ANNUAL REPORT. Me! Phoenix works for

Transcription

1 ANNUAL REPORT Phoenix works for Me!

2 Our foundation Phoenix exists to employ, train and develop people with disabilities to attain an improved quality of life. Our purpose Phoenix will be an innovative and dynamic employer of people with disabilities, that operates successful commercial businesses and provides outstanding opportunities for the development of its greatest asset its people Our values Phoenix will Respect the needs and aspirations of each other. Be caring, honest and truthful with each other, our customers and the public. Be tolerant and understanding, always acting with dignity and treating others equally. Maintain the privacy of all associated with Phoenix. Foster growth and prosperity of Phoenix through teamwork. Promote excellence in customer service. Resolve issues quickly, equitably and professionally. Be proud of, and help the public understand, what we do. Be respectful of the environment and be aware of our impact on the earth s natural resources. Contents 02 Chairman s Report 04 Year in Review 06 Our People 10 Commercial 0perations 18 Human Resources 20 Awards Feature 22 Financial Statements

3 Phoenix works for Me! Dear Supporter Again may I extend my gratitude to your ongoing support of Phoenix. The Society continues to deliver outstanding outcomes to our employees through the application of additional resources into training, education, e-training and school to work programs. But all of this comes at a cost and this has been a very difficult year financially for the Society. The current trading environment is difficult for all businesses at present and we certainly are not excluded from this. In recognizing this we have invested for the future and expect that we will return to a positive financial position quickly. Importantly our employees and the programs we operate continue to grow and deliver positive outcomes. Again, on behalf of our 500 employees, thank you for your continual support and I trust that you will enjoy reading our Annual Report. You are making a difference. Yours sincerely Ian M Terry Chief Executive Officer ANNUAL REPORT

4 CHAIRMAN S REPORT The most pleasing aspect of my report this year focuses on the outcomes that we have been able to provide for people with disabilities our core purpose for existing. In June this year, we were able to achieve employment for 500 people with disabilities. This is a great milestone for the organisation and a key target in our strategic plan. However to maintain employment levels and continue to grow them requires the Society to be financially strong. Unfortunately, this past 12 months has been a challenging financial period for the Society in general. In what continues to be a difficult trading market, the Society incurred a deficit of 442,149. Whilst there were a number of reasons for this including initial costs that lead towards investment for the future, the Society cannot sustain deficits of this magnitude and the Board and Management have acted to ensure that we return to a positive financial position. This aside, Phoenix remains financially sound with a strong cash position and balance sheet and clear plans on how we will improve operations for the future. Corporate Governance is a key component of the Board operations and our established Audit & Risk Committee, Public Relations and Marketing Committee supported by our Board Advisory Group are now working quite efficiently to help direct and steer the organisation forward in supporting management to further safeguard and develop the organisation in the longer term. A further key component of our Corporate Governance is the development of solid succession planning for the management group of the Society. Working in consultation with the Chief Executive, a number of management changes have transpired over this past 12 months and internal structures put in place that ensures that we have a solid platform from management moving forward. As a board we will continue to develop succession planning at both Board and management level. It was disappointing that during the year our Board member, Mr Leon Andrewartha, resigned from the Board after many years of valuable service. At the same time, however, I welcomed two new Board members in Mr Donald McGurk, Managing Director and Chief Executive Officer of Codan and Mr Ian Stone, Group Managing Director at the RAA. Both of these gentlemen bring a wide depth of knowledge that will be to the advantage of Phoenix for many years to come. It was good to see that the Federal Government this year committed within the budget announcement 1billion towards a trial of the National Disability Insurance Scheme (NDIS). Phoenix, like most within the disability industry, firmly believes that the NDIS, when fully implemented, will create substantial change for people with disabilities. We look forward to the outcomes of the trials over the next couple of years and wait with anticipation for the introduction of the legislation to fully fund and develop the NDIS in years to come. Albeit, with the difficult financial year that we have had, we still remain firmly committed to the further development of our school to work transition program, our e-training program and the development of further education for our employees in advancing their vocational aspirations. Management has worked with Government to find a means of funding for our school to work program, albeit without success. We will continue to pursue this including developing our own specialised funding stream through our new fundraising ventures specifically aligned to school to work ANNUAL REPORT CHAIRMAN S REPORT

5 We again recognise the support that is provided to us through the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA). Without their support our organisation would struggle to exist. We do express our disappointment, however, at the lack of recognition of appropriate indexation of our funding that over the years has diminished in real value. At a time when prices continue to escalate and salaries and wages continue to grow, for the Government to not adequately recognise the level of indexation continues to disappoint us and adds further financial pressure to our ability to provide the services for which we exist. One of the constraints on employing more people is insufficient Government funding. Phoenix, as an Australian Disability Enterprise, works within a capped funding program that places limitations on our ability to expand opportunities to people with a disability. We would certainly encourage a removal of this capping as the cost to Government to support Phoenix employees is economical, providing good returns on investment while Phoenix is able to match the funding 3:1 with commercial income and fundraising. Benefits that arise to Government through our employment model includes, reduced pension payments and increased tax returns, the multiplier effect of greater disposable income for our people, savings on the reduction of other Government funded support programs, along with the social and economic benefits to our employees and their extended families. I would again like to thank the Women s Auxiliary for the tremendous effort that they put in to supporting Phoenix Society each and every year. This year the Women s Auxiliary provided 20,000 to support our employees and to improve their working lives. This group continues to do their work without a lot of fanfare but in the knowledge that their efforts are making a difference to our people. I again extend my gratitude to Telethon for their ongoing support and recognition of Phoenix Society as a member of the Telethon group of charities. Our involvement with Channel 9 Telethon continues to be a major part of our fundraising program and I extend my thanks to the Board and staff of Channel 9 Telethon for their ongoing commitment and support towards the ideals of Phoenix. From an international perspective, Phoenix continues to support the ideals of Workability International and the development of employment for people with disabilities throughout the world. At the same time we continue to provide mentoring services to Daybreak in Malaysia. It is important that we continue to share our expertise both nationally and internationally as we do our bit to develop opportunities for an expanding group of people with disabilities. It has been a challenging year for Phoenix and I extend my thanks to my fellow Board members and the Phoenix management group for their commitment and effort during this time but it is important that as a group we work even closer over the next 12 months to ensure that we return Phoenix to profitability whilst still maintaining the highest standard of employment outcomes for people with disabilities. Dr Graeme Bethune Chairman CHAIRMAN S REPORT ANNUAL REPORT

