GOOD SHEPHERD MICROFINANCE ABN: FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

Transcription

1 GOOD SHEPHERD MICROFINANCE ABN: FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

2 Contents 30 June 2012 Financial Statements Directors' Report 1-5 Auditor's Independence Declaration under Section 307C of the Corporations Act Statement of Comprehensive Income 7 Statement of Financial Position 8 Statement of Changes in Equity 9 Statement of Cash Flows 10 Notes to the Financial Statements Directors' Declaration 20 Independent Audit Report 21 Page

3 Directors' Report 30 June 2012 Your directors present their report on Good Shepherd Microfinance for the financial year ended 30 June Directors The names of the directors in office at any time during, or since the end of, the year are: Names Position Appointed/Resigned Rhonda Lea Cumberland Appointed 26/05/ Resigned 30/06/2012 Robyn Gaye Roberts Appointed 26/05/ Resigned 30/06/2012 Michael Yore Appointed 26/05/ Resigned 30/06/2012 John Hutchings Appointed 26/05/ Resigned 30/06/2012 John Date Appointed 26/05/ Resigned 30/06/2012 Beverley Connors Appointed 26/05/ Resigned 30/06/2012 Christine Nixon Chair Appointed 01/07/2012 Denice Pitt Appointed 01/07/2012 Ian Clyde Appointed 01/07/2012 John Langmore Appointed 01/07/2012 Shelley Jones Appointed 01/07/2012 Therese Ryan Appointed 01/07/2012 Vinita Godinho Appointed 01/07/2012 Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Information on directors The names, qualification and experience of each person who has been a director during the year and to the date of this report are: Rhonda Lea Cumberland Experience Bachelor of Arts, Diploma of Education, Graduate Diploma Community Development, Master of Social Work, Doctor of Philosophy CEO Welfare Agency Robyn Gaye Roberts Experience Bachelor of Arts, Diploma of Education, Bachelor of Social Work CEO Welfare Agency Michael Yore Experience Bachelor of Arts, Master of Theology, Graduate Diploma of Social Studies Research & Development Manager John Hutchings Experience Lawyer, with significant experience in law, governance, leadership, strategic planning and implementation Lawyer John Date Experience Lawyer, with Masters degree in Canon Law Lawyer 1

4 Directors' Report 30 June 2012 Information on directors continued Beverley Connors Experience Beverley Connors Religious sister. Qualified Primary School Teacher Christine Nixon Experience APM (Australian Police Medal); Masters in Public Administration (MPA) Harvard; BA Macquarie University: Diploma Labour Law Sydney University, honoury doctorates Chief Commissioner of Victoria Police , Chair of Victorian Bushfire Reconstruction and Recovery Authority Denice Pitt Experience Master of Business in Management CEO UCMS , CEO Aegis , CEO Swinburne Online 2011 to current Ian Clyde LLM - Master of Law Experience Chair Uniform Consumer Credit Code Management Committee , Assistant Director for Social Policy, Consumer Affairs Victoria , Chair Business Licensing Authority John Langmore Bachelor of Commerce and Diploma of Social Studies University of Melbourne and Master in Economics Monash University Experience Director of UN Division for Social Policy & Development (NY) , Representative of the International Labour Organisation, Professorial fellow in the school of Social and Political Sciences Univeristy of Melbourne Shelley Jones Experience Master of Education (Melb Uni), Bachelor of Commerce (Melb Uni),Bachelor of Eduction (Melb Uni) Executive HR Leadership roles at Commonwealth Bank of Australia , Principal Consultant at The Mettle Group , General Manager HR for Ok Tedi Mining , Official Visitor to NSW Department of Justice, Corrective Services at Long Bay Gaol 2011, Australian Civil Corps, AusAID current Therese Ryan Experience Bachelor of Laws (LLB) - Melb; FAIM; Graduate of the Australian Institute of Company Directors (GAICD) VP and General Counsel for General Motors International Operations , Non-Executive Director of Victorian Managed Insurance Authority 2010 current, Fitted for Work 2011 current and Good Shepherd Youth and Family Services 2010 current Vinita Godinho PhD Candidate, MBA, BSc honours Experience Senior Leadership roles at ANZ within Risk & Business areas , Principal Consultant for Financial Inclusion & Project Management to the non for profit sector present 2

