Annual Financial Report 30 June 2015 - …daduuoeqyq3fg.cloudfront.net/2016/08/18132202/Northcott-Annual... · Annual Financial Report 30 June 2015 The Northcott Society (A company

Annual Financial Report 30 June 2015

The Northcott Society (A company limited

by guarantee) and its controlled entities

ABN 87 302 064 152

ContentsDirectors’ report ........................................................................................................................................................................... 21. Directors ........................................................................................................................................................................................................... 22. Company secretary ....................................................................................................................................................................................... 33. Director’s meetings ...................................................................................................................................................................................... 44. Principal activities, objectives and strategies ................................................................................................................................... 45. Operatingandfinancialreview ............................................................................................................................................................... 66. Events subsequent to reporting date ................................................................................................................................................... 67. Likely developments .................................................................................................................................................................................... 68. Environmental regulation ......................................................................................................................................................................... 69. Indemnificationandinsuranceofofficers ......................................................................................................................................... 610. Members guarantee ..................................................................................................................................................................................... 711. Lead auditor’s independence declaration .......................................................................................................................................... 7

Statements of profit or loss and other comprehensive income .................................................................................... 8

Statements of changes in equity .............................................................................................................................................. 9

Statements of financial position ............................................................................................................................................10

Statements of cash flows ..........................................................................................................................................................11

Notes to the consolidated financial statements ................................................................................................................121. Reporting entity ...........................................................................................................................................................................................122. Changes in accounting policies .............................................................................................................................................................123. Significantaccountingpolicies ..............................................................................................................................................................124. Determinationoffairvalues ...................................................................................................................................................................195. Expenses .........................................................................................................................................................................................................206. Netfinancingincome .................................................................................................................................................................................207. Cash and cash equivalents .......................................................................................................................................................................208. Trade and other receivables ...................................................................................................................................................................219. Inventories .....................................................................................................................................................................................................2110. Otherfinancialassets ................................................................................................................................................................................2111. Other assets ...................................................................................................................................................................................................2112. Equity accounted investees ....................................................................................................................................................................2113. Property, plant and equipment .............................................................................................................................................................2214. Intangible assets ..........................................................................................................................................................................................2315. Trade and other payables ........................................................................................................................................................................2416. Employeebenefits ......................................................................................................................................................................................2417. Other liabilities.............................................................................................................................................................................................2418. Capital and reserves ...................................................................................................................................................................................2419. Operating leases ..........................................................................................................................................................................................2520. Consolidated entities .................................................................................................................................................................................2521. Key management personnel disclosures ..........................................................................................................................................2622. Segment reporting ......................................................................................................................................................................................2623. Subsequent events ......................................................................................................................................................................................2624. Fundraisingappealsconductedduringthefinancialyear ........................................................................................................27

Declaration by Chief Executive Officer in respect of fundraising appeals ...............................................................28

Directors’ declaration ...............................................................................................................................................................29

Independent auditor’s report ................................................................................................................................................30

Lead auditor’s independence declaration ..........................................................................................................................33

The Northcott Society and its controlled entities Directors’ report For the year ended 30 June 2015 The directors present their report together with the financial report of The Northcott Society (“the Society”) and of the Group, being The Society and its controlled entities, for the year ended 30 June 2015 and the auditor’s report thereon.

1 Directors

The directors of the Society at any time during or since the end of the financial year are:

Name and qualifications Experience, special responsibilities and other directorships Mr. Michael Briggs B Comm, ACA, AGIA, MBA Chairman

Appointed 27 March 2003 Chairman, The Northcott Society Member, Finance and Properties Committee Member, Nomination Committee Member, Remuneration Committee Director, Northcott Innovation Limited Business Advisor and Investor Chairman, Antec Engineering Pty Limited Director, SCECGS Redlands Limited Member, Advisory Board, Anytime Fitness Group Member, Advisory Board, Guided Knowledge Pty Ltd

Mr. Tony Abrahams B Com (Hons) LLB MPhil (Econ) MBA MAICD

Appointed 21 September 2010 Member, Nomination Committee Member, Remuneration Committee Co-founder and CEO, Access Innovation Media (Ai-Media) Member, Australian Institute of Company Directors Rhodes Scholar Young Global Leader of the World Economic Forum – 2013

Ms. Kirsten Armstrong M.Ec, M.PH, FIAA

Appointed 7 January 2013 Member, Finance and Properties Committee Global Lead, Development Effectiveness - The Fred Hollows Foundation Director, Three Rivers Consulting Director, South Eastern Sydney Medicare Local Fellow, Institute of Actuaries of Australia Member of the International Health Economics Association

Mr. Richard Blaiklock B Comm, MBA

Appointed 19 November 2003 Chair, Nomination Committee Chair, Remuneration Committee Chairman, Baresque Australia Pty Ltd group and affiliated companies

Mr. Nick Cardno MA (Hons) CA MAICD

Appointed 7 February 2013 Chair, Finance and Properties Committee Partner, Ernst & Young Director, Ernst & Young Transaction Advisory Services Ltd Member, Institute of Chartered Accountants (Scotland) Member, Institute of Chartered Accountants (Australia) Member, Australian Institute of Company Directors

Dr. Christopher Janssen MB BS (Sydney), MBA (IMD), FAICD

Appointed 27 November 1986 Member, Finance and Properties Committee Founder and Managing Director, GPC Electronics Pty Limited and affiliated companies Director, The Warren Centre for Advanced Engineering Ltd Member, Advisory Board, Centor Holdings Pty Limited Warden, St Andrew’s Anglican Church, Wahroonga Registered (non-practising) Medical Practitioner Fellow of the Australian Institute of Company Directors