6 Phoenix this year maintained its commitment to implementing the strategic directions of the organisation. The strategic plan of will ensure that the organisation continues to grow, provide employment, be financially successful and remain a leader in its field nationally. Particular emphasis this year was on employment growth and it was pleasing that we were able to achieve 500 employees by 30th June. This is the highest number of employees the organisation has ever had and when we couple that with the support that we provide through our school to work program, our e-training program and general support then well in excess of 800 employees have been supported by the organisation over the past year. Unfortunately this outcome has come at a cost and the financial result for the year was a loss, in what has been a difficult trading market, and it is incumbent upon management to ensure that we return to profitability over the next 12 months. We made a number of changes through our management structure during the year with a view to strengthening the organisation moving forward. We have appointed Geoff Brogan as General Manager across three facilities, being Elizabeth, Torrensville and Post Haste. This, underpinned by Production Managers at each of these facilities, has given us a solid structure in which to advance these divisions in the future. Post Haste underperformed during the year and accordingly management has now been restructured. We are currently working through a review of Post Haste, to ensure that its future is strong. We have made changes in our General Management of Finance bringing Peter Clayfield into the organisation, who I am more than confident will provide sound financial advice to myself and the Board. We are in the process of making changes to our Sales and Marketing structure. We are looking to appoint a Sales and Marketing Executive in the near future and to restructuring our sales division to improve professionalism and efficiencies that will see the development of our operations. We have expanded our Marketing programs with a view to enhancing both the image of Phoenix and also our Public Relations exposure. Whilst these programs do take time, it will ultimately create greater recognition for the organisation to the businesses and the general community with whom we work. During the year we made a decision to appoint a Manager of Community Relations with a view to developing our fundraising programs in the years ahead. We expect that through our fundraising efforts that we will be able to develop funding for our school to work program and also our e-training program that will ensure that we provide more outcomes for people with disabilities in the future. The Gepps Cross division had a solid year in operating performance. Whilst it did lose a major customer we were able to offset this income loss by equal cost reduction. We have also been able to bring in new contracts and as a result Gepps Cross had a better than expected result. Our Elizabeth facility also had an improved year with a particular improvement in our labelling business which saw a 30% increase over the previous year. We continue to work in difficult markets both in automotive and wine which struggle with a declining export market but against this trend we have been able to employ more people for the Elizabeth facility, enhancing the opportunities for people with disabilities in the Northern region. The Whyalla facility had a solid year and we expanded into more work external to our factory environment. We employed more people within Whyalla and have now expanded our services further into the Eyre Peninsula region through new contracts in our maintenance operations ANNUAL REPORT YEAR IN REVIEW

7 YEAR IN REVIEW Changes in management at our Torrensville facility has led to an improvement in the general operations in this facility. Our customer confidence appears to be on the rise and we have secured new contracts that are leading to some longer term gains. We are currently reviewing this site to improve the logistics, in particular the storage requirements for this division and I expect that in the next couple of years this will transpire. With the first full year at our Contact Centre at Mawson Lakes, this has now settled down into a successful operation where we have now filled half of the seats available at the Contact Centre and continue to source new opportunities, particularly in the areas of lotteries but also in other programs that will provide a mixture of work and greater variety moving forward. We are about to embark on the implementation of a new database system, that will complement all of our programs and which will create greater efficiencies and understanding of our supporters. This year we placed particular emphasis on the training of many of our staff throughout the organisation, many whom have completed Diplomas in Management, Certificate 4 in Sales and Marketing and Certificate 3 in Disability Services. Through this continual investment into our staff we will see the organisation strengthen as the experience is gained by our people, that leads to support of people with disabilities. We continued to meet all of our recognised standards over the past year in terms of financial, quality, disability and safety, all of which have been highly audited and all of which have come through with very positive outcomes. Our electronic systems that we have now put in place has created greater transparency of information ensuring that we can provide better information about all of our employees and all of our systems that will assist us to provide better outcomes for the future. In what has been a challenging 12 months I must acknowledge the support of the Board, staff, employees and the management of Phoenix who have given so much that has resulted in positive outcomes for our employees. While the past year has been difficult financially I am confident that with the support of all parties and with the actions that we have already taken that the next 12 months will be financially solid and at the same time continue to provide great outcomes for people with disabilities. Ian M Terry Chief Executive Officer YEAR IN REVIEW ANNUAL REPORT

8 Board Members Audit & Risk Committee Dr Graeme Bethune Chairman B Ec (Hons), PHD, FCPA, FAICD Chief Executive Officer EnergyQuest Board Member of the Australian Gas Industry Trust and University of Adelaide Business School Advisory Joined the Board in 2000 A/Prof Bill Griggs, AM ASM Deputy Chairman MB, BS, MBA, Dip Av Med, FANZCA, FJFICM, FPA, FAICD Director of Trauma Services Royal Adelaide Hospital Board Member of Motor Accident Commission, Super SA and St John Ambulance SA Joined the Board in 2008 Mr Marc Makrid BBus (Mkt) Managing Director Marc Makrid & Associates Board Member of Seeley International, Campion Education, Love Energy, Neutrog Fertilisers, Tristar Electrical, Cold Logic Industrial Refrigeration, Angelakis Seafood, Mitani Foods and Westminster School Joined the Board in 2008 Amanda Heyworth Chair Mervyn Chappel Ian Little Marketing & Public Relations Committee Graeme Bethune Chair Lyn Breuer Marc Makrid Bill Griggs Remuneration Committee Hon Lyn Breuer, MP Speaker, House of Assembly (SA Parliament), Member for Giles (ALP) Board Member of Career Employment Group (CEG) and Reconciliation SA Joined the Board in 2009 Mr Mervyn Chappel ACA, CA (SA), FCMA, PMD (Harvard), B.Com Retired General Manager Joined the Board in 2008 Ms Amanda Heyworth BA (Acc), MBA (AGSM), SF Fin, FAICD Executive Director Playford Capital Board Member of Playford Capital Pty Ltd, Ingenia Communities Group Limited, SA Lotteries, Itek Ventures Pty Ltd, echannel Online Pty Ltd, Waterfind Pty Ltd and the Commonwealth IT Industry Innovation Council Joined the Board in 2009 Graeme Bethune Chair Bill Griggs Ian Little Mr Ian Little Mr Ian Stone Mr Donald McGurk CA, BCA, MBA, MAICD Managing Director Envestra Board Member of Envestra group companies and Australian Gas Industry Trust Joined the Board in 2010 BEc, CA Group Managing Director RAA Board Member of Australian Automobile Association (AAA), Australian Motoring Services Pty Ltd, AMS Rewards Pty Ltd, Assist Australia Pty Ltd, AAA Tourism Pty Ltd, A Two Four Pty Ltd, Club Consortium Pty Ltd, AAA Travel Pty Ltd, RAA Insurance Holdings Ltd and RAA Insurance Ltd Joined the Board in 2011 HNC (Mech Eng), MBA, GAICD Managing Director & Chief Executive Officer Codan Limited Board Member of South Australian Government s Advanced Manufacturing Council Joined the Board in ANNUAL REPORT OUR PEOPLE