5 Directors' Report 30 June 2012 Information on directors continued Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Principal activities The principal activity of Good Shepherd Microfinance during the financial year was was to provide a range of services nationally to low income individuals and communities, who have been excluded from traditional financial services, through the provision of small loans and other financial services. The following significant changes in the nature of the principal activities occurred during the financial year:! The company was incorporated on 26 May 2011 and started operating on 1 January 2012 therefore this financial report is only for the period from 1 January 2012 until 30 June Short term objectives The company's short term objectives are to:! Develop a whole of agency approach to delivering service to financially excluded clients; and! Provide direct and immediate support to people on low incomes and experiencing the effects of poverty, homelessness, abuse and unemployment by providing:! Financial relief, through microfinance;! Support community managed microfinance providers; and! Training of personnel to educate and counsel people on low incomes on financial matters. Long term objectives The company's long term objectives are to:! Strengthen capability and manage growth to underpin and develop our services in the provision of microfinance, applying core Good Shepherd values and in accordance with the philosophy of the Sisters of Good Shepherd;! Partner with those we serve, the Good Shepherd Australia New Zealand (GSANZ) network and those who join us to further justice and systematic change;! Develop targeted responses to new communities of need, supported by research, good practice and community education; and! Challenge those structures and beliefs that diminish human dignity and to constantly explore innovative and creative ways of enabling people of all culture, religious and social backgrounds to enjoy the fullness of life. Strategy for achieving the objectives To achieve these objectives, the company has adopted the following strategies: 3

6 Directors' Report 30 June 2012 Strategy for achieving the objectives continued! Implementation of the existing Good Shepherd Youth & Family Services Strategic plan incorporating a specific microfinance strategy for the period 2010 to 2015; and! Development of Programs, partnerships and community education to assist people to move along the financial continuum ranging from financial crisis to financial independence and resilience. Some of the key programs are:! NILS A community-based program offering applicants on a low income no interest loans to the value of up to 1,200 for essential household goods and services. Applicants must be in receipt of a current concession card. Repayments are made in affordable amounts for a period of between 12 and 18 months. This program not only services clients who access the service of their own accord, but provides other organisations utilising the service, with tools, to provide an holistic approach to the client s financial circumstances;! StepUp This program provides low interest loans to people on low income and holding a current Centrelink Concession Card or receiving Family Tax Benefit Part A, through community providers across Australia. The loan can range from for personal or household purposes and interest charged at a fixed low rate which is to be repaid within three years; and! Good Money The community finance hubs offer safe, affordable and responsible finance services using a service delivery model operating out of stand- alone retail store fronts. This program provides customers with an integrated way of accessing financial assistance and support such as NILS, StepUp and financial counselling (provided by local community agencies), and access to information to enhance the customers financial capacity and increase their understanding of personal finances, all under the one roof. How principal activities assisted in achieving the objectives The principal activities assisted the company in achieving its objectives by:! Undertaking research and implementing the findings in some service areas;! Reviewing services annually with the current quality system;! Recording 19,224 active NILS loans and 1,044 Step Up loan applications; and! Records supporting increased take up in Indigenous clients accessing NILS services 2072 (21.8%) ; StepUp services 291 (9%) compared to prior year. Performance measures The following measures are used within the company to monitor performance:! Registration and accreditation to government standards and requirements;! Administrative cost to service delivery ratio;! Worksafe compliance around OH&S;! Number of individuals and families and communities assisted in 2011/12; and! Accurate and transparent management and financial reports tracking expenditure commitment to Funding organisations. 4

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9 Statement of Comprehensive Income 2012 Note Revenue 2 8,162,236 Transfers to other agencies (6,034,752) Employee benefits expense (964,031) Depreciation and amortisation expense (19,391) Rent (108,719) Program costs (132,698) Computer expenses (54,530) Corporate services (290,586) Consulting and professional fees (186,531) Other expenses 3 (252,561) Total comprehensive income for the year 118,437 The accompanying notes form part of these financial statements. 7

10 Statement of Financial Position As At 30 June 2012 ASSETS CURRENT ASSETS Cash and cash equivalents 4 32,740,979 Trade and other receivables 5 94,596 Other assets 7 65,514 TOTAL CURRENT ASSETS 32,901,089 NON-CURRENT ASSETS Property, plant and equipment 6 201,696 TOTAL NON-CURRENT ASSETS TOTAL ASSETS Note ,696 33,102,785 LIABILITIES CURRENT LIABILITIES Trade and other payables 8 6,422,340 Employee benefits 10 28,118 Other liabilities 9 26,521,050 TOTAL CURRENT LIABILITIES 32,971,508 NON-CURRENT LIABILITIES Employee benefits 10 12,840 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS 12,840 32,984, ,437 EQUITY Retained earnings 118,437 TOTAL EQUITY 118,437 The accompanying notes form part of these financial statements. 8

11 Statement of Changes in Equity 2012 Retained earnings Balance at 1 July Surplus for the period 118,437 Balance at 30 June ,437 The accompanying notes form part of these financial statements. 9

