,223 Other assets 7 37,558 25,116 TOTAL CURRENT ASSETS

3,831,574 3,550,135 NON-CURRENT ASSETS Property, plant and equipment 8 2,088,849 1,776,302 Intangible assets 9 15,046 20,062 TOTAL NON-CURRENT ASSETS

2,103,895 1,796,364 TOTAL ASSETS

5,935,469 5,346,499

LIABILITIES

CURRENT LIABILITIES Trade and other payables 10 914,735 1,292,828 Borrowings 11 12,364 38,396 Employee benefits 12 1,421,613 1,319,720 Other liabilities 13 602,183 355,496 TOTAL CURRENT LIABILITIES

2,950,895 3,006,440 NON-CURRENT LIABILITIES Borrowings 11 30,805 - Employee benefits 12 655,994 594,351 TOTAL NON-CURRENT LIABILITIES

686,799 594,351 TOTAL LIABILITIES

3,637,694 3,600,791 NET ASSETS

2,297,775 1,745,708

EQUITY

Retained earnings 14 2,297,775 1,745,708 TOTAL EQUITY

2,297,775 1,745,708

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Statement of Changes in Equity For the Year Ended 30 June 2014

2014

Note

Retained Earnings

$ Total

$ Balance at 1 July 2013 14 1,745,708 1,745,708 Comprehensive income/(loss) for the year 14 552,067 552,067

Balance at 30 June 2014 14 2,297,775 2,297,775 2013

Note

Retained Earnings

$ Total

$ Balance at 1 July 2012 14 1,434,637 1,434,637 Comprehensive income/(loss) for the year 14 311,071 311,071

Balance at 30 June 2013 14 1,745,708 1,745,708

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Statement of Cash Flows For the Year Ended 30 June 2014

Note 2014

$ 2013

$

CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from clients and government grants 15,434,542 13,619,635 Payments to suppliers and employees (14,643,385) (12,757,150) Interest received 65,665 110,847 Finance costs (7,168) (9,296) Net cash provided by (used in) operating activities 15(b) 849,654 964,036

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of plant and equipment 100,522 117,450 Purchase of property, plant and equipment (585,518) (525,451) Net cash provided by/(used in) investing activities

(484,996) (408,001)

CASH FLOWS FROM FINANCING ACTIVITIES:

Payment of borrowings (42,625) (73,396) Net cash used in financing activities

(42,625) (73,396) Net increase (decrease) in cash and cash equivalents held 322,033 482,639 Cash and cash equivalents at beginning of financial year 3,220,796 2,738,157 Cash and cash equivalents at end of financial year 15(a) 3,542,829 3,220,796

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Notes to the Financial Statements For the Year Ended 30 June 2014

The financial statements are for Banyule Community Health ("the Company") as a not-for-profit individual entity. Banyule Community Health is a company limited by guarantee, incorporated and domiciled in Australia.

The functional and presentation currency of Banyule Community Health is Australian dollars.

1 Summary of Significant Accounting Policies

(a) Basis of Preparation

Banyule Community Health applies Australian Accounting Standards - Reduced Disclosure Requirements as set out in AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements.

The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Australian Charities and Not-for-profits Commission Act 2012 (“ACNC Act 2012”).

Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated.

The financial statements have been prepared on an accruals basis and are based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

(b) Income Tax

No provision for income tax has been raised as the Company is exempt from income tax under Div 50 of the Income Tax Assessment Act 1997.

(c) Property, Plant and Equipment

Classes of property, plant and equipment are measured using the cost model as specified below.

Where the cost model is used, the asset is carried at its cost less any accumulated depreciation and any impairment losses. Costs include purchase price, other directly attributable costs and the initial estimate of costs of dismantling and restoring the asset, where applicable.

Land and buildings

Land and buildings are measured using the cost model.

Freehold land and buildings that have been contributed at no cost, or for nominal cost are valued and recognised at the fair value of the asset at the date it is acquired.

Plant and equipment

Plant and equipment are measured using the cost model.

Plant and equipment that have been contributed at no cost, or for nominal cost are valued and recognised at the fair value of the asset at the date it is acquired.

