Special Purpose Concise Financial Report. 30 June 2013

Transcription

1 Special Purpose Concise Financial Report 30 June 2013

2 Trevor Spicer Treasurer s Report It is my privilege to present the 2013 finance report as Treasurer of LINK Community Transport Inc. (LINK). The report is produced with the Concise Financial Report which is audited by KPMG. It has been a year full of challenges, changes and opportunities. These have been both external and internal. The external challenges included the continuation of economic uncertainty, amplified by the long election campaign season. Funding changes were mooted by both major parties but not resolved in the year ended 30 June 2013 as the Federal election was not held until September The internal challenges have been in some of the important decisions that have needed to be taken to ensure the ongoing viability of the organisation. The Committee of Management see the future of the organisation as a leader in the Community Transport sector and one that makes the most of new opportunities. The changes have included the bipartisan agreement at a federal level to the National Disability Insurance Scheme (NDIS) which will, over time, transform the sector in which LINK operates. Another change was the introduction of KPMG as the organisation s auditors for the 2013 financial year. The opportunities include new business possibilities and the significant commitment made to the scheduling software which will contribute significantly to the capacity of the organisation to grow into the future. During the year the Federal Labor government continued the pursuit of the reforms in the Not-for-profit and Charitable sector. In December 2012 the Australian Charities and Notfor-profits Commission (ACNC) was legislated into existence. While the change of government has rendered some of the reform process uncertain, while the ACNC remains there is an additional layer of reporting required by LINK to satisfy the ACNC s requirements. Positioning the organisation for the future is generally not a fast process and is often challenging. The Committee of Management believes that with the team that is in place, an effective strategy to maximise future opportunities and maintaining the strongly committed volunteers are vital to the success of LINK in the future. The financial result for 2013 of a loss of $246,540 (2012: loss of $2,434) is on face value not a good one, and requires some explanation. At the start of the year ended 30 June 2013 LINK was expecting to realise revenue of $68,803 representing the reversal of a performance bond that was recognised as a liability at both 30 June 2011 and 30 June 2012 and as an expense in the 2011 financial year, relating to the contract with the City of Melbourne. The prior period financial statements have been restated to remove the liability and expense and in the 2013 financial year LINK did not recognise revenue associated with the reversal of this liability. Refer to Note 3 of the concise financial report for further detail. Income has increased year on year since 2009/10 including an increase of 18% or $278,487 to $1,812,897 in 2012/13 compared to $1,534,410 in the previous year. A 119% increase in project revenue which was received for the Sunbury Transport Project, Regional Travel Training & Point Cook Community Transport projects and a 12% increase in Home and Community Care funding were the main revenue increases. Donations increased significantly assisted by a generous donation of $45,000 that assisted with the replacement of two buses during the reporting period. Link Community Transport s primary revenue comes from HACC funding. This year HACC funding increased by 12% or $99,726. Amongst the facts and figures it is important to remember the key role that LINK plays in assisting to transport disadvantaged people in the community and how vital this service is to many people. As has been mentioned in previous Treasurer s reports, alternative income sources are required to support the core business of LINK. Together with Management your Committee of Management is pursuing strategies to ensure that the organisation continues to meet and exceed its obligations in the communities we serve while seizing new opportunities as they arise. 01 LINK Community Transport Annual Report 12/13

3 Expenses, excluding finance expense, increased by 31% or $502,796 from the 2011/12 level. Employment costs increased by 34% which included the pay-out of contractors associated with the City of Melbourne contract, the conclusion of some other staff which reflects the positioning of the organisation as a leader in the sector. Part of the increase in expenses is in the accounting recognition of the staff leave provisions. Last year the leave entitlements resulted in a $34,974 addition to the profit or loss; this year it is an expense of $13,991. Staff training expenses were $7,000 higher than in the 2011/12 financial year. Consulting expenses were $24,555 for the year or $16,395 higher than the previous year. Of particular note was the strategic planning day which we believe will be invaluable in helping to position LINK as a recognised leader in the sector. Volunteer reimbursement costs were just under $100,000, an increase of 27% on the previous year. Total volunteer costs, which include other volunteer expenditure increased by 25%. One of the challenges that the Committee of Management has recognised is the increase in volunteer reimbursements far beyond the funding received for this purpose. This year volunteer reimbursements were $99,965 compared to the funding of $47,788. This has necessitated the change in reimbursements which has taken effect in Fleet costs increased by 11%. Fuel costs increased by 8% or $6,211 and Registration costs increased by 11% or $8,404. There is continued focus on providing a modern and safe fleet of vehicles balanced with maintaining cost control. Interest income was 32% or $21,104 down on the previous year reflecting lower interest returns and also reflecting lower cash reserves across the year. As interest rates continue to be relatively low, our interest income is expected to decrease. Vehicle depreciation increased from $120,608 to $139,719 reflecting the continued growth of the fleet owned and operated by LINK. As previously noted, with a larger fleet comes increased insurance, registration and related maintenance costs. LINK is proud of the modern and fuel efficient fleet of vehicles that we operate. Whilst LINK believes it has found an effective formula to meet the special needs of our diverse client base whereby the vehicles provide safe and reliable transport that offers passenger comfort, management continues to review the best options available to meet our service requirements. LINK s vehicle assets increased only slightly during the year, from $910,973 to $928,469 however vehicles were replaced during the year with replacement vehicle purchases of $235,452 taking place during the year. Overall the LINK Statement of Financial Position has seen a decrease in assets, from $1,732,753 to $1,582,367 and an increase in liabilities from $281,102 to $377,256. Link s operating cash out-flow of $8,223 (2012: in-flow of $94,666) has been managed tightly to enable LINK to invest in vehicle purchases and other plant and equipment which has been funded by a combination of cash reserves and proceeds from vehicle disposals. Total equity remains strong, at over $1.2 million despite the reduction this year caused by the loss for the year. As noted in last years report, a strong capital base allows us to move forward, confident in the knowledge that we have the financial security to meet future challenges. LINK s Committee of Management and the Management team continue to strive to achieve excellent service to our clients, a safe and enjoyable workplace and an organisation that is profitable, ensuring ongoing stability and viability. My personal thanks go to Dean Barton Smith and Sophie Proghios for their support since I joined the Committee of Management in April It has been a steep and enjoyable learning curve since that time and my view is that LINK Community Transport is well positioned to face the challenges and to seize the opportunities in the future. I commend this financial report to the meeting. LINK Community Transport Annual Report 12/13 02