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The Northcott Society and its controlled entities Directors’ report (continued) For the year ended 30 June 2015

1 Directors (continued) Name and qualifications Experience, special responsibilities and other directorships Mr. Jeyan Jeevaratnam B Eng (Hons 1), MBA, M Eng Sc, MAICD

Appointed 3 May 2012 Chief Growth Officer, Avanade APAC Director, of AIIA (Australian Information Industry Association) Member, Australian Institute of Company Directors Member, World Presidents Organisation (WPO)

Mr. Andrew Mansour B Ec LLB (Hons)

Appointed 30 August 2010 Partner, Energy, Resources and Infrastructure Group, Allens

Ms. Debra Richards BA (Lib Studies), Graduate Diploma (Arts), MA, MAICD

Appointed 1 December 2012 CEO, Ausfilm (International Inc) Director, Communications & Media Law Association Director, International Institute of Communications Deputy Chief Adjudicator, Alcohol Beverages Advertising Code Adjudication Panel Member, Australian Institute of Company Directors

Dr. Rob Silberstein LLB (Hons 1) MHL MMB BS MIP GDipLegPrac, FIPTA

Appointed 1 April 2009 Founding Principal, Silberstein & Associates Chairman, Mobility 2000 (Australia) Limited Director, Northcott Innovation Limited

Ms. Kerry Stubbs Managing Director and Chief Executive Officer BA (Hons), MA (Hons), Grad Cert Writing, MAICD

Appointed 27 February 2008 Member, Finance and Properties Committee Member, Nomination Committee Member, Remuneration Committee Telstra Business Women’s Awards – 2007 NSW IBM Community & Government Award Winner Director, The SpineCare Foundation Ltd Director, the CRC for Water for Sensitive Cities Director, Northcott Innovation Limited Director, AsOne Therapy Limited Chair, National Accreditation Authority for Translators and Interpreters Ltd Member, Finance and Investment Committee, University of Western Sydney Board of Trustees

Mr. John Surian BA (Econ), G.DipAppFin (Sec Inst), F Fin

Appointed 14 December 2000 Member, Finance and Properties Committee Licensee and Principal, Raine & Horne, Parramatta and Raine and Horne Commercial, Parramatta

In accordance with the Society’s Constitution, one third of the directors retire from the Board of directors at the forthcoming Annual General Meeting of members and being eligible, offer themselves for re-election.

2 Company secretary

Mr LJ Carpenter (ACMA, Grad Cert Bus Admin, CPA, MBA, MAICD, CGMA) was appointed to the position of company secretary in May 2008. Mr Carpenter is the Chief Operating Officer of the Northcott Society and also a Director of SpineCare Foundation and Northcott Innovation Limited.

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3 Directors’ meetings

The number of directors’ meetings and number of meetings attended by each of the directors of Northcott during the financial year are:

Director Board Meetings Finance and Properties Committee Meetings

Nomination Committee Meetings

Remuneration Committee

Attended Held* Attended Held* Attended Held* Attended Held* Mr R Blaiklock 7 7 - - 2 2 2 2 Mr M Briggs 6 7 5 5 2 2 2 2 Dr C Janssen 7 7 5 5 - - - - Mr J Surian 7 7 4 5 - - - - Mr A Abrahams 6 7 - - 2 2 2 2 Ms K Stubbs 6 7 4 5 2 2 1 2 Mr A Mansour 5 7 - - - - - - Dr R Silberstein 7 7 - - - - - - Ms K Armstrong 7 7 5 5 - - - - Mr N Cardno 5 7 5 5 - - - - Mr J Jeevaratnam 7 7 - - - - - - Ms D Richards 6 7 - - - - - -

* Number of meetings held during the time the director held office during the period

4 Principal activities, objectives and strategies

The principal activities of the consolidated entity during the course of the financial year were the provision of individual and family support, respite, recreation and leisure programs, day programs, accommodation, employment, equipment and technology, specialist services and therapy services to people with disabilities in New South Wales and the Australian Capital Territory.

There were no significant changes in the nature of the activities of the Group during the year.

The Society's long-term objective:

The Society's long-term objective is to help build an inclusive society where people can live the life they choose. We do this in partnership with our clients and stakeholders to ensure we provide services that are professional, client-focused and designed to assist people with disabilities and their communities achieve their goals and aspirations.

In order to ensure we meet the long-term objectives, the Society will:

• Be innovative in our service delivery, to ensure service provision best meets the needs of our clients. • Develop a recognised and respected brand to attract and retain clients and supporters. • Strive to become a provider of choice for both current and prospective clients. • Grow our services in areas of identified need, particularly regional NSW, the ACT and within indigenous

communities. • Develop and maintain a skilled workforce to meet the needs of clients as we expand. • Continue to focus on improving the quality and consistency of our services and measurement of client outcomes. • Develop mutual and long-term partnerships with our stakeholders, to ensure our clients have access to the best

level of service delivery. • Develop our knowledge and expertise in person centred planning, which involves identifying what is important

to our clients and acting upon it, as well as piloting some person centred services in new areas. • Develop a number of mechanisms to encourage research and development, including a targeted and holistic

program, which translates research into practice. This ensures the services we offer our clients are indicative of best practice and are validated and measured.

• Develop a client consultation strategy, so that clients can be more meaningfully involved in planning services and evaluating what we do.

• Reshape services to ensure viability under the National Disability Insurance Scheme (NDIS).