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1 Summary of Significant Accounting Policies (continued)

(c) Property, Plant and Equipment (continued)

Depreciation

The depreciable amount of all property, plant and equipment, except for freehold land is depreciated on a straight-line method from the date that management determine that the asset is available for use.

The depreciation rates used for each class of depreciable asset are shown below: Fixed asset class Depreciation rate Buildings/ Leasehold Improvements 5% Plant and Equipment 20% Furniture, Fixtures and Fittings 10% Motor Vehicles 12.5% Computer Equipment 20%

At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is reviewed. Any revisions are accounted for prospectively as a change in estimate.

When an assets is disposed, the gain or loss is calculated by comparing proceeds received with its carrying amount and is taken to profit or loss.

(d) Leases

Company as lessee

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to the Company are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for that period.

Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the Company will obtain ownership of the asset or over the term of the lease.

Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses on a straight-line basis over the life of the lease term.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

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(e) Financial instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. For financial assets, this is the equivalent to the date that the Company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transactions costs, except where the instrument is classified 'at fair value through profit or loss' in which case transaction costs are expensed to profit or loss immediately.

Classification and subsequent measurement

Financial instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties in an arm's length transaction. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as:

(a) the amount at which the financial asset or financial liability is measured at initial recognition;

(b) less principal repayments;

(c) plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and

(d) less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.

The classification of financial instruments depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and at the end of each reporting period for held-to-maturity assets.

The Company does not designate any interest as being subject to the requirements of accounting standards specifically applicable to financial instruments.

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting year.

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(e) Financial instruments (continued)

(ii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Company's intention to hold these investments to maturity. They are subsequently measured at amortised cost.

Held-to-maturity investments are included in non-current assets, except for those which are expected to be realised within 12 months after the end of the reporting period, which will be classified as current assets.

If during the period the Company sold or reclassified more than an insignificant amount of the held-to-maturity investments before maturity, the entire held-to-maturity investments category would be tainted and reclassified as available-for-sale.

(iii) Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Fees payable on the establishment of loan facilities are recognised as transaction costs of the loan.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm's length transactions, reference to similar instruments and option pricing models.

Impairment of financial assets

At the end of the reporting period the Company assesses whether there is any objective evidence that a financial asset or group of financial assets is impaired.

Financial assets at amortised cost

If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred , the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the financial assets original effective interest rate.

Impairment on loans and receivables is reduced through the use of an allowance accounts, all other impairment losses on financial assets at amortised cost are taken directly to the asset.

(f) Impairment of non-financial assets

At the end of each reporting period the Company determines whether there is an evidence of an impairment indicator for assets.

Where this indicator exists and regardless for goodwill, indefinite life intangible assets and intangible assets not

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(f) Impairment of non-financial assets (continued)

yet available for use, the recoverable amount of the assets is estimated.

Where assets do not operate independently of other assets, the recoverable amount of the relevant cash-generating unit (CGU) is estimated.

The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.

Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.

Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss, except for goodwill.

(g) Employee benefits

Short-term employee benefits

Provision is made for the Company’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled.

The Company’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as a part of current trade and other payables in the statement of financial position.

Other long-term employee benefits

The Company classifies employees’ long service leave and annual leave entitlements as other long-term employee benefits as they are not expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service. Provision is made for the Company’s obligation for other long-term employee benefits, which are measured at the present value of the expected future payments to be made to employees. Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures, and are discounted at rates determined by reference to market yields at the end of the reporting period on government bonds that have maturity dates that approximate the terms of the obligations. Upon the remeasurement of obligations for other long-term employee benefits, the net change in the obligation is recognised in profit or loss classified under employee benefits expense.

The Company’s obligations for long-term employee benefits are presented as non-current liabilities in its statement of financial position, except where the Company does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as current liabilities.

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(g) Employee benefits (continued)

Defined contribution schemes

All employees of the Company receive defined contribution superannuation entitlements, for which the Company pays the fixed superannuation guarantee contribution (currently 9.25% of the employee’s average ordinary salary) to the employee’s superannuation fund of choice. All contributions in respect of employees’ defined contribution entitlements are recognised as an expense when they become payable. The Company’s obligation with respect to employees’ defined contribution entitlements is limited to its obligation for any unpaid superannuation guarantee contributions at the end of the reporting period. All obligations for unpaid superannuation guarantee contributions are measured at the (undiscounted) amounts expected to be paid when the obligation is settled and are presented as current liabilities in the Company’s statement of financial position.

