communicare inc....communicare inc. abn 27 768 389 307 statement of profit or loss and other...

Communicare Inc.Special Purpose Financial Report

For the year ended 30 June 2013ABN 27 768 389 307

ContentsCommittee's Report 2 Auditor's Report 3 Statement of Profit or Loss and Other Comprehensive Income 5 Statement of Financial Position 6 Statement of Changes in Equity 7 Statement of Cash Flows 8 Notes to the Financial Statements 9 Statement by Members of the Committee 17

Communicare Inc. ABN 27 768 389 307Page 1

Committee’s Report

Page 2Communicare Inc.ABN 27 768 389 307

Communicare Inc. ABN 27 768 389 307

Auditor’s Report

Page 3

Communicare Inc. ABN 27 768 389 307 Page 4


Statement of Profit or Loss and Other Comprehensive Income

Page 5

For the year ended 30 June 2013

Note 2013 2012 $ $Revenue 2 21,570,318 20,866,139 Other income 2 48,367 39,724 Employee benefits expense (15,821,811) (15,130,631)Benefit Payments (1,185,981) - Depreciation expense (543,098) (378,050)Repair, maintenance and vehicle running expenses (925,656) (1,295,705)Fuel, light and power expense (473,414) (441,423)Rental expense 3 (793,395) (545,148)Staff training expenses 17 (251,943) (253,267)Audit, legal and consultancy expense (414,680) (234,251)Administrative expense (1,483,967) (1,537,575)Insurance expense (430,010) (237,346)Travel expense (191,546) (327,407)Marketing expense (54,728) (54,018)Other expenses (57,985) (76,419)(Deficit)/Surplus for the year (1,009,529) 394,623 Other comprehensive income Items that will not be reclassified to profit or loss Revaluation of property, plant and equipment - 372,273 Total comprehensive income for the year (1,009,529) 766,896 The accompanying notes form part of the financial statements.

Statement of Financial PositionAs at 30 June 2013

Page 6Communicare Inc. ABN 27 768 389 307

Note 2013 2012 $ $ASSETS CURRENT ASSETS Cash and cash equivalents 4 9,852,738 10,476,273 Trade and other receivables 5 2,207,377 2,270,717 Other assets 6 - 143,704 12,060,115 12,890,694 Assets casified as held for sale 10 550,000 - TOTAL CURRENT ASSETS 12,610,115 12,890,694 NON-CURRENT ASSETS Property, plant and equipment 7 11,389,356 10,942,290 TOTAL NON-CURRENT ASSETS 11,389,356 10,942,290 TOTAL ASSETS 23,999,471 23,832,984 LIABILITIES CURRENT LIABILITIES Bank overdraft 4 55,856 45,897 Trade and other payables 9 4,189,696 3,253,317 Provisions 10 1,623,313 1,386,992 TOTAL CURRENT LIABILITIES 5,868,865 4,686,206 NON-CURRENT LIABILITIES Provisions 10 98,737 105,380 TOTAL NON-CURRENT LIABILITIES 98,737 105,380 TOTAL LIABILITIES 5,967,602 4,791,586 NET ASSETS 18,031,869 19,041,398 EQUITY Retained earnings 15,805,469 16,814,998 Reserves 2,226,400 2,226,400 TOTAL EQUITY 18,031,869 19,041,398

The accompanying notes form part of the financial statements.


Statement of Changes in Equity

Page 7

For the year ended 30 June 2013

Retained Asset Total Earnings Revaluation Reserve $ $ $ Balance at 1 July 2011 16,420,375 1,854,127 18,274,502 (Deficit)/Surplus for the year 394,623 - 394,623 Revaluation of property, plant and equipment - 372,273 372,273 Balance at 30 June 2012 16,814,998 2,226,400 19,041,398 Balance at 1 July 2012 16,814,998 2,226,400 19,041,398 (Deficit)/Surplus for the year (1,009,529) - (1,009,529)Balance at 30 June 2013 15,805,469 2,226,400 18,031,869 The accompanying notes form part of the financial statements.

Statement of Cash FlowsFor the year ended 30 June 2013


Note 2013 2012 $ $ CASH FLOWS FROM OPERATING ACTIVITIES Receipts from governments, customers and donors 22,359,659 19,875,769 Payments to suppliers and employees (21,751,926) (19,706,829)Interest received 356,921 558,912 Net cash provided by operating activities 13 964,654 727,852 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment 590,950 - Payment for property, plant and equipment (2,189,098) (1,188,401)Net cash provided by / (used in) investing activities (1,598,148) (1,188,401) Net increase / (decrease) in cash held (633,494) (460,549) Cash and cash equivalents at beginning of the year 10,430,376 10,890,925 Cash and cash equivalents at the end of the year 4 9,796,882 10,430,376 The accompanying notes form part of the financial statements.