4 Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June $ $ Revenue 1,812,897 1,534,410 Employment expenses (1,462,955) (1,089,152) Motor vehicle expenses (144,574) (138,566) Depreciation expense (158,590) (137,765) Volunteer expenses (121,323) (96,931) Occupancy expenses (80,541) (58,058) Administration and other expenses (134,758) (79,473) Results from operating activities (289,844) (65,535) Finance income 44,344 65,448 Finance expense (1,040) (2,347) Net finance income 43,304 63,101 Profit/(loss) before tax (246,540) (2,434) Income tax expense - - Profit/(loss) for the year (246,540) (2,434) Other comprehensive income Other comprehensive income for the year - - Total comprehensive income for the year (246,540) (2,434) The Statement of Profit and Loss and Other Comprehensive Income is to be read in conjunction with the Notes to the Financial Statements. 03 LINK Community Transport Annual Report 12/13

5 Statement of Financial Position As at 30 June $ $ restated Current Assets Cash and cash equivalents 211, ,037 Investments 635, ,532 Other receivables 43,143 45,661 Total Current Assets 890,570 1,064,230 Non-Current Assets Plant and equipment 691, ,523 Total Non-Current Assets 691, ,523 Total Assets 1,582,367 1,732,753 Current Liabilities Trade and other payables 79,006 39,951 Deferred revenue 185, ,261 Employee benefits 72,686 61,134 Total Current Liabilities 337, ,346 Non-Current Liabilities Employee benefits 40,195 37,756 Total Non-Current Liabilities 40,195 37,756 Total Liabilities 377, ,102 Net Assets 1,205,111 1,451,651 Equity Retained earnings 1,205,111 1,451,651 Total Equity 1,205,111 1,451,651 The Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements. LINK Community Transport Annual Report 12/13 04

6 Statement of Changes in Equity For the year ended 30 June $ $ Retained earnings at 1 July - restated 1,451,651 1,454,085 Total comprehensive income for the year Total other comprehensive income - - Profit/(loss) for the year (246,540) (2,434) Total comprehensive income for the year (246,540) (2,434) Transactions with owners, recorded directly in equity Total transactions with members - - Retained earnings at 30 June 1,205,111 1,451,651 Statement of Cash Flows For the year ended 30 June $ $ Cash flows from operating activities Receipts from customers, grants and donations 2,072,388 1,682,071 Payments to suppliers and employees (2,123,916) (1,650,506) Interest received 44,344 65,448 Bank charges (1,039) (2,347) Net cash (used in) / provided by operating activities (8,223) 94,666 Cash flows from investing activities Proceeds from sale of investments 94, ,071 Payments for plant and equipment (267,055) (238,779) Proceeds from disposal of plant and equipment 104,136 50,500 Net cash (used in) / from investing activities (68,156) 6,792 Cash flows from financing activities - - Net (decrease) / increase in cash held (76,379) 101,458 Cash at the beginning of the financial year 288, ,579 Cash at the end of the financial year 211, ,037 The Statement of Changes in Equity and Statement of Cash Flows are to be read in conjunction with the Notes to the Financial Statements. 05 LINK Community Transport Annual Report 12/13

