Summary of Financial Statements

For the Year Ended 30 June 2014

COMPASS HOUSING SERVICES CO LTD
ABN 84 002 862 213

The financial statements and other specific disclosures have been derived from Compass Housing Services Co Limited (the company’s) full financial statements for the financial year. Other information included in the Summary of Financial Statements is consistent with the company’s full financial statements.

The Summary of Financial Statements do 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 financial statements.

A copy of the company’s 2014 full financial statements, including the independent audit report, is available to all members and will be sent to members without charge upon request.

Directors’ Report

Your directors present their report, together with the summary of financial statements of the Group, being Compass Housing Services Co Limited for the financial year ended 30 June 2014.

Information on Directors

The names, qualifications, experience and special responsibilities of each person who has been a Director during the year and to the date of this report are:

  • Steve Edmonds

    Not re-elected November 2013.

    Qualifications
    Director City Assets and Chief Financial Officer of the City of Newcastle. Qualified Accountant and Land Economist with: Diploma in Project Management. Masters of Property, Diploma in Commercial Asset Property Management. Fellow of the Australian Institute of Company Directors, Masters of Business Administration, Bachelor of Ed, CPA (Associate) Current, Certificate 1V OHS.

    Experience
    Board Member since 2009.

    Special Responsibilities
    Board Member, Treasurer, Chair of Finance Audit & Risk Committee.

  • Kwesi Addo

    Qualifications
    Legal Counsel (NSW/ACT) at Aurecon Australia Pty Ltd, Master of Construction Law, Bachelor of Laws, MBA (Hons), Master of International Relations. Graduate Member of the Australian Institute of Company Directors.

    Experience
    Board Member since 2005.

    Special Responsibilities
    Board Member.

  • Paul Johnson

    Qualifications
    Retired CEO of a Financial Institution. He is also a qualified accountant and CPA. Graduate Member of the Australian Institute of Company Directors.

    Experience
    Board Member since 2010.

    Special Responsibilities
    Chair of Board, Member of Property Acquisitions & Business Development Committee, Member of Finance Audit & Risk Committee, Member of Operations & Community

  • Sandra Calland

    Qualifications
    Tenant advocate of Hunter and Central Coast Tenants Advisory Council, advisory service. Skills in Housing Policy, Development and Tenant Advocacy.

    Experience
    Board Member since 2004.

    Special Responsibilities
    Board Member, Chair of Operations & Community Development Committee, Member of Appeals Committee, Member of Property Acquisitions & Business Development Committee.

  • Barry Martin

    Qualifications
    Currently retired. Has experience in human resource management over a cross section of industry in a career spanning 30 plus years. Also has comprehensive experience in working with the aboriginal community. Member of the Australian Institute of Company Directors.

    Experience
    Board member since 2011.

    Special Responsibilities
    Board Member, Member of Community Engagement & Development Committee, Member of Finance Audit & Risk & Corporate Governance Committee, Member of Appeals Committee, Member of Executive Planning Committee, Member of Board Governance Committee.

  • Stephen Barr

    Qualifications
    Director of Monteath and Powys. Qualified Surveyor and Town Planner. Masters in Planning, Bachelor of Surveying (Hons). Graduate Member of the Australian Institute of Company Directors.

    Experience
    Board Member since 2009.

    Special Responsibilities
    Deputy Chair of Board, Chair of Property Acquisitions & Business Development Committee, Member of Finance Audit & Risk Committee.

  • Greg Budworth

    Qualifications
    Chief Executive Officer at Compass Housing. Masters Degree in Business, and other tertiary qualifications in Business Management, Project Management, Workplace Safety and Workplace Training. Graduate Member of the Australian Institute of Company Directors.

    Experience
    Board Member since 2012.

    Special Responsibilities
    Executive Board Member, Chief Executive Officer, Company Secretary.

  • Mark O’Dwyer

    Qualifications
    Tenant Member. Retired Regional Manager of Yellow Pages Australia. Member of Central Coast Local Health District Community Engagement Committee - 2007 to 2013. Member of N.S.W Housing Federation Tenant Network. Affiliate Member of the Australian Institute of Company Directors.