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4 Principal activities, objectives and strategies (continued)

The Society's short-term objectives: The Society’s short term objectives are based on the organisation’s 2014-2017 Strategic Plan, which identifies four key priorities for Northcott:

1. Strengthen and evolve services that drive inclusion

• Ensure the quality, consistency and effectiveness of our services • Reshape services to ensure viability under NDIS • Expand disability services in a targeted and responsive way • Pursue opportunities and deliver innovative services

2. Lead and influence change through customer and community engagement

• An influential voice in evaluation and research • A recognised and respected brand to attract and retain customers and donors • Strong and diverse partnerships in communities

3. Build a workforce that shares our values and is customer focussed

• Resilient staff, responsive to changes in the environment • A skilled and flexible workforce to meet customer demands • Efficient HR systems

4. Enrich our vibrant and viable organisation

• Strong and robust planning and decision making • Proactive risk management • Contemporary systems and technology to enable growth • Improved quality and consistency of our services and measurement of client outcomes • Expanded revenue sources and sound fiscal management

Company performance is constantly measured against the following KPIs: • A range of financial indicators• Investment returns compared to benchmarks • Client activity performance including client numbers, client outputs and unit costs • Staffing measures including the number of staff, full time equivalents, recruitment and retention • Work Health and Safety measures including the number and type of incidents and lost time injuries • Fundraising performance and cost of fundraising ratio • Client satisfaction measures including compliments and complaints • Government income to cover direct cost and contribute appropriately to overheads • The ratio of successful tenders over tenders applied for

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5 Operating and financial review

Review and result of operations

The operations for the year ended 30 June 2015 resulted in a consolidated net surplus of $2,683,497 (2014: $1,659,793).

Income from government funding was greater than that achieved last year, primarily due to an expansion in Ageing, Disability and Home Care (ADHC) programs. Investment returns on managed funds generated a positive return. Expenditure on client programmes was significantly higher than last year as a result of increased activity and an increase in the expenses associated with setting up and running the new programs. Expenditure in all other areas was in accordance with expectations and includes some costs associated with transitioning to changing funding and operational arrangements under the National Disability Insurance Scheme (NDIS). Significant changes in the state of affairs

In the opinion of the directors there were no significant changes in the state of affairs of the Group that occurred during the financial year under review.

6 Events subsequent to reporting date

On 1 July 2015, the Society acquired Wagga Wagga Community Access Support Service Inc (“CASS”) which operates in the Riverina region, NSW. This acquisition will allow Northcott to deliver stronger, more expansive services to people with disabilities, their families and carers living in the Riverina region. In the opinion of the directors of the Society, the acquisition of CASS will not affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.

7 Likely developments

The directors do not believe that there will be any significant change in the Group’s operations for the next twelve months.

8 Environmental regulation

The Group’s operations are not subject to any significant environmental regulation under either Commonwealth or State legislation. However, the Board believes that the Group has adequate systems in place for the management of its environmental requirements and is not aware of any significant breaches of those requirements as they apply to the Group.

9 Indemnification and insurance of officers Indemnification Northcott has agreed to indemnify the current and former directors of the Society and its controlled entities against all liabilities to another person (other than Northcott or a related body corporate) that may arise from their position as directors of the Society and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Society will meet the full amount of any such liabilities, including costs and expenses.

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9 Indemnification and insurance of officers (continued) Insurance premiums The Society has paid insurance premiums in respect of directors’ and officers’ liability and legal expenses insurance contracts, for current and former directors and officers, including executive officers of the Society and directors and executive officers and secretaries of its controlled entities. The insurance premiums relate to: • costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and

whatever their outcome; and • other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or

improper use of information or position to gain a personal advantage.

Under the terms of the contract of insurance, further details of the insurance cover are not permitted to be disclosed.

10 Members Guarantee

The Northcott Society is incorporated as a company limited by guarantee. In the event of the Company being wound up, each member undertakes to contribute a maximum of $1 for payment of the Company’s liabilities. At 30 June 2015 there were 112 members (2014: 110 members) and the amount of capital that could be called up in the event of the Company being wound up is $112 (2014: $110).

11 Lead auditor’s independence declaration

The Lead auditor’s independence declaration is set out on page 32 and forms part of the directors’ report for financial year ended 30 June 2015.

This report is made with a resolution of the directors:

__________________________ M. Briggs Director

Dated at Sydney this 21 September 2015

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The Northcott Society and its controlled entities Statements of profit or loss and other comprehensive income For the year ended 30 June 2015 In AUD Consolidated The Society

Note 2015 2014 2015 2014 Revenue from government funding 44,929,370 36,290,118 44,929,370 36,290,118 Revenue from capital grant income 29,055 426,910 29,055 426,910 Revenue from estates and bequests 1,157,336 340,785 1,157,336 340,785 Revenue from sale of goods 991,388 1,114,688 991,388 1,114,688 Revenue from fundraising and donations

- Monetary 2,409,647 1,904,944 1,976,667 1,879,132 - Non - monetary 163,421 147,973 143,421 147,973

Revenue from rental and accommodation 894,419 724,596 894,419 724,596 Revenue from royalties 81,630 159,078 81,630 159,078 Profit from sale of non-current assets 340,578 191,184 340,578 191,184 Other income 1,143,676 1,019,447 1,038,028 1,068,439 Total revenue 52,140,520 42,319,723 51,581,892 42,342,903 Cost of sales (627,985) (723,202) (627,985) (723,202) Client programme expenses (37,845,430) (30,906,843) (37,845,430) (30,906,843) Fundraising expenses 24 (1,005,257) (900,611) (1,005,257) (900,611) Corporate support expenses (10,980,165) (9,843,817) (10,770,416) (9,715,735) Surplus / (Deficit) before financing income 1,681,683 (54,750) 1,332,804 96,512 Financial income 6 1,129,286 1,714,543 920,070 1,505,375 Net financing income 1,129,286 1,714,543 920,070 1,505,375 Share of loss of equity-accounted investees (127,472) - (127,472) - Surplus for the period 2,683,497 1,659,793 2,125,402 1,601,887

Other comprehensive income Defined benefit plan actuarial profit 8,881 23,106 8,881 23,106 Total comprehensive income for the year 2,692,378 1,682,899 2,134,283 1,624,993 The statements of profit or loss and other comprehensive income are to be read in conjunction with the notes to the financial statements set out on pages 12 to 27.