9 OUR PEOPLE Patron His Excellency Rear Admiral Kevin Scarce AC CSC RANR Governor of South Australia Management Group Vice-Patron Mr Michael Evans Ambassadors Ms Ali Carle Mr Brenton Ragless Employee Representative Committee Mr Ian Terry Chief Executive Officer Mr Robert Styling, AFSM OAM General Manager, Human Resources Mr Peter Clayfield Chief Financial Officer Robert Styling Chair Ian Terry Peter Byrne Patrick Chandler Jarrod Clarkin Michelle Smith Stephen Taylor Simone Tsiaoussidis Anthony Turner Andrew Herewane Mr Geoff Brogan General Manager Industrial Services & Post Haste Mr Jeff Goodall General Manager Timber Services Mr John Davis General Manager Whyalla Mrs Jane Doyle General Manager Phoenix Connect Mr Manny Tabone Engineering Manager OUR PEOPLE ANNUAL REPORT

10 OUR PEOPLE Honorary Life Governor 1977 Mr GM Reid, MBE Honorary Life Members 1973 Mr RE Carter, OBE, MM, 1974 Miss DJ Forward 1975 Mrs C Marks 1975 Mr LA Polkinghorne 1976 Mr GM Soper 1978 Miss G Dickson 1978 Miss B Sandford 1978 Mr JH Trenerry 1978 Mr JBL Tucker 1979 Mr AW Burnell 1979 Miss M Kither 1979 Mrs VJ Maurice 1979 Mrs BD Morish 1979 Mrs JH Reid 1980 Mr JJ Barber 1980 Mr G Templer 1982 Rev GH Young 1984 Mr RR Martin 1987 Mr JB Hastwell 1987 Mrs CE Rushby 1988 Mr IC Snaith 1989 Mr SG Hocking 1991 Mr KC Rogers, OAM 1992 Mr RA Footner, AM 1996 Dr AB Black, OAM 1996 Mrs ED Kosmala, OAM 1997 Mrs EE Bone 1997 Mr WJ Stamm, AM 2002 Mr KF Kelly, AM 2008 Mr AB Robins, OAM 2008 Mr PG White 2008 Mrs CM Brown 2008 Ms VK Bryant 2008 Mr RJ Styling, AFSM OAM 2008 Mr JC Goodall Past Presidents Sir Herbert Mayo Mr GM Reid, MBE Previous Chairmen Dr DM Williamson Mr GM Reid, MBE Mr JBL Tucker Mr G Templer Mr RA Footner, AM Mr WJ Stamm, AM Mr KF Kelly, AM Mr AB Robins, OAM Women s Auxiliary Life Members 2003 Mrs M Hayward 2011 Mrs C Heard Mrs K McCurdie Mrs P Wagner ANNUAL REPORT OUR PEOPLE

11 OUR PEOPLE ANNUAL REPORT

12 COMMERCIAL OPERATIONS 10

13 11

14 Gepps Cross This year saw another solid performance from the Gepps Cross operations. In what continues to be a difficult market, with growing competition from overseas imports, it was pleasing that we were able to perform above expectation. As a consequence of overseas competition, we were saddened that we lost a major customer in Steinhoff Australia who moved their operations to Sydney. Steinhoff has been a long term customer of Phoenix Society and it is sad that through no fault of our own, we lose a customer of this ilk. As a result, we were able to make some adjustments in-house to offset the loss and have refocussed our attention into other markets that are developing new opportunities for our employees. Pleasingly during the year we were able to increase our employee numbers for this facility which has assisted in overcoming the shortage of production hours that we were facing. We have imparted more tailored training to our employees and have also commenced additional in-house training for staff on a regular basis. We continue to focus and develop the in-house environmental program and have again improved our operating systems. Safety and quality continues to be of prime importance and pleasingly we had a relatively safe year for all of our employees. We are confident about the future, albeit that we continue to work in a very difficult trading environment but we believe that we will be able to capitalise on new market opportunities that will see us improve moving forward. More tailored training for our people on a regular basis ANNUAL REPORT COMMERCIAL OPERATIONS

15 Torrensville Early in this financial year, we made a significant change to the management structure of the Torrensville operations. The appointment of Geoff Brogan to manage both the Torrensville and Elizabeth facilities enabled us to develop our Production Managers at each of these facilities to manage the day-to-day operations. As a consequence we were able to review the operational practices of the Torrensville facility and have improved housekeeping, production efficiencies, environment programs and the overall general operations. Importantly, we have encouraged staff development and leadership and imparted trust and respect through all of our people for this facility. It has turned out to be a good year for Torrensville as new contracts have come on board that have led to a solid performance and growing optimism for the future. We strengthened our customer liaison and are building on that customer confidence to engage new contracts that will lead to more employment. In what is an aging building, we have undertaken to improve the overall facility and we are looking at ways in which we can further develop the Torrensville facility for the longer term future. We will certainly be looking at this over the next 12 months to identify how we can do this within our limited resources. It has been a credit to the management and staff of this facility that we have been able to improve the morale of our people and to have improved relationships between all employed at the facility that has led to a much more enjoyable working environment with a positive feel. Importantly, customer relationships have improved with a particular emphasis on improvement in quality and delivery dates of our product to ensure our customer needs are met and enhanced. This commitment from all concerned will see Torrensville operations continue to develop into the future as new contracts continue to evolve. New contracts have led to a solid performance and growing optimism. COMMERCIAL OPERATIONS ANNUAL REPORT