    Experience
    Board Member since 2011.

    Special Responsibilities
    Board Member, Member of Operations & Community Development Committee, Member of Appeals Committee.

  • Roseanne Chalmers

    Qualifications
    Retired Registered Nurse & Tenant Member.

    Experience
    Elected 28 November 2012.

    Special Responsibilities
    Board Member.

  • Tim Williams

    Qualifications
    Currently CEO of Committee for Sydney. International experience in community housing having advised governments in the UK and Australia. Barrister at Law. Was Special Advisor in UK and Welsh Government and associate of Blair’s Prime Minter’s Delivery unit.

    Experience
    Appointed 18 February 2013.

    Special Responsibilities
    Board Member.

  • Peter Francis

    Qualifications
    Master of Business General Management (Dis), Graduate Diploma of Management, Bachelor of Arts (B.A.), REL , Member of the Australian Institute of Company Directors.

    Experience
    Appointed 16 December 2013.

    Special Responsibilities
    Board Member

  • Company secretary

    The following persons held the position of Company Secretary at the end of the financial year:

    Mr Greg Budworth

    Mr Budworth has worked for Compass Housing Services Co Ltd for the past 10 years previous working in other human services agencies and was appointed company secretary on 4 April 2004.

    Ms Julie Barnett

    Ms Barnett was appointed joint company secretary on 16 December 2013.

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

During the financial year the Non-Executive Directors were paid an aggregate amount of $117,339 plus all reasonable travelling and other expenses properly incurred by the Directors in connection with Board activities (including training ) and provided access to an Ipad to reduce paper usage.

Members had approved an aggregate expenditure of up to $142,025.

Principal Activities

The principal activity of Compass Housing Services Co Ltd during the financial year was providing social housing in the areas of Broken Hill, Dubbo, Upper Hunter, Lower Hunter, Maitland, Central Coast, Newcastle and Lake Macquarie.

Short & long term objectives

The objectives of Compass Housing Services Co Ltd as defined in the organisation’s constitution are as follows:

  1. to take over the funds and other assets and liabilities of the previously unincorporated association known as the Newcastle Lake Macquarie Community Housing Trust;
  2. to relieve poverty, sickness, destitution, helplessness and distress of persons regardless of race, creed, colour or gender;
  3. to obtain secure, affordable and sensitively managed housing for poor, needy and underprivileged people;
  4. to encourage the self - management of properties by involving the tenants in the management functions of the Company;
  5. to purchase real estate;
  6. to liaise with and complement existing housing provision and housing support services;
  7. to compile, print and publish newspapers, periodicals, books, leaflets or other materials; and
  8. to arrange, provide or assist in holding conferences, exhibitions, or other meetings as necessary.

The current strategic objectives of the organisation have been drawn from those defined in the constitution and are as follows:

Growth

Greatly increase social and affordable housing stock by active participation in appropriate transfer and tender opportunities and through self - initiated programs and developments. Support growth through sound systems of management.

Quality

Continuously improve the quality of services to client and benefits to the general community. Pursue and promote sound social and environmental principles and practices.

Diversity

Develop new business, social, environmental and housing opportunities and to encompass a wide range of people, provide wider choice in services and employment opportunities.

Reach

Expand provision of services to other regional areas by participating in regional opportunities and partnerships. Contribute to the national agenda and national programs for community housing development.


To achieve these objectives, the Company has adopted the following strategies:

  • Refining sound finance, audit and risk management;
  • Further improving effective governance, performance, company profile and people management practices;
  • Improving service delivery and quality for clients & community;
  • Enlarging tenant participation outcomes; and
  • Increasing business development opportunities and efficiencies

Members Guarantee

Compass Housing Services Co Ltd is a Company limited by guarantee.

In the event of, and for the purpose of winding up of the Company, the amount capable of being called up from each member and any person or association who ceased to be a member in the year prior to the winding up, is limited to $ 2.20 for members subject to the provisions of the Company’s constitution.