Notes to the Financial Statements

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1. Summary of Significant Accounting Policies

The directors have prepared the financial statements on the basis that the Association is a non-reporting entity because there are no users who are dependent on its general purpose financial reports. This financial report is therefore a special purpose financial report that has been prepared in order to meet the requirements of the Associations Incorporation WA Act (1987) and the needs of the members. The financial report has been prepared in accordance with the significant accounting policies disclosed below, which the directors have determined are appropriate to meet the needs of members. Such accounting policies are consistent with those of the previous period unless stated otherwise. The financial statements have been prepared on an accruals basis and are based on historical costs unless otherwise stated in the notes. The accounting policies that have been adopted in the preparation of this report are as follows: Accounting Policies (a) Revenue Grant revenue is recognised in the statement of profit or loss and other comprehensive income when the Association obtains control of the grant and it is probable that the economic benefits gained from the grant will flow to the Association and the amount of the grant can be measured reliably. When grant revenue is received whereby the Association 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 Association receives non-reciprocal contributions of assets from Federal and State Governments and other parties for zero or a nominal value. These assets are recognised at fair value on the date of receipt 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 and bequests are recognised as revenue when received. Interest revenue is recognised using the effective interest rate method, which for floating rate financial assets is the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established. Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.



(b) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value as indicated, less, where applicable, accumulated depreciation and impairment losses. Land and Buildings The carrying value of land and buildings reported at fair value are based on periodic, valuations by external independent valuers, less subsequent depreciation for buildings. In periods when the freehold land and buildings are not subject to an independent valuation, the directors conduct directors’ valuations to ensure the carrying amount for the land and buildings is not materially different to the fair value. Increases in the carrying amount arising on revaluation of land and buildings are recognised in other comprehensive income and accumulated in the revaluation surplus in equity. Revaluation decreases that offset previous increases of the same class of assets shall be recognised in other comprehensive income under the heading of revaluation surplus. All other decreases are recognised in statement of comprehensive income. Any accumulated depreciation at the date of the revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Freehold land and buildings that have been contributed at no cost or for nominal cost are recognised at the fair value of the asset at the date it is acquired. Plant and Equipment Plant and equipment is measured on the cost basis and is therefore carried at cost less accumulated depreciation and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than its estimated recoverable amount, the carrying amount is written down immediately to its estimated recoverable amount. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(d) for details of impairment). Plant and equipment that have been contributed at no cost, or for nominal cost are recognised at the fair value of the asset at the date it is acquired. Depreciation The depreciable amount of all fixed assets, including buildings and capitalised lease assets but excluding freehold land, is depreciated on a straight-line basis over the asset's useful life to the Association commencing from the time the asset is available for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Buildings 1.5% Motor Vehicles 15% Plant and equipment 20% The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.



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(c) Leases Leases of property, plant and equipment, where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to the entity are classified as finance leases. Finance leases are capitalised, recognising an asset and a liability equal to the present value of the minimum lease payments, including any guaranteed residual values. Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the Association will obtain ownership of the asset. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses on a straight-line basis over the lease term. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the lease term. (d) Impairment (i) Financial Assets A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available for sale financial asset is calculated by reference to its fair value. Financial assets are tested for impairment on an individual basis. All impairment losses are recognised in profit or loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in profit or loss. (ii) Non-financial Assets The carrying amounts of the Association’s non financial assets, other than inventories, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the future economic benefits of an asset are not primarily dependent on the asset’s ability to generate net cash inflows and where the Association would, if deprived of the asset, replace its remaining future economic benefits, value in use shall be determined as the depreciated replacement cost of the asset. Depreciated replacement cost is defined as the current replacement cost of an asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset. The current replacement cost of an asset is its cost measured by reference to the lowest cost at which the gross future economic benefits of that asset could currently be obtained in the normal course of business. An impairment loss is recognised if the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss.



(d) Impairment (continued) (ii) Non-financial Assets (continued) Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to deter mine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (e) Employee Benefits Provision is made for the Association's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may not satisfy vesting requirements. Those cash outflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows. Contributions are made by the Association to an employee superannuation fund and are charged as expenses when incurred. (f) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at-call with banks, other short-term highly liquid investments with original maturities of six months or less, and bank overdrafts. Bank overdrafts are shown within short- term borrowings in current liabilities on the statement of financial position. (g) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financial activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. h) Income Tax No provision for income tax has been raised as the Association is exempt from income tax under Division 50 of the Income Tax Assessment Act 1997. (i) Provisions Provisions are recognised when the Association has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions recognised represent the best estimate of the amounts required to settle the obligation at the end of reporting period. (j) Critical Accounting Estimates and Judgments The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Association.