12 Statement of Cash Flows Note 2012 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from government and other funders 37,818,762 Payments to suppliers and employees (2,179,821) Transfers to other agencies (2,830,513) Interest received 3,046 Other receipts 41,890 Net cash provided by (used in) operating activities 15 32,853,364 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (112,385) Net cash used by investing activities (112,385) CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in cash and cash equivalents held 32,740,979 Cash and cash equivalents at beginning of year - Cash and cash equivalents at end of financial year 4 32,740,979 The accompanying notes form part of these financial statements. 10

13 Notes to the Financial Statements The financial statements are for Good Shepherd Microfinance as an individual entity, incorporated and domiciled in Australia. Good Shepherd Microfinance is a not-for-profit company limited by guarantee. 1 Summary of Significant Accounting Policies Basis of preparation The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. The financial statements have been prepared on an accruals basis and are based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. (a) Revenue The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of Good Shepherd Microfinance's activities as discussed below. Grant revenue, where the transaction is assessed to be a reciprocal transaction, is recogised in the statement of comprehensive income on a pro-rata basis following the satisfaction of funding requirements. Expenditures on each program are taken up when incurred in accordance with the grants' requirements and in accordance with the program costs. Where programs are not completed at balance date the unused proportion of the grant funds received is carried forward as grants received in advance to cover expenditures to be incurred after balance date. Non-reciprocal grants received are recognised in the statement of comprehensive income when received. Revenue from fund raising activities is brought to account on a cash basis as it is not possible to identify income from donations and other fund raising until received. Donations of goods and services from volunteers and suppliers are not taken up in the accounts as they are not able to be quantified accurately. Interest revenue is recognised when the right to receive the interest has been established. Revenue from rendering of a service is recognised upon delivery of the service to the clients. All revenue is stated net of the amount of goods and services tax (GST). (b) 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 three months or less which are convertible to a known amount of cash and subject to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. 11

14 Notes to the Financial Statements 1 Summary of Significant Accounting Policies continued (c) Property, plant and equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Freehold land and buildings that have been contributed at no cost, or for nominal cost are valued and recognised at the fair value of the asset at the date it is acquired. Plant and equipment Plant and equipment are measured on the cost basis less depreciation and impairment losses. Cost includes expenditure that is directly attributable to the asset. Plant and equipment that have been contributed at no cost, or for nominal cost are valued and recognised at the fair value of the asset at the date it is acquired. Depreciation The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated on a reducing balance basis over the asset's useful life to the company commencing from the time the asset is held ready 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: The assets' residual values, depreciation methods and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. (d) Income tax No provision for income tax has been raised as the company is exempt from income tax under Div 50 of the Income Tax Assessment Act (e) 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 Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. 12

15 Notes to the Financial Statements 1 Summary of Significant Accounting Policies continued (f) Impairment of assets At the end of each reporting year, the company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to the asset's carrying value. Value in use is either the discounted cash flows relating to the asset or depreciated replacement cost if the criteria in AASB 136 'Impairment of Assets' are met. Any excess of the asset's carrying value over its recoverable amount is expensed to the statement of comprehensive income. To 30 June 2012, no impairment losses have been recorded. (g) Employee benefits Provision is made for the company's liability for employee benefits arising from services rendered by employees to the end of the reporting year. 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 cashflows. Contributions are made by the company to an employee superannuation fund and are charged as expenses when incurred. (h) Leases Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses on a straight-line basis over the life of the lease term. (i) Economic dependence Good Shepherd Microfinance is dependent on the federal government for the majority of its revenue used to operate the business. At the date of this report the directors have no reason to believe the federal government will not continue to support Good Shepherd Microfinance. (j) Adoption of new and revised accounting standards During the current year, the company adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory. The adoption of these Standards has not had a significant impact on the recognition, measurement and disclosure of transactions. (k) New accounting standards for application in future periods The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods.the company has decided against early adoption of these Standards but does not expect the adoption of these standards to have any impact on the reported position or performance of the company. 13

16 Notes to the Financial Statements 2 Revenue - operating grants 7,256,125 - contributions 804,417 - interest received 59,804 - donations other revenue 41,740 Total Revenue 8,162, Other expenses Other expenses for the year includes the following specific expenses - Auditor's remuneration 14,000 - Administration and management fees Advertising 28,247 - Motor vehicle expenses 15,801 - Printing and stationery 20,043 - Telephone and fax 19,454 - Training & development 31,157 - Travel 46,136 - Other expenses 77, ,561 4 Cash and Cash Equivalents Cash on hand 150 Cash at bank 32,740,829 32,740,979 5 Trade and Other Receivables CURRENT Trade receivables 13,990 Deposits 33,243 Other receivables 47,363 94,596 At 30 June 2012 there are no balances within trade receivables that contain assets that are impaired and are past due. It is expected these balances will be received when due. Impaired assets are provided for in full. 14