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The Northcott Society and its controlled entities Statements of changes in equity For the year ended 30 June 2015

Consolidated Accumulated funds Total equity

In AUD Balance at 1 July 2013 33,441,356 33,441,356 Total comprehensive income for the period Surplus for the period 1,659,793 1,659,793 Actuarial gains on defined benefit superannuation plans 23,106 23,106 Balance at 30 June 2014 35,124,255 35,124,255

Balance at 1 July 2014 35,124,255 35,124,255 Total comprehensive income for the period Surplus for the period 2,683,497 2,683,497 Actuarial gains on defined benefit superannuation plans 8,881 8,881 Balance at 30 June 2015 37,816,633 37,816,633

The Society In AUD Balance at 1 July 2013 30,993,976 30,993,976 Total comprehensive income for the period Surplus for the period 1,601,887 1,601,887 Actuarial gains on defined benefit superannuation plans 23,106 23,106 Balance at 30 June 2014 32,618,969 32,618,969

Balance at 1 July 2014 32,618,969 32,618,969 Total comprehensive income for the period Surplus for the period 2,125,402 2,125,402 Actuarial gains on defined benefit superannuation plans 8,881 8,881 Balance at 30 June 2015 34,753,252 34,753,252

The statements of changes in equity are to be read in conjunction with the notes to the financial statements set out on pages 12 to 27.

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The Northcott Society and its controlled entities

Statements of financial position As at 30 June 2015 In AUD Consolidated The Society

Note 2015 2014 2015 2014

Assets Cash and cash equivalents 7 8,940,532 8,903,343 8,406,011 8,610,038 Trade and other receivables 8 1,017,101 833,913 935,815 827,089 Inventories 9 217,368 293,934 217,368 293,934 Other financial assets 10 20,491,937 15,673,479 18,016,863 13,445,822 Other current assets 11 582,090 373,791 582,090 373,791 Total current assets

31,249,028 26,078,460 28,158,147 23,550,674

Trade and other receivables 8 212,936 - 212,936 - Equity-accounted investees 12 22,528 - 22,528 - Employee benefits 16 231,478 231,285 231,478 231,285 Intangible assets 14 5,607,607 4,883,576 5,607,607 4,883,576 Property, plant and equipment 13 19,607,587 19,795,510 19,607,587 19,795,510 Total non-current assets

25,682,136 24,910,371 25,682,136 24,910,371

Total assets

56,931,164 50,988,831 53,840,283 48,461,045 Liabilities

Trade and other payables 15 3,537,045 3,083,650 3,509,545 3,061,150 Employee benefits 16 3,517,484 2,970,804 3,517,484 2,970,804 Other 17 11,801,199 9,567,863 11,801,199 9,567,863 Total current liabilities

18,855,728 15,622,317 18,828,228 15,599,817

Employee benefits 16 258,803 242,259 258,803 242,259 Total non-current liabilities

258,803 242,259 258,803 242,259

Total liabilities

19,114,531 15,864,576 19,087,031 15,842,076 Net assets

37,816,633 35,124,255 34,753,252 32,618,969

Accumulated funds

General accumulated funds 18 37,816,633 35,124,255 34,753,252 32,618,969

Total accumulated funds

37,816,633 35,124,255 34,753,252 32,618,969

The statements of financial position are to be read in conjunction with the notes to the financial statements set out on pages 12 to 27.

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The Northcott Society and its controlled entities Statements of cash flows For the year ended 30 June 2015 In AUD Consolidated The Society

Note 2015 2014 2015 2014

Cash flows from operating activities

Cash receipts from customers, donations and grants

58,285,788 46,739,783 57,748,917 46,778,878

Cash paid to suppliers and employees

(52,267,642) (43,421,359) (52,082,892) (43,299,373) Cash generated from/(used in) operations

6,018,146 3,318,425 5,666,025 3,479,505

Managed fund distribution received

1,034,518 1,030,763 944,748 994,103 Interest received

317,063 205,352 313,688 200,123

Net cash from operating activities

7,369,727 4,554,539 6,924,461 4,673,731

Cash flows from investing activities

Proceeds from sale of non-current assets

1,087,919 2,225,738 1,087,919 2,225,738

Proceeds from sale / (acquisition) of managed fund investments held for trading

(5,113,455) (2,151,408) (4,909,405) (837,729)

Acquisition of property, plant and equipment and intangible assets

(3,157,002) (2,595,898) (3,157,002) (2,595,898)

Acquisition of other investments (150,000) - (150,000) - Net cash from/(used in) investing activities (7,332,538) (2,521,658) (7,128,488) (1,207,889)

Net increase/(decrease) in cash and cash equivalents

37,189 2,032,971 (204,027) 3,465,842

Cash and cash equivalents at 1 July

8,903,343 6,870,372 8,610,038 5,144,196

Cash and cash equivalents at 30 June 7 8,940,532 8,903,343 8,406,011 8,610,038

The statements of cash flows are to be read in conjunction with the notes to the financial statements set out on pages 12 to 27.