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(j) Critical Accounting Estimates and Judgments (continued) Key Estimates Fair value of Land and Buildings The freehold land and buildings basis independently valued at 30 June 2012. The valuation was based on the fair value less cost to sell. The directors have done a directors valuation of the 30 June 2013 valuations. The critical assumptions adopted in determining the valuation included the location of the land and buildings, the demand for land and buildings in the area and recent sales data for similar properties. Provision for employee benefits Provisions for employee benefits payable after 12 months from the reporting date are based on future wage and salary levels, experience of employee departures and period of service, as discussed in Note 1(e). The amount of these provisions would change should any of these factors change in the next 12 months. (k) New Accounting Standards for Application in Future Periods A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2013, and have not been applied in preparing this special purpose financial report. None of these is expected to have a significant effect on the financial report, except for AASB 13 Fair Value Measurement, which be comes mandatory for the financial year ending 30 June 2014. AASB 13 does not affect when fair value is used, it only describes how to measure fair value. The new standard will provide a single framework for measurement of fair value whilst enhancing the disclosures when fair value is applied. The new standard on fair value measurement of a non- financial asset takes into account a participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. This standard is expected to have a direct impact on the Association, as the Association carries land and buildings at fair value. The Association is currently considering the impact of this standard. 2. Revenue and Other Income 2013 2012 $ $ Revenue from government grants and other grants — State/federal government grants 7,027,616 7,391,368 — Other government grants - - — Fee for Service Activities 14,185,781 12,872,668 21,213,397 20,264,036 Other revenue — Interest earned on investments in government and fixed interest securities 356,921 602,103 356,921 602,103 Total Revenue 21,570,318 20,866,139 Other Income — Charitable income and fundrasing 48,367 39,724 Total Other Income 48,367 39,724 Total Revenue and Other Income 21,618,685 20,905,863



3. (Deficit)/Surplus for the year 2013 2012 $ $a) Expenses Loss on disposal of non-current assets 57,984 76,419 57,984 76,419 Rental expense on operating leases 793,395 545,148 Total Rental Expense 793,395 545,148 Audit Remuneration — audit services 37,300 27,000 Total Audit Remuneration 37,300 27,000 4. Cash and Cash Equivalents 2013 2012 $ $ CURRENT Cash at bank 9,852,738 10,476,273 Total cash and cash equivalents 9,852,738 10,476,273 Bank Overdraft (55,856) (45,897) Total cash and cash equivalents as stated in the statement of cash flows 9,796,882 10,430,376 5. Trade and Other Receivables 2013 2012 $ $ CURRENT Trade receivables 2,048,946 2,112,286 Other receivables 158,431 158,431 2,207,377 2,270,717 6. Other Assets 2013 2012 $ $ CURRENT Prepayments - 143,704 - 143,704



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7. Property, Plant and Equipment 2013 2012 $ $ LAND AND BUILDINGS At valuation 10,645,703 9,340,000 Less accumulated depreciation (190,913) - Total land and buildings 10,454,790 9,340,000 PLANT AND EQUIPMENT Plant and equipment At cost 1,364,326 1,301,733 Less accumulated depreciation (1,052,185) (923,535) 312,141 378,198 Motor Vehicles At cost 1,754,382 1,700,080 Less accumulated deprectiation (581,957) (475,988) 1,172,425 1,224,092 Total plant and equipment 1,484,566 1,602,290 Total property, plant and equipment 11,939,356 10,942,290 8. Assets classified as held for sale 2013 2012 $ $ Freehold land held for sale 550,000 - 550,000 - Liabilities associated with assets held for sale - - The organisation intends to dispose of freehold land it no longer utilises within 10 months of the balance sheet date. The property was previously in a service delivery capacity. 9. Trade and Other Payables 2013 2012 $ $ CURRENT Trade payables 2,171,632 2,298,107 Unexpended Grants 304,027 275,728 Funding in Advance 1,714,037 679,482 4,189,696 3,253,317 10. Provisions 2013 $ Balance at 1 July 2012 1,492,372 Provisions made during the year 541,109 Provisions reversed duing the year (311,431) Balance at 30 June 2013 1,722,050 Non-Current 98,737 Current 1,623,313 1,722,050



11. Capital and Leasing Commitments a) Operating Lease Commitments Non-cancellable operating leases contracted for but not recognised in the financial statements 2013 2012 $ $ Payable - minimum lease payments — not later than 12 months 2,158,427 1,004,692 — later than 12 month but not later than 5 years 1,079,214 722,603 — greater than 5 years - - 3,237,641 1,727,295 The property lease commitments are non-cancellable operating leases contracted for but not recognised in the financial statements with a five-year term. Incease in lease commitments may occur in line with the Consumer Price Index (CPI). 12. Events After the Reporting Period There have been no matters or circumstances that have arisen since 30 June 2012 that have or may significantly affected the operations, results, or state of affairs of the Association in future financial period. 13. Cash Flow Information Reconcilliation of Cashflow from Operations with (Deficit)/Surplus for the year 2013 2012 $ $ Surplus for the year Non cash flows (1,009,529) 394,623 Depreciation and amortisation 543,098 378,050 Loss on disposal of property, plant and equipment 57,984 76,419 Changes in assets and liabilities: (Increase)/Decrease in trade and other receivables 63,340 (430,738) (Increase)/Decrease in other assets 143,704 (143,704) Increase/(Decrease) in trade and other payables 936,379 519,546 Increase/(Decrease) in provisions 229,678 (66,344) Net cash provided by operating activities 964,654 727,852


Statement by Members of the Committee

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Communicare Inc.28 Cecil Avenue Cannington W.A. 6107 • (08) 9251 5777www.communicare.org.au • [email protected]

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