(h) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

Bank overdrafts also form part of cash equivalents for the purpose of the statement of cash flows and are presented within current liabilities on the statement of financial position.

(i) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year, which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(j) Goods and Services Tax (GST)

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payable are stated inclusive of GST.

The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the statement of cash flows are included 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 operating cash flows.

(k) Revenue and other income

Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economic benefits associated with the transaction will flow to the Company and specific criteria relating to the type of revenue as noted below, has been satisfied.

Revenue is measured at the fair value of the consideration received or receivable and is presented net of returns, discounts and rebates.

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(k) Revenue and other income (continued)

All revenue is stated net of the amount of goods and services tax (GST).

Grant revenue

Grant revenue is recognised in the statement of profit or loss and other comprehensive income when the Company obtains control of the grant, it is probable that the economic benefits gained from the grant will flow to the Company and the amount of the grant can be measured reliably.

When grant revenue is received whereby the Company incurs an obligation to deliver economic value directly back to the contributor, this is considered a reciprocal transaction and the grant revenue is recognised in the statement of financial position as a liability until the service has been delivered to the contributor, otherwise the grant is recognised as income on receipt.

The Company receives non-reciprocal contributions of assets from the government and other parties for zero or a nominal value. These assets are recognised at fair value on the date of acquisition in the statement of financial position, with a corresponding amount of income recognised in the statement of profit or loss and other comprehensive income.

Donations/Bequests

Donations and bequests are recognised as revenue when received.

Interest revenue

Interest is recognised using the effective interest method.

Rendering of services

Revenue in relation to rendering of services is recognised depends on whether the outcome of the services can be measured reliably. If this is the case then the stage of completion of the services is used to determine the appropriate level of revenue to be recognised in the period.

If the outcome cannot be reliably measured then revenue is recognised to the extent of expenses recognised that are recoverable.

Rental income

Investment property revenue is recognised on a straight-line basis over a period of the lease term so as to reflect a constant periodic rate of return on the net investment.

(l) Comparative Amounts

Comparatives are consistent with prior years, unless otherwise stated.

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(m) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not an incremental cost relating to the actual draw-down of the facility, are recognised as prepayments and amortised on a straight-line basis over the term of the facility.

Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in other income or other expenses.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date and does not expect to settle the liability for at least 12 months after the reporting date.

(n) Economic dependence

Banyule Community Health is dependent on grant funding, the majority of which came from State, Federal and local sources to operate the business. At the date of this report the directors have no reason to believe these sources of grant funding will not continue to support Banyule Community Health.

(o) Critical accounting estimates and judgments

The directors make estimates and judgements during the preparation of these financial statements regarding assumptions about current and future events affecting transactions and balances.

These estimates and judgements are based on the best information available at the time of preparing the financial statements, however as additional information is known then the actual results may differ from the estimates.

The significant estimates and judgements made have been described below.

Key estimates - impairment

The Company assesses impairment at the end of each reporting year by evaluating conditions specific to the Company that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions.

(p) Intangible Assets

Software

Software is recorded at cost. Software has a finite life and is carried at cost less any accumulated amortisation and impairment losses.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. Software is amortised at a rate of 20% per annum.

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(p) Intangible Assets (continued)

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(q) Adoption of new and revised accounting standards

During the current year, the following standards became mandatory and have been adopted retrospectively by the Company:

� AASB 13 Fair Value Measurement

� AASB 119 Employee Benefits

The accounting policies have been updated to reflect changes in the recognition and measurement of assets, liabilities, income and expenses and the impact of adoption of these standards is discussed below.

AASB 13 Fair Value Measurement does not change what and when assets or liabilities are recorded at fair value. It provides guidance on how to measure assets and liabilities at fair value, including the concept of highest and best use for non-financial assets. AASB 13 has not changed the fair value measurement basis for any assets or liabilities held at fair value, however, where necessary, additional disclosures on the methodology and fair value hierarchy have been included in the financial statements. As none of the Company's assets and liabilities are recorded at fair value subsequent to initial recognition, the impact of AASB 13 was insignificant.