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The Northcott Society and its controlled entities Notes to the consolidated financial statements For the year ended 30 June 2015

1. Reporting entity

The Northcott Society (the ‘Society’ or ‘Company’) is a not-for-profit company limited by guarantee and domiciled in Australia. The consolidated financial report of the Society for the financial year ended 30 June 2015 comprises the Society and its controlled entities (together referred to as the ‘Group’).

2. Changes in Accounting Policies

During the current reporting period, the Company changed the discount rate used in measuring its other long term employee benefits (long service leave) from the Australian government bond rate to the high quality corporate bond rate. This change was necessitated by developments in the Australian business environment that confirmed there is a sufficiently observable, deep and liquid market in high quality Australian corporate bonds to satisfy the requirements in AASB 119 Employee Benefits. The Company has concluded that this has resulted in a change in accounting estimate in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. However, the impact of this change on the carrying amount of other long term employee benefits during the current reporting period was not material.

3. Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements, by the Company and its controlled entities.

(a) Statement of compliance

The financial report is a tier 2 general purpose financial report which has been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements (AASBs) (including Australian Accounting Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Australian Charities and Not-For-Profits Commission Act 2012.

The statements were approved by the board of directors on the 21 September 2015.

(b) Basis of Preparation

(i) Basis of measurement

The financial report is presented in Australian dollars.

The financial report is prepared on the historical cost basis except for financial instruments classified as held for trading which are stated at their fair value.

(ii) Estimates and judgements

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The preparation of a financial report in conformity with Australian Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

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The Northcott Society and its controlled entities Notes to the consolidated financial statements (continued) For the year ended 30 June 2015

3. Significant accounting policies (continued) (c) Basis of consolidation

(i) Subsidiaries The Group financial statements consolidate those of the Parent company and all of its subsidiaries as of 30 June 2015. The Parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 30 June.

The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.

(ii) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(iii) Interests in equity-accounted investees The Group’s interests in equity-accounting investees comprise interest in a joint venture. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Interest in the joint venture is accounted for using the equity method. It is initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of equity accounted investees, until the date on which significant influence or joint control ceases.

(d) Financial Instruments

(i) Non-derivative financial instruments Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables. Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured as described below.

Cash and cash equivalents comprise cash balances and call deposits.

Where payment terms for disposed assets are deferred for more than twelve months, the receivable is discounted to its present value. The unwinding of the discount is recognised as interest income.

Financial assets at fair value through profit or loss An instrument is classified as at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s documented risk management or investment strategy. Upon initial recognition, attributable transaction costs are recognised in profit or loss when incurred. Financial instruments at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss.

Other Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.

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3. Significant accounting policies (continued)

(e) Property, plant and equipment

(i) Owned assets Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation (see below) and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Impairment of assets is discussed in Note 3(h). Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

(ii) Leased assets

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Other leases are classified as operating leases. Lease payments are accounted for as described in accounting policy in Note 3(m).

(iii) Subsequent costs

The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied within the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as an expense as incurred.

(iv) Depreciation

With the exception of freehold land, depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated.

Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the entity will obtain ownership by the end of the lease term.

The estimated useful lives in the current and comparative periods are as follows:

• Buildings 40 years

• Leasehold improvements 3 years

• Plant and equipment 4 – 10 years

The residual value, the useful life and the depreciation method applied to an asset are reassessed at least annually.

(f) Intangible assets (i) Internally generated Intangible Assets

The Company developed a website in the previous year, which it anticipates will drive additional revenue streams. Expenditure on research activities, undertaken with the prospect of gaining new technical knowledge and understanding, is recognised in profit or loss as incurred. Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the company intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs.

Other development expenditure is recognised in profit or loss as incurred. Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses.

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(f) Intangible assets (continued) (i ) Internally generated Intangible Assets (continued)

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

Intangible assets are amortised on a straight-line basis in profit or loss over their estimated useful lives, from the date that they are available for use. Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.


• Website 5 years

(ii) Acquired Intangible Assets Intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

Intangible assets are amortised on a straight-line basis in profit or loss over their estimated useful lives, from the date that they are available for use. Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.


• Buildings projects 40 years

• Software 7 years

(g) Inventories

Inventories of raw material, parts, supplies and work in progress expended and assembled by Northcott are valued using the weighted average cost method and are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Cost includes direct materials, direct labour and other direct costs necessary to bring inventories to their present location and condition.

(h) Impairment (i) Financial assets

A financial asset, including an interest in an equity-accounted investee, 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.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. 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.

15 15



(h) Impairment (continued) (i) Financial assets (continued)

An impairment loss in respect of an equity-accounted investee is measured by comparing the recoverable amount of the investment with its carrying amount. An impairment loss is recognised in profit or loss, and is reversed if there has been a favourable change in the estimates used to determine the recoverable amount.

(ii) Non-financial assets

The carrying amounts of the Group’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 or cash-generating unit is the greater of its value in use and its fair value less costs to sell. As the Group is a not-for-profit organisation, value in use is determined as being the asset’s depreciated replacement cost.

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.

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 determine 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.

(i) Employee benefits (i) Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as a personnel expense in profit or loss when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(ii) Defined benefit plans A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:

• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements); • net interest expense or income; and • remeasurement.

The Group presents the first two components of defined benefit costs in profit or loss in the line item ‘Client programme expenses’. Curtailment gains and losses are accounted for as past service costs. The retirement benefit obligation recognised in the consolidated statement of financial position represents the actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

16 16



(i) Employee benefits (continued) (iii) Other long term employee benefits

The Group’s net obligation in respect of long-term employee benefits other than defined benefit plans is the amount of future benefit that employees have earned in return for their service in the current and prior periods plus related on-costs.

(iv) Short term benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date.

(v) Termination benefits

A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.