16 Elizabeth There has been a greater emphasis this year on the engagement of more employees for this facility. We have developed new jobs for people within the region and we have been able to generate sales requirement to engage these new job opportunities. Our labelling business certainly produced a substantial improvement this year. As we continue to develop good customer relations in this market, there are exciting opportunities awaiting us in the future. Our relationship with General Motors Holden also continues to expand and the efficiencies that we are creating are ensuring that this contract is working successfully for both ourselves and our customer. Our relationship with Electrolux continues to grow and this is a key area of output for the Elizabeth facility meeting both ours and our customer s operational needs. Considerable time and effort has gone into improving attendance and the hours of employment for our employees and together we have been able to improve our culture of working together for the best outcome for the organisation. The morale of the facility has improved substantially this year and this is a result of work opportunity coupled with the additional training programs that we have imparted to our people and the inclusion of people in the decision making processes. Our relationships continue to expand, driving efficiencies and employment in the region. We continue to improve the quantity and quality of work opportunities for this facility by finding new challenging and worthwhile work. We have made some changes to our supervision structures that are starting to reap good dividends and have paid particular attention to our housekeeping and safety to ensure that our employees are protected at all times and are operating under the most efficient and enjoyable working conditions. There are more opportunities awaiting this facility and we look forward to the future with excitement that we will continue to grow this operation and deliver the outcomes that we all expect. The future looks extremely positive with plans in place for continued investment, sales growth and beneficial outcomes for all our customers and most importantly, our people ANNUAL REPORT COMMERCIAL OPERATIONS

17 Post Haste The most difficult of all our operations over this past 12 months has been the Post Haste printing and mailing division. Post Haste has undergone substantial change, particularly in the area of management. With the retirement of the previous General Manager, of 19 years, a new General Manager was engaged who, after 6 months, elected to leave, taking up a new opportunity. The change in leadership has led to complications, lowering of morale and confusion amongst our people as to the direction that Post Haste was heading. Early in 2012 the General Manager role of Geoff Brogan was expanded over the third facility in Post Haste and a Production Manager was appointed for the Post Haste division. With a staffing restructure we have now set about rebuilding the confidence levels of Post Haste with our staff, employees and, more importantly, with our customers. We have some work to do at Post Haste but we know what the challenge is and we are well underway in achieving what we want to do. The Post Haste market continues to be a difficult one as we see Australia Post mailings drop by 5% and it is incumbent on us to establish new market opportunities for which we can grow the Post Haste operation. We are currently undertaking a review of Post Haste to see what it will look like for the future and it is exciting that many of the changes that we have already embarked upon are taking effect and resulting in positive impact. We know we have got work to do in this environment but we are up to the task and it will be fixed. During the year we lost two major customers in Mitsubishi and Messenger Press, neither through any fault of our operations but through changes in their own marketing programs to remove the need for the product that we were supplying. These were substantial contracts and it is not easy to find replacements quickly to cover these but we are well underway to finding numerous contracts that will ultimately cover the loss and hopefully expand on the operations in the future. We are confident that Post Haste will come through this difficult period. Change is always difficult but the staff and employees at Post Haste have continued to offer support to management as we impart this change in developing this terrific part of our organisation. With a staffing restructure we have now set about rebuilding the Post Haste brand. COMMERCIAL OPERATIONS ANNUAL REPORT

18 Whyalla This was another good year for the Whyalla division. Whilst demands for our services in the first part of the financial year were quite low, the remainder of the year produced results well in line with our expectations. Early in the year we restructured some of our staffing with the engagement of a Production Coordinator and the addition of another Supervisor. With more employees at Whyalla, it was necessary that we have the right supervision in place to ensure that we had a solid and safe working environment. There was greater emphasis placed this year on outside property maintenance work and we have added to our work crews to undertake new contracts including that of Telstra to undertake their property maintenance work throughout the Eyre Peninsula. We secured new contracts including Telstra maintenance work throughout the Eyre Peninsula. We invested in new equipment to make work easier and trained our employees on how to use some of this equipment in their daily work environment. We expanded some of our services into the area of heat press embossing to complement our embroidery services and provided further training to our employees in undertaking logo design work. We are now undertaking additional work, transferred from the city, which has enabled our employees in our factory to be kept more active and more productive. We are working with more customers in the town of Whyalla to expand the range of services that we are providing and this is leading to greater opportunities for our people. During the year we were quality certified under the ISO Standards, bringing Whyalla in line with the rest of the Phoenix operations ANNUAL REPORT COMMERCIAL OPERATIONS

19 Our continued efforts ensure we can continue to deliver much needed funds for our operations. Phoenix Connect After moving our contact centre to Mawson Lakes in February 2011, this was our first full year within the new premises. It has been a very successful move that has seen us develop new lottery programs for Phoenix lotteries and also for those of our third party customers. As a consequence of our move and the additional resources that we have available to us we have been able to expand the size of our own lotteries and have been able to embrace new opportunities as and when they have arisen. During the year we increased both our Lots O Loot and Lucky Cash lotteries where the first prizes were 100,000 in each of these lotteries. It was a great feeling to be able to present to the prize winners a cheque for 100,000 which significantly changed their lives. Whilst we use our lotteries to raise much needed funds for our training and development and our capital needs, it is always nice when we can actually present a supporter with a substantial prize as a result of their contribution. During the year we added additional lotteries for Animal Welfare League, Police Association, Woodville West Torrens Football Club and expanded the Adelaide and Port Adelaide Football Clubs and Asthma Foundation Lotteries. Fundraising continues to be a difficult market but through our new contact centre, and the effort of all of our staff is ensuring that we continue to achieve the income needed that ensures that we can continue to deliver the much needed funds for our operations. Outside of our lottery campaigns we also continued donation work for Australian Breast Cancer Research and also entered into campaigns with Repco and the Royal District Nursing Society (SA). These individual campaigns have complemented our existing business. Phoenix Connect was accredited to ISO 9001 during the year. This was a credit to the systems, procedures and management of the facility. During the year we expanded our technology services for Phoenix Connect, entering into a partnership with Post Haste to provide print on demand service for our Phoenix and third party lotteries. Phoenix Connect is now filling half of its seats and we look to expand that over the next few years as new contracts come onboard, we continue to improve our methods of operations and will be looking to install a new database system over the next 12 months that will lead to even more efficiencies for the future. Phoenix Connect certainly has a future for the organisation. As a commercial operation it will continue to develop new funds for our services and we thank all of the patrons who continue to support our lotteries diligently, in the knowledge that they are making a difference to people with disabilities. COMMERCIAL OPERATIONS ANNUAL REPORT