AASB 119 Employee benefits changes the basis for determining the income or expense relating to defined benefit plans and introduces revised definitions for short-term employee benefits and termination benefits.

The Company reviewed the annual leave liability to determine the level of annual leave which is expected to be paid more than 12 months after the end of the reporting period. Whilst this has been considered to be a long-term employee benefits for the purpose of measuring the leave under AASB 119, the effect of discounting was not considered to be material and therefore has not been performed.

In accordance with the transition provisions in the standard, the comparative figures have been restated.




(r) New Accounting Standards and Interpretations

The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The Company has decided against early adoption of these Standards . The following table summarises those future requirements, and their impact on the Company:

Standard Name Effective date for entity Requirements Impact

AASB 9 Financial Instruments AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2009) AASB 2012-6 Amendments to Australian Accounting Standards - Mandatory Effective Date of AASB 9 and Transitional Disclosures AASB 2013-9 Amendments to Australian Accounting Standards - Conceptual Framework, Materiality and Financial Instruments

30 June 2019 Significant revisions to the classification and measurement of financial assets, reducing the number of categories and simplifying the measurement choices, including the removal of impairment testing of assets measured at fair value. The amortised cost model is available for debt assets meeting both business model and cash flow characteristics tests. All investments in equity instruments using AASB 9 are to be measured at fair value. Amends measurement rules for financial liabilities that the entity elects to measure at fair value through profit and loss. Changes in fair value attributable to changes in the entity’s own credit risk are presented in other comprehensive income. AASB 2013-9 also permits an entity to elect to apply the own credit risk provisions without applying the other requirements in AASB 9 (2010). If an entity does so, it is required to disclose that fact and provide the disclosures in paragraphs 10-11 of AASB 7 concerning financial liabilities designated at fair value.

The impact of AASB 9 has not yet been determined.

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2 Remuneration of Auditors

2014 $

2013 $

Remuneration of the auditor of the Company, HLB Mann Judd, for: - auditing or reviewing the financial report 11,600 11,400 - other services 4,350 4,265

Total remuneration of auditor 15,950 15,665

3 Revenue and Other Income

Revenue from continuing operations

Note 2014

$ 2013

$ Patient fees 1,912,056 1,639,205 Interest 3(a) 84,087 101,762 Rent 124,377 86,150 Government grants 11,425,303 10,526,045 Donations 28,430 27,997 Other revenue 363,071 352,498

Total Revenue

13,937,324 12,733,657

(a) Interest Revenue

2014 $

2013 $

Interest revenue from:

- financial institutions 84,087 101,762

4 Surplus/(Loss) from Operations

(a) Expenses

2014 $

2013 $

Depreciation and Amortisation Depreciation - plant and equipment 189,660 218,391 Amortisation - intangible assets 5,016 5,016

Total Depreciation and Amortisation 194,676 223,407 Write-down to recoverable amount - 2,654

Finance Costs - financial institutions 7,168 9,296 Client programs & medical expenses 1,297,649 812,551 Loss on disposal of property, plant and equipment 30,187 30,552

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5 Cash and cash equivalents

2014 $

2013 $

Cash on hand 1,610 1,540 Cash at bank 715,192 271,625 Deposits at call 2,826,027 2,947,631

Total cash and cash equivalents

3,542,829 3,220,796

6 Trade and other receivables

2014 $

2013 $

CURRENT

Trade receivables 251,187 304,223

Total current trade and other receivables

251,187 304,223

(a) Provision for Impairment of receivables

Current trade receivables are generally on 30 day terms. These receivables are assessed for recoverability and a provision for impairment is recognised when there is objective evidence that an individual trade receivable is impaired. There was no provision for impairment raised as at 30 June 2013 and 30 June 2014.

The carrying value of trade receivables is considered a reasonable approximation of fair value due to the short-term nature of the balances.

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable in the financial statements.