(j) Provisions

A provision is recognised in the Statement of Financial Position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

(k) Revenue

Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax (GST) payable to the taxation authority.

(i) Goods sold and services rendered

Revenue from the sale of goods is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer. Revenue from services rendered is recognised in the income statement in proportion to the stage of completion of the transaction at the reporting date.

The stage of completion is assessed by reference to estimates of work performed. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, the costs incurred or to be incurred cannot be measured reliably, there is a risk of return of goods or there is continuing management involvement with the goods.

17

17



(k) Revenue (continued)

(ii) Rental and accommodation

Revenue from rental and accommodation is recognised in the income statement on a straight line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income.

(iii) Government funding Reciprocal government grants are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant and are then recognised in the statement of profit or loss as other income on a systematic basis in the same periods in which the expenses are recognised. Revenue from non-reciprocal grants is recognised when the Group obtains control of the funds.

Government funding comprises grants for ongoing funding and specific purposes. These are recognised as income in the statement of profit or loss in the period to which the funding relates to the extent that expenditure has been incurred in accordance with the terms and conditions attaching to the funding.

Where funding in a period exceeds related expenditure, unspent amounts are either:

• Deferred and recognised as unearned income in the Statement of Financial Position if they are repayable to related government bodies under the terms and conditions of the funding; or

• Deferred and recognised as unearned income in the Statement of Financial Position if amounts are not repayable but related expenditure has not yet been incurred in accordance with the terms and conditions of the funding; or

• Recognised as income if the amounts are not repayable and no obligation exists to incur expenditure in accordance with specified terms and conditions.

Amounts deferred are presented within “Current liabilities – Other”.

(iv) Disposal of non-current assets

The net gain on disposal of non-current assets is recognised as revenue at the date control of the asset passes to the buyer, usually when an unconditional contract of sale is signed.

The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net proceeds on disposal (including incidental costs).

(v) Donations

Donations are recognised as they are received or, where special terms and conditions are attached to these, in accordance with those terms and conditions.

(vi) Contribution of assets

Contribution of assets and contributions to assist in the acquisition of assets, being non-reciprocal transfers, are recognised as revenue at the fair value of the asset received when the Group gains control of the contribution.

(vii) Estates and bequests

Estates and bequests received are recognised as income by the Group in accordance with the terms and conditions of the bequests. Where no specific terms and conditions exist, these are recognised as income as follows:

• Cash distributions from estates at the time of receipt; and • Shares, real property and other securities at the estimated market value when the risks and benefits pass to

the Society.

(viii) Managed fund income distributions

Managed fund income distributions are recognised in the period in which they are receivable.

18 18



(l) Finance income and expense

Finance income comprises interest income on funds invested, managed fund income distributions and changes in the fair value of financial assets at fair value through profit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Finance expenses comprises changes in the fair value of financial assets at fair value through profit or loss, and impairment losses recognised on financial assets.

(m) Expenses (i) Operating lease payments

Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the income statement as an integral part of the total lease expense and spread over the lease term.

(n) Income tax

The Group is exempt from income tax under the Income Tax Assessment Act, 1997, as amended.

(o) Segment reporting

A segment is a distinguishable component of the Group that is engaged in either providing goods or services (business segment) or in providing goods and services within a particular economic environment (geographical segment), which is subject to risk and rewards that are different from those of other segments.

(p) Goods and services tax

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 taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Statement of Financial Position.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

4. Determination of fair values

A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(i) Investment in equity securities

The fair value of financial instruments classified as held for trading is their quoted bid price at the reporting date.

19

19


5. Expenses

In AUD Consolidated The Society 2015 2014 2015 2014

Depreciation 1,873,553 1,820,448 1,873,553 1,820,448 Impairment loss (reversal) on trade receivables (718) - (718) - Operating lease rental expense 882,276 694,613 882,276 694,613 Personnel expenses Wages and salaries 25,527,872 23,719,429 25,527,872 23,719,429 Increase in asset for defined benefit superannuation plans

8,688 19,465 8,688 19,465

Contributions to defined contribution superannuation plans

2,558,205 2,083,021 2,558,205 2,083,021

Increase in liability for annual leave 411,364 94,268 411,364 94,268 Increase in liability for long service leave 237,344 5,490 237,344 5,490 28,743,473 25,921,673 28,743,473 25,921,673

6. Net financing income

In AUD Interest income – other parties 317,063 205,352 313,688 200,123 Managed fund income distribution 1,107,222 1,030,763 944,748 994,103 Gain / (Loss) from managed fund investments (294,999) 478,428 (338,366) 311,149 Financial income 1,129,286 1,714,543 920,070 1,505,375 Net financing income 1,129,286 1,714,543 920,070 1,505,375

7. Cash and cash equivalents

In AUD Current Cash on hand 19,720 18,770 19,720 18,770 Cash at bank 8,920,812 8,884,573 8,386,291 8,591,268 Cash and cash equivalents in the statements of cash flows

8,940,532 8,903,343 8,406,011 8,610,038

20

20


8. Trade and other receivables

In AUD Consolidated The Society Current 2015 2014 2015 2014

Trade receivables 590,778 499,660 587,943 502,613 Less: Impairment losses (13,264) (13,981) (13,264) (13,981) 577,514 485,679 574,679 488,632 Other receivables 439,587 348,234 361,136 338,457 1,017,101 833,913 935,815 827,089 Non-Current

Other receivables 212,936 - 212,936 - 9. Inventories

In AUD Raw materials, supplies and parts – at cost 151,492 184,889 151,492 184,889 Less: Provision for inventory obsolescence (15,149) (16,730) (15,149) (16,730) Work in progress 81,025 125,775 81,025 125,775 217,368 293,934 217,368 293,934