7 Notes to the Financial Statements For the year ended 30 June Reporting entity In the opinion of the Committee of Management, LINK Community Transport Inc ( the Company ) is not a reporting entity. The financial report of the Company, being a not-for-profit entity, is drawn up as a special purpose financial report for use by the Committee of Management and in compliance with the Associations Incorporation Reform Act This concise financial report is consistent with the full special purpose financial report. LINK Community Transport is domiciled in Australia and is primarily involved in providing transporting services to the elderly and disabled in urban and rural areas of Victoria. The special purpose financial report was authorised for issue by the Committee of Management of the Company on 31 October 2013 and this special purpose concise financial report has been authorised for issue by the Committee of Management of the Company on 12 November Statement of compliance and basis of preparation This concise financial report is a special purpose financial report, which has been prepared in accordance with the recognition, measurement and classification aspects of all applicable Australian Accounting Standards ( AASBs ) adopted by the Australian Accounting Standards Board ( AASB ). The special purpose concise financial report has been prepared in accordance with AASB 1039: Concise Financial Reports. The financial statements and other specific disclosures are an extract of, and have been derived from the full special purpose financial report of LINK Community Transport Inc for the year ended 30 June Other information included in the concise financial report is consistent with the Company s full special purpose financial report. The concise financial report does not, and cannot be expected to, provide as full an understanding of the financial performance, financial position and financing and investing activities of the Company as the full special purpose financial report. A hard copy of the Company s 30 June 2013 special purpose financial report, including the independent audit report, is available upon request. A discussion and analysis of the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year ended 30 June 2013, along with the statement of financial position as at that date is included in the Treasurer s Report on pages 1 to 2. The special purpose financial report upon which this special purpose concise financial report is based, does not include the disclosure requirements of all AASBs having a material effect, except for the following minimum requirements: AASB 101: AASB 107: AASB 108: AASB 1031: AASB 1048: AASB 1054: Presentation of Financial Statements Statement of Cash Flows Accounting Policies, Changes in Accounting Estimates and Errors Materiality Interpretation and Application of Standards Australian Additional Disclosures A full description of the accounting policies adopted by the Company may be found in the Company s full special purpose financial report. These accounting policies have been applied consistently to all periods presented in the financial statements. The concise financial report is prepared on the historical cost basis in Australian Dollars. (a) Use of judgments and estimates The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. 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 and in any future period affected. LINK Community Transport Annual Report 12/13 06

8 Notes to the Financial Statements (Continued) For the year ended 30 June Statement of compliance and basis of preparation (continued) (b) Going concern The financial report has been prepared on the going concern basis which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business. The Company has cash and cash equivalents at 30 June 2013 of $211,658 and current term deposits of $635,769 and its liabilities include deferred income of $185,369 which will result in cash outflows post 30 June The Company receives annual grants from the State Government of Victoria under a 3 year funding agreement which expires 30 June 2015, the amounts of which are set out in Note 5 Revenue for the year ended 30 June 2013 as set out in the full special purpose financial report. The Committee of Management is confident, based on the Company s ongoing collaboration with the State Government and the establishment of Disability Care, that sufficient revenue will be derived beyond 30 June 2015 which will ensure the continuity of normal business activities in future years. LINK has also received positive responses for their internally developed Travel Training programs and has secured several contracts for the 2014 financial year, and expect that this will reduce the Company s dependence on grant funding. In addition, the Committee of Management are satisfied that in the event there are changes to the quantum of funding secured in future years, the Company is able to plan and manage its operational expenditures within the capacity of confirmed funding amounts, or to expand commercial activities to provide additional funding for the Company s future operations. (c) Income tax LINK Community Transport Inc has been granted exemption from Income Tax under Section 50-5 of the Income Tax Assessment Act (1997). (d) Subsequent events There has not arisen, in the interval between the end of the financial year and the date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Committee of Management of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years. 3. Prior period restatement The comparative financial statements for the year ended 30 June 2012 have been amended to remove a liability. The adjustment was recorded in order to reflect the amount as a contingent liability rather than a provision, consequently, the retained earnings at 1 July 2011 was understated by $68,803 and the liabilities were overstated by $68,803. As a result of this adjustment, the prior period financial statements have been restated to reflect the revised retained earnings and liability. Statement of comprehensive income Previously disclosed 30 June 2012 Restatement Restated 30 June 2012 Other liabilities $68,803 ($68,803) - Retained earnings $1,382,848 $68,803 $1,451,651 Statement of changes in equity Previously disclosed 1 July 2011 Restatement Restated 1 July 2011 Retained earnings $1,385,282 $68,803 $1,454, LINK Community Transport Annual Report 12/13

9 Committee of Management Declaration In the opinion of the Committee of Management of LINK Community Transport Inc ( the Company ): (a) the Company is not a reporting entity; (b) the accompanying concise financial statements and notes, set out on pages 3 to 7: i. are derived from or are consistent with the full special purpose financial report for the year ended 30 June 2013; and ii. complying with Australian Accounting Standard AASB 1039 Concise Financial Reports to the extent described in Notes 1 and 2; and (c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of the Committee of Management. Robert Purcell Chairman Committee of Management Trevor Spicer Treasurer Committee of Management Melbourne 12 November 2013 LINK Community Transport Annual Report 12/13 08

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