7 Other assets

2014 $

2013 $

CURRENT Prepayments 11,261 17,241 Other current assets 26,297 7,875

Total current other assets 37,558 25,116

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8 Property, plant and equipment

2014 $

2013 $

LAND AND BUILDINGS At cost 1,946,022 1,346,800 Accumulated depreciation (447,873) (383,300) Total land and buildings 1,498,149 963,500

PLANT AND EQUIPMENT

Works in progress - Leasehold Improvements At cost - 218,169

Plant and equipment At cost 277,642 260,289 Accumulated depreciation (73,868) (107,489)

Total plant and equipment 203,774 152,800

Furniture, fixture and fittings At cost 338,862 307,893 Accumulated depreciation (185,192) (163,415)

Total furniture, fixture and fittings 153,670 144,478

Motor vehicles At cost 163,822 313,570 Under lease 47,398 - Accumulated depreciation (38,211) (67,710)

Total motor vehicles 173,009 245,860

Computer equipment At cost 120,482 97,512 Accumulated depreciation (60,235) (46,017)

Total computer equipment 60,247 51,495

Total plant and equipment 590,700 812,802

Total property, plant and equipment 2,088,849 1,776,302

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Ban

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Mov

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Impr

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Land

and

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$

Plan

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Furn

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9 Intangible Assets

2014 $

2013 $

Other intangibles Cost 25,078 25,078 Accumulated amortisation and impairment (10,032) (5,016)

Net carrying value 15,046 20,062

Total Intangibles 15,046 20,062

Other Intangibles

$ Total

$

Year ended 30 June 2014 Balance at the beginning of the year 20,062 20,062 Additions - - Disposals - - Amortisation (5,016) (5,016)

Closing value at 30 June 2014 15,046 15,046

10 Trade and other payables

2014 $

2013 $

CURRENT

Unsecured liabilities Trade payables 151,366 360,755 Sundry payables and accrued expenses 763,369 932,073

Total current trade and other payables 914,735 1,292,828

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11 Borrowings

2014 $

2013 $

CURRENT

Secured liabilities

Lease liability secured 11(a) 12,364 - Mortgage loans 11(b) - 38,396

Total current borrowings

12,364 38,396

2014 $

2013 $

NON-CURRENT

Secured liabilities

Lease liability secured 11(a) 30,805 -

Total non-current borrowings

30,805 -

(a) Leased Liabilities

Leased liabilities are secured by the underlying leased assets.

(b) Mortgage loans

The loan is held with the Treasury Corporation of Victoria and has the following terms:

- Funds Borrowed: $585,000

- Type: Annuity Loan

- Repayment Frequency: Quarterly

- Interest Rate: 6.0930%

- Maturity Date: 17/12/2013

The borrowings are not directly secured by assets of the Company but have the benefit of being unconditionally and irrevocably guaranteed by the Government of Victoria pursuant to an agreement dated 18 December 2002.

The borrowings are in Australian dollars and accordingly the Company does not face any foreign exchange risk in relation to this balance.

The fair value of the loan was $Nil as at 30 June 2014 (2013: $38,396).

(c) Defaults and breaches

During the current and prior year, there were no defaults or breaches on any of the loans.

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12 Employee benefits

2014 $

2013 $

CURRENT Long service leave 754,858 715,172 Annual leave 666,755 604,548

Total current employee benefits 1,421,613 1,319,720

2014 $

2013 $

NON-CURRENT Long service leave 655,994 594,351

13 Other liabilities

2014 $

2013 $

CURRENT Grants received in advance 602,183 355,496

Total current other liabilities 602,183 355,496

14 Retained Earnings

2014 $

2013 $

Retained earnings at the beginning of the financial year 1,745,708 1,434,637 Net surplus (loss) for the year 552,067 311,071

Retained earnings at end of the financial year 2,297,775 1,745,708

15 Cash Flow Information

(a) Reconciliation of cash

Note 2014

$ 2013

$ Cash and cash equivalents at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows:

Cash and cash equivalents 5 3,542,829 3,220,796

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15 Cash Flow Information (continued)

(b) Reconciliation of result for the year to cashflows from operating activities

2014

$ 2013

$ Surplus/(loss) from operating activities after income tax 552,067 311,071 Non-cash flows in surplus/(loss):

- amortisation 5,016 5,016 - depreciation 189,660 218,391 Loss on Sale of Asset 30,187 29,903

Changes in assets and liabilities: - (increase)/decrease in trade and other receivables 53,036 (30,413) - (increase)/decrease in other assets (12,442) 5,967 - increase/(decrease) in trade and other payables (378,093) 486,570 - increase/(decrease) in grants received in advance 246,687 (114,893) - increase/(decrease) in employee benefits 163,536 52,424

Cashflow from operations 849,654 964,036

16 Key Management Personnel Disclosures

The total remuneration paid to key management personnel of the Company is $ 528,835 (2013: $ 557,615).