10. Other financial assets

In AUD Current Financial assets designated at fair value through profit or loss 20,491,937 15,673,479 18,016,863 13,445,822 The financial assets designated at fair value through profit or loss are equity securities that otherwise would have been classified as available for sale. 11. Other assets

In AUD Current Prepayments 582,090 373,791 582,090 373,791

12. Equity accounted investees

In AUD Non-Current Interest in Joint Venture 22,528 - 22,528 - As One Therapy Pty Limited (“As One Therapy”) is the only joint arrangement, in which the Group participates. This was As One Therapy’s first year of operation and the Group’s ownership interest is 33.33%. As One Therapy offers expert allied health services in the Australian Capital Territory. As One Therapy is structured as a separate vehicle and the Group has a residual interest in the net assets of As One Therapy. Accordingly, the Group has classified its interest in As One Therapy as a joint venture.

21

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ly 2

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4,65

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607

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9 39

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2 5,

607,

607

The

com

pany

has

com

plet

ed t

wo

build

ing

proj

ects

, one

at

Wag

ga W

agga

and

ano

ther

at

Mou

nt H

utto

n in

pre

viou

s ye

ars.

The

build

ing

proj

ects

are

util

ised

for

dis

abili

ty h

ousi

ng. T

he

com

pany

was

aw

arde

d gr

ants

from

the

NSW

gov

ernm

ent i

n th

e to

tal a

mou

nt o

f $4,

493,

900

to e

nabl

e co

nstr

uctio

n. U

nder

the

agre

emen

t, th

e co

mpa

ny h

as a

rig

ht to

con

tinue

d us

e of

the

prop

ertie

s for

thei

r int

ende

d pu

rpos

e un

til s

uch

time

as th

e co

mpa

ny b

elie

ves

it is

una

ble

to c

ontin

ue to

pro

vide

thos

e se

rvic

es. T

he te

rms

of th

e ag

reem

ent e

stab

lish

that

at s

uch

time,

whe

n ei

ther

the

prop

erty

is s

old

or n

o lo

nger

use

d fo

r its

inte

nded

pur

pose

, the

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ernm

ent h

as a

cav

eat t

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rovi

des

a 10

0% e

quita

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inte

rest

. Acc

ordi

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ke

title

of t

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nd a

nd th

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d w

ith th

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le a

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h tim

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tal a

mou

nt o

f $4,

493,

900

has

been

rec

ogni

sed

as c

apita

l gra

nts

inco

me

in p

revi

ous

year

s an

d th

e co

st o

f the

pr

ojec

t has

bee

n re

cogn

ised

as a

n in

tang

ible

ass

et in

pre

viou

s yea

rs ($

4,98

3,34

8).

23

23

The Northcott Society and its controlled entities Notes to the consolidated financial statements (continued) For the year ended 30 June 2015 15. Trade and other payables

In AUD Consolidated The Society

Current 2015 2014 2015 2014

Trade payables 1,707,436 1,572,009 1,707,436 1,572,009 Other Payables 1,829,609 1,511,641 1,802,109 1,489,141 3,537,045 3,083,650 3,509,545 3,061,150 16. Employee benefits

In AUD Current Other wages 891 86,374 891 86,374 Liability for long service leave 1,236,552 1,015,752 1,236,552 1,015,752 Liability for annual leave 2,280,041 1,868,677 2,280,041 1,868,677 Total liability for employee benefits 3,517,484 2,970,804 3,517,484 2,970,804 Non-current Liability for long-service leave 258,803 242,259 258,803 242,259 Total liability for employee benefits 258,803 242,259 258,803 242,259 Recognised asset for defined benefit obligations (231,478) (231,285) (231,478) (231,285) 17. Other liabilities

In AUD Current Unearned income – government grants 11,455,218 9,020,123 11,455,218 9,020,123 Unearned income – other sources 345,981 547,740 345,981 547,740 11,801,199 9,567,863 11,801,199 9,567,863

18. Capital and reserves

Reconciliation of movement in capital and reserves

In AUD Consolidated

General Accumulated

funds

Total equity

Balance at 1 July 2014 35,124,255 35,124,255 Total recognised income and expense 2,692,378 2,692,378 Balance at 30 June 2015 37,816,633 37,816,633 The Society

General Accumulated

funds

Total equity

Balance at 1 July 2014 32,618,969 32,618,969 Total recognised income and expense 2,134,283 2,134,283 Balance at 30 June 2015 34,753,252 34,753,252

24

24

The Northcott Society and its controlled entities Notes to the consolidated financial statements (continued) For the year ended 30 June 2015 19. Operating leases

Leases as lessee Non-cancellable operating lease rentals are payable as follows: Consolidated The Society In AUD 2015 2014 2015 2014 Less than one year 1,092,483 634,830 1,092,483 634,830 Between one and five years 1,255,633 652,172 1,255,633 652,172 2,348,116 1,287,002 2,348,116 1,287,002 The Group leases property under non-cancellable operating leases expiring from one to five years. Leases generally provide the Group with a right of renewal at which time all terms are renegotiated. During the financial year ended 30 June 2015, $882,276 was recognised as an expense in the income statement in respect of operating leases (2014: $694,613). Leases as lessor The Group leases out part of its property under an operating lease. The future minimum lease payments under non-cancellable leases are as follows: In AUD Less than one year 278,920 233,236 278,920 233,236 Between one and five years 1,115,680 - 1,115,680 - More than five years 316,525 - 316,525 - 1,711,125 233,236 1,711,125 233,236 During the financial year ended 30 June 2015, $281,464 was recognised as rental income in the income statement (2014: $258,381). 20. Consolidated entities