20 HUMAN RESOURCES, TRAINING & DEVELOPMENT This year has seen a major drive towards the implementation of the strategic directions of the organisation in relation to the services that we provide for people with disabilities. In particular, our focus has been on employee growth and it is pleasing that we were able to achieve 500 employees by 30th June. Our People A clear objective of the Society is to provide people with disabilities the opportunity for employment. We increased our employee numbers during the year by 28, achieving the milestone of 500 by the end of the year. Importantly, as a part of this growth, we were able to increase the success rate of the employment of people with mental illness and we were also able to increase the retention rate of new employees by some 11% over previous years. Schools Program Whilst considerable effort has gone into discussion and negotiation with government departments, we find that we are still having to fund this very successful program ourselves and in doing so, in a very challenging financial time, it is testing our resources. We certainly look forward to developing our own fundraising mechanisms for this program over the next 12 months but also to continuing the dialogue with Government in anticipation that they will ultimately recognise the need to fund this program. Many schools were involved in the program in this last 12 months and since its inception the program has created employment for 159 students who either remain as employees of Phoenix or have gone on to other employment career choices. From our schools program, we have also developed a high support training program in recognising those employees who otherwise would be placed in day options and for whom, we believed, employment was a possibility. We have introduced 26 students into this program and 25 of those have been able to successfully continue employment, albeit with additional support. This is a tremendous outcome for people who may otherwise be unable to enter the employment system. e-training A new initiative that we introduced last year was to run pilot programs on computer skills training. We ran two programs where we introduced a number of our employees into the world of computers, teaching them how to operate a computer and how to use the technology for internet, s, communications, etc. This has been an extremely successful outcome. The employees who have participated, many of whom could not read or write, have really enjoyed the experience and are now using computers in their own day to day lives. We certainly see this as an opportunity to expand some training for the future and as an aid to developing literacy and numeracy skills that will aid them in their daily vocation. Systems A particular emphasis over the past 12 months has been the development of our electronic systems. Our electronic support records are now fully operational across all of our sites, providing better monitoring of individual support provided and therefore assisting in making our organisation ready for the future introduction of a National Disability Insurance Scheme. Our first aid reporting is now computer based allowing us to be able to capture relevant and usable data that will assist us to improve our procedures and safety for our employees. Our internal audit system is now online, also allowing for better reporting, traceability and system control. We are now able to provide better investigation and follow up of areas that require improvement throughout our system and the controls that come with this ensure that nothing is missed along the way ANNUAL REPORT HUMAN RESOURCES

21 Safety The electrification of our systems has enabled us to put better controls in place for our safety programs. We have seen a significant reduction in injuries across all sites due to our better workplace health and safety programs and better monitoring. Training This year we have made an even greater commitment to training of all of our people. All of our employees with disabilities are now provided both on and off the job training at much greater levels than previous years and we are starting to develop greater Employee Numbers competencies amongst our employees whose goals are being recognised and skills 600 are being developed that meets the needs of the organisation and individuals. 500 During the year we have made particular emphasis to develop many of our staff who have completed various training 400 qualifications including Diploma in Management, Sales and Marketing Certificate 4, Training and Assessment 300 Certificate 4 and Certificate 3 in Disabilities. This commitment to the training of our 200 people is certainly going to stand the organisation in good stead as we continue to develop our people for the growing needs of the organisation HUMAN RESOURCES ANNUAL REPORT

22 AWARDS FEATURE The Gordon Reid Medallist Dean Elix Torrensville Sponsored by the Gordon Maxwell Reid Trust Fund Employee of the Year Awards Raymond Kleyer Torrensville Sponsored by the Rotary Club of Thebarton Daniel Kiesau Gepps Cross Sponsored by the Rotary Club of Campbelltown Haylee Cunningham Elizabeth Sponsored by Plan 4 Financial Services James Babidge Whyalla Sponsored by the Rotary Club of Whyalla Most Improved Employee Awards Sponsored by the Phoenix Women s Auxiliary Dieter Roether Post Haste Adam Freeman Gepps Cross Hiren Sloper Elizabeth Matthew Woodlands Whyalla ANNUAL REPORT AWARDS FEATURE

23 Special Merit Awards Sporting Achievement Award Timothy Naylor-Vane Torrensville Susan Heppner Whyalla Jye Parry Elizabeth Ashley Gomersall Elizabeth Sponsored by the Esmé Bone and Belinda Marie Winter Trust Funds Sponsored by the RT Patterson Fund Sponsored by the Jim Griggs Memorial Trust Sponsored by the Port Adelaide Football Club OHS&W Awards Bianca Babidge Whyalla Marian Crawford Elizabeth Irene Salagaras Torrensville Robert Johnson Gepps Cross Sponsored by OneSteel Whyalla Sponsored by the Firebird Committee Sponsored by the Rotary Club of Kidman Park Sponsored by the RT Patterson Fund Environment Awards Sponsored by Kiwanis Club of Rostrevor-Campbelltown Douglas Parkes Torrensville Brenton Henschke Elizabeth Mark Fisher Gepps Cross Michael Heald Whyalla AWARDS FEATURE ANNUAL REPORT

24 22

25 ANNUAL FINANCIAL STATEMENTS 23

26 Statement of Comprehensive Income for the year ended 30 June 2012 Note INCOME Revenue 2 16,592,548 15,221,900 EXPENSES Employee Benefits Expense (9,107,686) (9,028,805) Depreciation and Amortisation Expense (830,696) (629,338) Operating Lease Expense 3 (432,174) (411,056) Other Expenses (6,644,285) (5,457,021) Finance Costs 3 (19,856) (31,104) PROFIT/(LOSS) FOR THE YEAR (442,149) (335,424) OTHER COMPREHENSIVE INCOME Net Gain on Revaluation of Assets - 5,563,365 OTHER COMPREHENSIVE INCOME FOR THE YEAR - 5,563,365 TOTAL COMPREHENSIVE INCOME FOR THE YEAR (442,149) 5,227,941 The accompanying notes form part of these financial statements ANNUAL REPORT ANNUAL FINANCIAL STATEMENTS

27 Statement of Financial Position as at 30 June 2012 Note CURRENT ASSETS Cash and Cash Equivalents 4 1,189, ,763 Trade and Other Receivables 5 1,688,594 1,551,204 Inventories 6 418, ,615 Other Financial Assets 7 2,000,000 2,518,593 Other Current Assets 8 54, ,203 TOTAL CURRENT ASSETS 5,350,675 5,404,378 NON-CURRENT ASSETS Property, Plant and Equipment 9 14,565,307 15,004,256 TOTAL NON-CURRENT ASSETS 14,565,307 15,004,256 TOTAL ASSETS 19,915,982 20,408,634 CURRENT LIABILITIES Trade and Other Payables 10 2,306,028 2,215,606 Borrowings , ,207 Provisions , ,129 TOTAL CURRENT LIABILITIES 3,179,453 3,019,942 NON-CURRENT LIABILITIES Borrowings ,200 Provisions , ,076 TOTAL NON-CURRENT LIABILITIES 209, ,276 TOTAL LIABILITIES 3,389,215 3,437,218 NET ASSETS 16,526,767 16,971,416 EQUITY Reserves 13 12,388,553 12,389,638 Retained Earnings 4,138,214 4,581,778 TOTAL EQUITY 16,526,767 16,971,416 The accompanying notes form part of these financial statements. ANNUAL FINANCIAL STATEMENTS ANNUAL REPORT