Directors are not paid any remuneration; rather they are reimbursed for costs incurred in discharging their duties as directors. No services were rendered to the Company during the year (2013: Nil) by the Directors and/or their related parties (an entity in which the Director is a member/shareholder/director, or with a company in which the Director has a substantial financial interest).

In the current year there was a change to a key management personnel.

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17 Financial Risk Management

The Company's financial instruments consist mainly of deposits with banks, short term investments, accounts receivable and payable, and interest bearing liabilities.

The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:

Note 2014

$ 2013

$

Financial Assets Cash and cash equivalents 5 3,542,829 3,220,796 Trade and other receivables 6 251,187 304,223

Total financial assets 3,794,016 3,525,019

Financial Liabilities Financial liabilities at amortised cost

- Trade and other payables 10 (914,735) (1,292,828) - Borrowings 11 (43,169) (38,396)

Total financial liabilities (957,904) (1,331,224)

None of the Company's financial instruments are recorded at fair value subsequent to initial recognition.

18 Capital and Leasing Commitments

(a) Operating Lease Expense

2014 $

2013 $

Minimum lease payments under non-cancellable operating leases:

- not later than one year 165,837 104,311 - later than one year and not later than five years 86,728 30,023 - later than five years 468 5,740

Total operating lease commitments - payments 253,033 140,074

The Company is party to a number of operating leases in respect of premises and motor vehicles. Increases in property lease commitments may occur in line with CPI. They all have varying terms and conditions.

(b) Operating Lease Income

2014 $

2013 $

Minimum lease receipts under non-cancellable operating leases: - not later than one year 98,372 111,178 - between one year and five years 80,530 64,580

Total operating lease commitments - receipts 178,902 175,758

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(c) Finance Leases

2014 $

2013 $

Minimum lease payments: - not later than one year 15,603 - - between one year and five years 32,802 - Minimum lease payments

48,405 - Less: finance changes (5,236) - Present value of minimum lease payments

43,169 -

Finance lease relates to a leased motor vehicle as disclosed in Note 8. The lease concludes on 26 May 2016 with a purchase option.

(d) Contracted Commitments

2014 $

2013 $

Capital expenditure commitments contracted for: Capital expenditure projects - 381,569

Total capital expenditure commitments - 381,569

The Company commenced building an extension on the back of the West Heidelberg premises. The above amount represents the amount of capital expenditure committed to at 30 June 2013. The project was completed in the 2013/14 financial year.

19 Members' Guarantee

The Company is incorporated under the Corporations Act 2001 and is a Company limited by guarantee. If the Company is wound up, the constitution states that each member is required to contribute a maximum of $ 1 each towards meeting any outstandings and obligations of the Company. At 30 June 2014 the number of members was 646 (2013: 637).

20 Events Occurring After the Reporting Date

The financial report was authorised for issue on 25 September 2014 by the Board of Directors.

On the 26th of June 2014, the Board executed the amalgamation deed which gave effect for the West Heidelberg Legal Services become a part of Banyule Community Health, effective 1 July 2014. Post 1 July 2014, the Company has started to integrate the services of West Heidelberg Legal Services.

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years.

21 Contingencies

In the opinion of the Directors, the Company did not have any contingencies at 30 June 2014 (30 June 2013:None).

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Independent Audit Report to the members of Banyule Community Health

34

22 Company Details The registered office of the Company is:

Banyule Community Health 21 Alamein Road West Heidelberg Victoria 3081

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West Heidelberg: Greensborough:

Email: [email protected]

Web: www.bchs.org.au

Banyule Community Health

ACN 135 660 454

ABN 87 776 964 889

21 Alamein Road,

West Heidelberg,

Victoria 3081

Tel: 03 9450 2000

Fax: 03 9459 5808

Pauline Toner Centre,

3/25 Grimshaw Street,

Greensborough,

Victoria 3088

Tel: 03 9433 5111

Fax: 03 9435 8922

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