Ownership interest 2015 2014 Parent entity The Northcott Society

Subsidiaries Spinecare Foundation 100% 100% Northcott Innovation Limited 100%

25

25

The Northcott Society and its controlled entities Notes to the consolidated financial statements (continued) For the year ended 30 June 2015 21. Key management personnel disclosures

Transactions with key management personnel In addition to their salaries, the Group also contributes to post-employment defined contribution funds on behalf of key management personnel. Key management personnel compensation The key management personnel compensation includes the following expenses: Consolidated The Society

In AUD 2015 2014 2015 2014 Total key management personnel compensation 1,700,452 1,460,740 1,700,452 1,460,740 Other related party transactions From time to time directors of Northcott, or their director related entities, may purchase from or supply goods and services to Northcott. These dealings are on the same terms and conditions as those entered into by other Northcott employees, customers and suppliers. During the year there were no transactions with directors of Northcott or their director related entities.

22. Segment reporting

The Group is engaged in the provision of goods and services to persons with disabilities and operates wholly within New South Wales and the Australian Capital Territory. 23. Subsequent events

On 1 July 2015, the Society acquired Wagga Wagga Community Access Support Service Inc (“CASS”) which operates in the Riverina region, NSW. This acquisition will allow Northcott to deliver stronger, more expansive services to people with disabilities, their families and carers living in the Riverina region. In the opinion of the directors of the Society, the acquisition of CASS will not affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.

26

26

The Northcott Society and its controlled entities Notes to the consolidated financial statements (continued) For the year ended 30 June 2015 24. Fundraising appeals conducted during the financial year

Fundraising appeals conducted during the financial year included various fundraising projects and general receiving of direct and indirect solicited donations.

Consolidated The Society 2015 2014 2015 2014

(i) Results of fundraising appeals In AUD Gross proceeds from fundraising 2,573,068 2,052,916 2,120,088 2,027,105 Less: Direct costs of fundraising appeals (1,005,257) (900,611) (1,005,257) (900,611) Net surplus obtained from fundraising appeals 1,567,811 1,152,305 1,114,831 1,126,494

(ii) Application of net surplus obtained from fundraising appeals

In AUD Distributions (expenditure on direct services) 37,845,430 30,906,843 37,845,430 30,906,843 Recurrent administration expenses 10,980,165 9,843,817 10,770,416 9,715,735 48,825,595 40,750,660 48,615,846 40,622,578

(iii) Application of net surplus obtained from fundraising appeals

The shortfall between the net surplus available from fundraising appeals and total expenditure was provided from the following sources:

In AUD Government grants 44,958,425 36,717,028 44,958,425 36,717,028 Financial income 1,129,286 1,714,543 920,070 1,505,375 Gain from sale of goods 363,403 391,487 363,403 391,487 Other income 3,490,167 2,435,089 3,384,517 2,484,081 Transfer (to) general accumulated funds (2,683,497) (1,659,793) (2,125,401) (1,601,887) 47,257,784 39,598,354 47,501,014 39,496,084

Consolidated The Society 2015 2014 2015 2014

$ % $ % $ % $ % (iv) Comparisons of certain monetary

figures and percentages Total cost of fundraising / 1,005,257 39 900,611 44 1,005,257 47 900,611 44 Gross income from fundraising 2,573,068 2,052,916 2,120,088 2,027,105 Net surplus from fundraising / 1,567,811 61 1,152,305 56 1,114,831 53 1,126,494 56 Gross income from fundraising 2,573,068 2,052,916 2,120,088 2,027,105 Total cost of services / 37,845,430 75 30,906,843 73 37,845,430 75 30,906,843 73 Total expenditure 50,458,837 42,374,472 50,249,088 42,246,390 Total cost of services / 37,845,430 73 30,906,843 73 37,845,430 74 30,906,843 73

Total income received from operating activities 51,799,942 42,128,539 51,241,313

42,151,719

27

27

The Northcott Society and its controlled entities Declaration by Chief Executive Officer in respect of fundraising appeals I, Kerry Stubbs, Chief Executive Officer of The Northcott Society, declare that in my opinion: a) The financial report gives a true and fair view of all income and expenditure of the Group with respect to fundraising appeal

activities for the financial year ended 30 June 2015; b) The Statement of Financial Position gives a true and fair view of the state of affairs of the Group with respect to fundraising

appeal activities as at 30 June 2015; c) The provisions of the Charitable Fundraising (NSW) Act 1991 and Regulations under the Act and the conditions attached to

the authority have been complied with during the year ended 30 June 2015; and d) The internal controls exercised by the Group are appropriate and effective in accounting for all income received and applied

by the Group from any of its fundraising appeals. Dated at Sydney this 21 September 2015. Signed in accordance with a resolution of the directors:

_______________________ Kerry Stubbs Chief Executive Officer

28

28

The Northcott Society and its controlled entities Directors’ declaration In the opinion of the directors of The Northcott Society (the Group): (a) the Group is not publicly accountable; (b) the consolidated financial statements and notes that are set out on pages 8 to 27 are in accordance with the Australian

Charities and Not-for-profits Commission Act 2012, including:

(i) giving a true and fair view of the Group’s financial position as at 30 June 2015 and of its performance, for the financial year ended on that date; and

(ii) complying with Australian Accounting Standards – Reduced Disclosure Regime and the Australian Charities and Not-

for-profits Commission Regulation 2013; and (c) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and

payable. Signed in accordance with a resolution of the directors: Dated at Sydney this 21st September 2015.

_______________________ M Briggs Director

29

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33

1800 818 286www.northcott.com.au

Documents

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