17 Notes to the Financial Statements Property, Plant and Equipment Motor vehicles At cost 97,487 Accumulated depreciation (9,266) Total motor vehicles 88,221 Office equipment At cost 19,506 Accumulated depreciation Total office equipment 18,965 Computer software At cost 15,288 Accumulated depreciation (541) (2,093) Total computer software 13,195 Improvements At cost 88,805 Accumulated depreciation (7,490) Total improvements 81,315 Total property, plant and equipment 201,696 (a) Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Motor Office IT Leasehold Vehicles Equipment Equipment Improvements Total Balance at the beginning of the period Additions 97,487 19,506 15,288 88, ,087 Depreciation expense (9,266) (542) (2,093) (7,490) (19,391) Balance at 30 June ,221 18,964 13,195 81, ,696 15

18 Notes to the Financial Statements Other Assets CURRENT Prepayments 8,756 Accrued income 56,758 65,514 8 Trade and Other Payables CURRENT Unsecured liabilities Trade payables 3,862,106 GST payable 2,380,781 Employee benefits 143,554 Sundry payables and accrued expenses 35,899 6,422,340 9 Other Liabilities CURRENT Income in advance 26,521,050 As described in Note 1 (a) Income In Advance represents reciprocal transfers of grant funds where funding conditions have not been met and programs are not complete at balance date. The unused proportion of the grant funds is carried forward as Income in Advance to cover expenditures to be incurred after balance date.. 10 Employee Benefits CURRENT Long service leave 28,118 NON-CURRENT Long service leave 12, Interests of Key Management Personnel The totals of remuneration paid to the key management personnel of Good Shepherd Microfinance during the year are as follows: Short-term employee benefits 102,398 Post-employment benefits 10, ,277 16

19 Notes to the Financial Statements Capital and Leasing Commitments Operating lease commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements Payable - minimum lease payments: - no later than 1 year 197,417 - between 1 year and 5 years 244, ,976 Operating leases have been have been taken out for the premises in Dandenong, Collingwood and Geelong. Lease payments are increased on an annual basis to reflect market rentals. 13 Financial Risk Management The main risks Good Shepherd Microfinance is exposed to through its financial instruments are credit risk, liquidity risk and interest rate risk. The company's financial instruments consist mainly of deposits with banks, accounts receivable and payable. (a) Credit risk The company has no significant concentration of credit risk with any single counterparty or group of counterparties. Details with respect to credit risk of Trade and Other Receivables are provided in Note 5. (b) Interest rate risk Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. At 30 June 2012 the company does not believe it is exposed to any material interest rate risk. (c) Liquidity risk Liquidity risk arises from the possibility that the company might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. At 30 June 2012 the company does not believe it is exposed to any material liquidity risk. 17

20 Notes to the Financial Statements 13 Financial Risk Management continued The table/s below reflect an undiscounted contractual maturity analysis for financial liabilities. Financial liability maturity analysis Within 1 Year 2012 Total 2012 Financial liabilities due for payment Trade and other payables (excluding estimated annual leave and GST) 3,300,178 3,300,178 Total contractual outflows 3,300,178 3,300,178 The timing of expected outflows is not expected to be materially different from contracted cashflows. (d) Net Fair Values The company has assessed the fair value of asset and liabilities as at 30 June 2012 and believes there are no differences between the carrying values and fair values of those assets and liabilities. 14 Related Party Transactions Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. The following transactions occurred with related parties: Payments Receipts Good Shepherd Australia & New Zealand Revenue 12,375 - Admin services charge 34,911 - Reimbursements 39,548 1,056 86,834 1,056 Good Shepherd Youth and Family Service Revenue 57,192 - Expenses 12,058 - Reimbursements 247,669 - Transfers - 1,430, ,919 1,430,300 Rosemount Good Shepherd Youth and Family Service Revenue 24,289 - Reimbursements 5,619-29,908-18

21 Notes to the Financial Statements Cash Flow Information Reconciliation of result for the year to cashflows from operating activities Surplus for the year 118,437 Non-cash flows in surplus: - depreciation 19,391 - net transfer of fixed assets from GSYFS (108,702) Changes in assets and liabilities: - (increase)/decrease in trade and other receivables (94,596) - (increase)/decrease in other assets (65,514) - increase/(decrease) in income in advance 26,521,050 - increase/(decrease) in trade and other payables 6,422,340 - increase/(decrease) in employee benefits 40,958 Cashflow from operations 32,853, Company Details The registered office of the company is: Ground Floor High Street Northcote Vic

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