28 Statement of Changes In Equity for the year ended 30 June 2012 Retained Earnings Capital Funds Reserve Future Development Reserve Asset Revaluation Reserve Trust Funds Reserve Total BALANCE AT 1 JULY ,177,637 5,524, ,850 11,745,975 COMPREHENSIVE INCOME Profit for the Year (335,424) (335,424) Other Comprehensive Income for the Year ,563,365-5,563,365 TOTAL COMPREHENSIVE INCOME FOR THE YEAR (335,424) - - 5,563,365-5,227,941 TRANSFERS Transfer from Retained Earnings to Future Development Reserve Transfer from Retained Earnings to Trust Funds Reserve (1,257,879) - 1,257, (2,556) ,556 - TOTAL TRANSFERS (1,260,435) ,556 - OTHER Trust Fund Payments (2,500) (2,500) TOTAL OTHER (2,500) (2,500) BALANCE AT 30 JUNE ,581,778 5,524,488 1,257,879 5,563,365 43,906 16,971,416 COMPREHENSIVE INCOME Profit for the Year (442,149) (442,149) TOTAL COMPREHENSIVE INCOME FOR THE YEAR (442,149) (442,149) TRANSFERS Transfer from Retained Earnings to Trust Funds Reserve (1,415) ,415 - TOTAL TRANSFERS (1,415) ,415 - OTHER Trust Fund Payments (2,500) (2,500) TOTAL OTHER (2,500) (2,500) BALANCE AT 30 JUNE ,138,214 5,524,488 1,257,879 5,563,365 42,821 16,526,767 The accompanying notes form part of these financial statements ANNUAL REPORT ANNUAL FINANCIAL STATEMENTS

29 Statement of Cash Flows for the year ended 30 June 2012 Note CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers 12,540,827 11,924,466 Operating Grants Receipts 4,605,742 4,333,382 Bequests and Donations Received 259,377 78,247 Payments to Suppliers and Employees (17,442,826) (15,544,030) Interest Received 155, ,238 Interest Paid (19,856) (31,104) Sundry Income Receipts 220,521 78,090 NET CASH PROVIDED BY OPERATING ACTIVITIES ,129 1,035,289 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sale of Property, Plant and Equipment 259, ,004 Purchase of Property, Plant and Equipment (615,942) (1,504,116) Net Movement in Financial Assets 518, ,200 NET CASH USED IN INVESTING ACTIVITIES 162,397 (892,912) CASH FLOWS FROM FINANCING ACTIVITIES Payment of Borrowings (181,207) (169,959) Cost of Awards (2,500) (2,500) NET CASH USED IN FINANCING ACTIVITIES (183,707) (172,459) NET INCREASE/(DECREASE) IN CASH HELD 297,819 (30,082) Cash and Cash Equivalents at Beginning of Financial year 891, ,845 CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 4 1,189, ,763 The accompanying notes form part of these financial statements. ANNUAL FINANCIAL STATEMENTS ANNUAL REPORT

30 Notes to the Financial Statements for the year ended 30 June 2012 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PREPARATION The financial statements are special purpose financial statements prepared in order to satisfy the financial reporting requirements of the Associations Incorporation Act 1985 and Regulations and the Constitution of the Society. The Board has determined that the Society is not a reporting entity. 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, and apply the recognition and measurement provisions of the Australian Accounting Standards. The following significant accounting policies have been adopted in the preparation of this financial report. ACCOUNTING POLICIES a. Revenue and Other Income Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue. Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods. b. Income Tax No provision for Income Tax has been raised as the entity is exempt from Income Tax under Div. 50 of the ITAA Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. 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 components of investing and financing activities, which are disclosed as operating cash flows. d. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at-call with banks, other short-term highly liquid investments that are readily convertible to cash, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position. e. Inventories Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of standard costs. Interest revenue is recognised using the effective interest rate method, which for floating rate financial assets is the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established. Revenue from the provision of membership subscriptions is recognised on a straight line basis over the financial year. All revenue is stated net of the amount of goods and services tax (GST) ANNUAL REPORT ANNUAL FINANCIAL STATEMENTS

31 Notes to the Financial Statements for the year ended 30 June 2012 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES f. 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. Property Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm s length transaction), based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings. Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation surplus in equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity; all other decreases are charged to the statement of comprehensive income. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Plant and equipment Plant and equipment are measured on the cost basis and are therefore carried at cost less accumulated depreciation and any accumulated impairment losses. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(g) for details of impairment). The cost of fixed assets constructed within the Society includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Society and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets, including buildings and capitalised lease assets, but excluding Motor Vehicles Cars, is depreciated on a straight-line basis over the asset s useful life commencing from the time the asset is held ready for use. Motor Vehicles Cars are depreciated on a reducing balance method. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. Land is not depreciated. The depreciation rates used for each class of depreciable assets are: CLASS OF FIXED ASSET DEPRECIATION RATE Buildings 2.5% Plant and equipment 5% 50% Motor Vehicles Forklifts 10% Motor Vehicles Cars 22.50% The assets residual values and useful lives are reviewed and adjusted, if appropriate, at each balance date. 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. When revalued assets are sold, amounts included in the revaluation relating to that asset are transferred to retained earnings. g. Impairment of Non-Current Assets At the end of each reporting period, the Society reviews the carrying values of its tangible 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. Any excess of the asset s carrying value over its recoverable amount is expensed to the statement of comprehensive income. Where it is not possible to estimate the recoverable amount of an individual asset, the Society estimates the recoverable amount of the cash-generating unit to which the asset belongs. ANNUAL FINANCIAL STATEMENTS ANNUAL REPORT

32 Notes to the Financial Statements for the year ended 30 June 2012 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES h. Financial instruments Initial recognition and measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Society commits itself to either purchase or sell the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs except where the instrument is classified at fair value through profit or loss in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement Financial instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Amortised cost is calculated as: (i) the amount at which the financial asset or financial liability is measured at initial recognition; (ii) less principal repayments; (iii) plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and (iv) less any reduction for impairment. The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss. (i) Financial assets at fair value through profit or loss Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of short-term profit taking, where they are derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss. (ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period, which will be classified as non-current assets ANNUAL REPORT ANNUAL FINANCIAL STATEMENTS

33 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Society s intention to hold these investments to maturity. They are subsequently measured at amortised cost using the effective interest rate method. Held-to-maturity investments are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period, which will be classified as current assets. (iv) Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either not capable of being classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. They are subsequently measured at fair value with changes in fair value recognised in other comprehensive income. Impairment of Financial Assets At the end of each reporting period, the Society assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in profit or loss. Derecognition of Financial Instruments Financial assets are derecognised where the contractual right to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. Available-for-sale financial assets are included in noncurrent assets, except for those which are expected to be disposed of within 12 months after the end of the reporting period, which will be classified as current assets. (v) Financial liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. ANNUAL FINANCIAL STATEMENTS ANNUAL REPORT

34 Notes to the Financial Statements NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES i. Trade and Other Payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Society during the reporting period, which remain unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. j. Employee Benefits Recognition is made for the Society s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may not satisfy vesting requirements based on historical data. Those cash outflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows. k. Provisions Provisions are recognised when the Society has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions recognised represent the best estimate of the amounts required to settle the obligation at the end of the reporting period. l. Leases Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to the Society are classified as finance leases. Finance leases are capitalised by recording an asset and a liability at the lower of the amount equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the Society will obtain ownership of the asset. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses on a straight-line basis over the lease term. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term. m. Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year ANNUAL REPORT ANNUAL FINANCIAL STATEMENTS

35 Notes to the Financial Statements for the year ended 30 June 2012 NOTE 2: REVENUE AND OTHER INCOME Revenue Sales Revenue: Sales 11,760,337 10,935,002 Other Revenue: Operating Grants 4,179,899 3,939,438 Bequests 151,000 8,000 Donations 108,377 70,247 Interest Received on Financial Assets 136, ,735 Sundry Income 256,084 85,478 4,832,211 4,286,898 Total Revenue 16,592,548 15,221,900 NOTE 3: EXPENSES FOR THE YEAR Expenses Interest Expense on Financial Liabilities 19,856 31,104 Remuneration of the Auditor of the Society for: Auditing the Financial Report 33,532 31,150 Financial Report Advice - 2,500 Compilation of Financial Report - 10,425 Total Remuneration of the Auditors 33,532 44,075 Rental Expense on Operating Leases: Minimum Lease Payments 432, ,056 Contingent Rentals - - Rental Expense for Sub-lease - - Total Rental Expense on Operating Leases 432, ,056 ANNUAL FINANCIAL STATEMENTS ANNUAL REPORT

36 Notes to the Financial Statements for the year ended 30 June 2012 NOTE 4: CASH AND CASH EQUIVALENTS Cash at Bank and in Hand 782,959 63,011 Short-Term Bank Deposits 406, ,752 1,189, ,763 NOTE 5: TRADE AND OTHER RECEIVABLES CURRENT Trade Receivables 1,392,560 1,291,531 Other Receivables 296, ,673 1,688,594 1,551,204 NOTE 6: INVENTORIES CURRENT At Cost: Raw Materials 282, ,919 Work in Progress 15,562 37,035 Finished Goods 120,839 49, , , ANNUAL REPORT ANNUAL FINANCIAL STATEMENTS

37 Notes to the Financial Statements for the year ended 30 June 2012 NOTE 7: OTHER FINANCIAL ASSETS CURRENT Held to Maturity Financial Assets 2,000,000 2,518,593 2,000,000 2,518,593 NOTE 8: OTHER ASSETS CURRENT Prepayments 54, ,203 54, ,203 NOTE 9: PROPERTY, PLANT AND EQUIPMENT Land at Independent Valuation 6,205,000 6,205,000 Buildings at Independent Valuation 5,190,000 5,190,000 Accumulated Depreciation (129,750) - 11,265,250 11,395,000 Plant and Equipment at Cost 8,080,286 7,892,075 Accumulated Depreciation (5,532,397) (5,005,225) 2,547,889 2,886,850 Motor Vehicles at Cost: 1,152,220 1,164,431 Accumulated Depreciation (400,052) (442,025) 752, ,406 Total Property, Plant and Equipment 14,565,307 15,004,256 ANNUAL FINANCIAL STATEMENTS ANNUAL REPORT

38 Notes to the Financial Statements for the year ended 30 June 2012 NOTE 9: PROPERTY, PLANT AND EQUIPMENT (CONTINUED) 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: Land and Buildings Plant and Equipment Motor Vehicles Total Balance at 1 July ,831,635 2,398, ,081 8,919,729 Additions - 1,121, ,400 1,504,116 Disposals - (185,084) (291,875) (476,959) Revaluations 5,563, ,563,365 Depreciation Expense - (447,796) (58,200) (505,996) Balance at 30 June ,395,000 2,886, ,406 15,004,255 Additions - 190, , ,942 Disposals - - (224,194) (224,194) Depreciation Expense (129,750) (529,169) (171,777) (830,696) Carrying Amount at 30 June ,265,250 2,547, ,168 14,565,307 ASSET REVALUATIONS Freehold land As at 30 June 2011 the freehold land held by Phoenix Society Inc was valued by an independent valuer. The fair value of the freehold land using fair value less cost to sell, based on an active market, was determined to be 6,205,000. The revaluation increment has been credited to the Asset Revaluation Reserve and recognised in the Statement of Comprehensive Income. Buildings As at 30 June 2011 the buildings held by Phoenix Society Inc were valued by an independent valuer. The fair value of the buildings using fair value less cost to sell, based on an active market, was determined to be 5,190,000. The revaluation increment has been credited to the Asset Revaluation Reserve and recognised in the Statement of Comprehensive Income ANNUAL REPORT ANNUAL FINANCIAL STATEMENTS

39 Notes to the Financial Statements for the year ended 30 June 2012 NOTE 10: TRADE AND OTHER PAYABLES CURRENT Trade Payables 908, ,980 Accruals 893, ,365 Employee Benefits 503, ,261 2,306,028 2,215,606 NOTE 11: BORROWINGS CURRENT Deferred Purchase Agreement 193, , , ,207 NON-CURRENT Deferred Purchase Agreement - 193, ,200 NOTE 12: PROVISIONS CURRENT Long Term Employee Benefits 680, , , ,129 NON-CURRENT Long Term Employee Benefits 209, , , ,076 ANNUAL FINANCIAL STATEMENTS ANNUAL REPORT

40 Notes to the Financial Statements for the year ended 30 June 2012 NOTE 13: RESERVES Capital Funds Reserve 5,524,488 5,524,488 Future Development Reserve 1,257,879 1,257,879 Asset Revaluation Reserve 5,563,365 5,563,365 Trust Funds Reserve: Education Trust Fund 7,706 7,463 Firebird Personal Development Fund 3,910 4,083 R Patterson Trust Fund 2,273 2,792 Belinda Winter Trust Fund 5,199 5,183 E E Bone Award Trust Fund 2,655 2,719 Gordon Reid Trust Fund 9,088 9,787 Jim Griggs Memorial Trust 11,990 11,879 Total Trust Funds Reserve 42,821 43,906 12,388,553 12,389,638 NOTE 14: CAPITAL AND LEASING COMMITMENTS OPERATING LEASE COMMITMENTS Non-cancellable operating leases contracted for but not capitalised in the financial statements Payable minimum lease payments: not later than 12 months 479, ,174 between 12 months and five years 1,120,694 1,600,612 greater than five years - - 1,600,612 2,032,786 The property lease commitment relating to the Post Haste premises at Thebarton is a non-cancellable operating lease with a ten-year term that commenced on 1 July Increase in lease commitments may occur in line with the Consumer Price Index (CPI). The property lease commitment relating to the Endeavour House premises at Mawson Lakes is a non-cancellable operating lease with a five-year term that commenced on 1 February Increase in lease commitments may occur in line with the Consumer Price Index (CPI). The digital black and colour printers and associated computer software commitment is a non-cancellable operating lease with a five-year term that commenced 15 July ANNUAL REPORT ANNUAL FINANCIAL STATEMENTS

41 Notes to the Financial Statements for the year ended 30 June 2012 NOTE 15: CASH FLOW INFORMATION RECONCILIATION OF CASH FLOW FROM OPERATIONS WITH PROFIT/(LOSS) Profit/(Loss) (442,149) (335,424) Cash flows excluded from profit attributable to operating activities Non-cash flows in profit: Depreciation 830, ,338 net gain on disposal of property, plant and equipment (35,551) (7,388) Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries: (increase)/decrease in trade and term debtors (137,390) 89,674 (increase)/decrease in prepayments 68,127 (23,213) (increase)/decrease in inventories (97,808) (2,136) increase/(decrease) in trade and other payables 90, ,007 increase/(decrease) in employee benefits 42, ,431 Net Cash Provided by Operating Activities 319,129 1,035,289 ANNUAL FINANCIAL STATEMENTS ANNUAL REPORT

42 Statement by the Board for the year ended 30 June 2012 Report by the Board for the year ended 30 June 2012 The Board has determined that the Society is not a reporting entity and that this special purpose financial report should be prepared in accordance with the accounting policies outlined in Note 1 to the financial statements. In the opinion of the Board: a) the accompanying financial report comprising the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Financial Statements, present fairly the results of the operations and the cash flows of the Society for the financial year ended 30 June 2012 and the state of affairs of the Society as at that date; and b) at the date of this statement there are reasonable grounds to believe that the Society will be able to pay its debts as and when they fall due. Signed in accordance with a resolution of the Board. During the financial year to which the financial report relates and in the opinion of the members of the Board: In the opinion of the Board: a) no officer of the Society, a firm of which an officer is a member, or a body corporate in which an officer has a substantial financial interest, has received or become entitled to receive a benefit as a result of a contract between the officer, a firm of which the officer is a member or a body corporate in which the officer has a substantial financial interest and the Society, except for Marc Makrid who is a member of Marc Makrid & Associates Pty Ltd which received payment for consulting services provided in the ordinary course of business and the executive management team who received employee remuneration on normal commercial terms and which has been approved by the Board; and b) no officer of the Society has received directly or indirectly from the Society any payment or other benefit of a pecuniary value other than those disclosed in part (a) above which were on normal commercial terms and in the ordinary course of business. Signed in accordance with a resolution of the Board. G Bethune Board Member A Heyworth Board Member Adelaide, South Australia Dated 20 August 2012 G Bethune Board Member A Heyworth Board Member Adelaide, South Australia Dated 20 August ANNUAL REPORT ANNUAL FINANCIAL STATEMENTS

43 Independent Auditor s Report to the Members of Phoenix Society Inc Edwards Marshall We have audited the accompanying financial report, being a special purpose financial report, of Phoenix Society Inc, which comprises the Statement of Financial Position as at 30 June 2012, the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, Notes to the Financial Statements and the Statement by the Board. Board Responsibility for the Financial Report The Board of Phoenix Society Inc is responsible for the preparation of the financial report, and has determined that the basis of preparation described in Note 1, is appropriate to meet the requirements of the Associations Incorporation Act, 1985 and is appropriate to meet the needs of the members. The Board s responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report so that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. No opinion is expressed as to whether the accounting policies used, as described in note 1, are appropriate to meet the needs of the members. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the association s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the association s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Australian Professional and Ethical Standards. Opinion In our opinion, the financial report presents fairly, in all material respects, the financial position of Phoenix Society Inc as at 30 June 2012, and its financial performance and its cash flows for the year then ended in accordance with the accounting policies described in Note 1 to the financial report and the requirements of the Associations Incorporation Act, We have obtained all of the information and explanations required from the association. Basis of Accounting and Restriction on Distribution Without modifying our opinion, we draw attention to Note 1 to the financial report, which describes the basis of accounting. The financial report has been prepared to assist Phoenix Society Inc to meet the requirements of the Associations Incorporation Act, 1985 and Regulations and the Constitution of the Association. As a result, the financial report may not be suitable for another purpose. Edwards Marshall Stephen Camilleri Chartered Accountants Partner Adelaide, South Australia Dated 20 August 2012 ANNUAL FINANCIAL STATEMENTS ANNUAL REPORT

44 Phoenix Society Incorporated Head Office 18 Ashwin Parade, Torrensville SA 5031 Locked Bag 112, Marleston SA 5033 Phone Fax Operating Divisions Phoenix Torrensville 18 Ashwin Parade, Torrensville SA 5031 Phone Fax Phoenix Elizabeth Cnr Commercial & Kettering Roads, Elizabeth South SA 5112 Phone Fax Phoenix Gepps Cross 595 Grand Junction Road, Gepps Cross SA 5094 Phone Fax Phoenix Whyalla 1 Shiell Street, Whyalla Playford SA 5600 Phone Fax Post Haste 25 George Street, Thebarton SA 5031 Phone Fax Phoenix Connect Module 5 West, Endeavour House 1 Fourth Avenue, Mawson Lakes SA 5095 Phone Fax Scan the QR code with your smartphone to discover more. Our Major Supporters Phoenix Women s Auxiliary Drake Supermarkets Rotary Club of Adelaide Australian Petroleum Production & Exploration Association Limited (APPEA) Australian Executor Trustees Estate Mr M Cooper Halifax Wines Prince Alfred College Janville Pty Ltd