At 30 June 2014 the collective liability of members was $73 (2013: $95).


Indemnifying Officers or Auditors

During the year, the company effected a directors and officer’s liability policy. The insurance policy provides cover for the directors named in this report, the company secretary, officers and former directors and officers of the company.

This policy prohibits the disclosure of the nature of the indemnification and the insurance cover, and the amount of the premium.

No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who has not been an officer or auditor of Compass Housing Services Co Ltd.

Dividends

The Corporations Law prohibits a Company Limited by Guarantee from paying dividends.


Review of operations

The surplus of the Company for the financial year after providing for income tax amounted to $21,891,484.


Significant changes in state of affairs

There have been no significant changes in the state of affairs of the Company during the year.


Environmental issues

The Directors believe the company has complied with all significant environmental regulations under a law of the Commonwealth or of a state or territory.

After Balance Date Events

Logan Renewal Initiative

Compass Housing Services Co Ltd was successful in the Logan Renewal Initiative, which is a QLD government tender. The initiative involves Compass Housing Services Co Ltd and BlueCHP establishing an entity,

Logan City Community Housing Limited to manage approx. 5,000 tenancies and be responsible for the redevelopment of Logan city, delivering an additional 1,500 properties over 20 years. Compass Housing Services Co Ltd will be responsible for the delivery of tenancy management services.

Asset Vesting

The NSW government gazetted on 11 July 2014 to transfer title to 457 properties to Compass Housing Services Co Ltd which will result in an increase of approximately $137,100,000 to Compass Housing Services Co Ltd Statement of Financial Position.

4Walls Limited

On 1 July 2014, Compass Housing Services Co Ltd became the sole member of 4Walls Limited, a CHP located in Brisbane managing approx. 900 properties.

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years.

Meetings of Directors

During the financial year, 29 meetings of directors (including committees of directors) were held.

Attendances by each director during the year were as follows:

 

Board Meetings Property Acquisitions & Business Development Committee Finance Audit & Risk & Corporate Governance Committee Operations & Community Development Committee Appeals Committee Strategic Workshop
Directors Eligible to attend Number attended Eligible to attend Number attended Eligible to attend Number attended Eligible to attend Number attended Eligible to attend Number attended Eligible to attend Number attended
0-0 1-0 1-1 2-0 2-1 3-0 3-1 4-0 4-1 5-0 5-1 6-0 6-1
Kwesi Addo 7 7 - - - - - - - - 1 1
Stephen Barr 7 7 1 1 6 5 - - - - 1 1
Sandra Calland 7 7 1 1 - - 3 3 11 10 1 1
Steve Edmonds 3 2 - - 3 1 - - - - - -
Paul Johnson 7 7 1 1 6 6 3 3 11 9 1 1
Mark O'Dwyer 7 7 - - - - 3 3 11 7 1 1
Barry Martin 7 7 - - 3 3 3 3 11 10 1 1
Roseanne Chalmers 7 2 - - - - - - - - 1 -
Tim Williams 7 5 - - - - - - - - 1 1
Peter Francis 6 6 - - - - - - - - 1 1
Greg Budworth 7 7 1 1 6 6 3 3 11 7 1 1
Eligible to attend Number attended

Auditor’s Independence Declaration

The lead auditor’s independence declaration in accordance with section 307C of the Corporations Act 2001, for the year ended 30 June 2014 has been received and can be found on page 78 of the financial report.

Signed in accordance with a resolution of the Board of Directors:

DIRECTOR - PAUL JOHNSON

DIRECTOR - STEPHEN BARR

Dated 20 October 2014

Summary Statement of Surplus or Deficit & Other Comprehensive Income

For the Year Ended 30 June 2014

2014 2013
Potential tenant revenue $45,387,223 $45,320,693
Less: rent lost through vacancies ($711,192) ($667,496)
Less: rental subsidies and rebates ($14,674,958) ($17,318,948)
blank blank blank
Tenant income $30,001,073 $27,334,249
Fair value adjustment to investment property $3,060,010 $1,109,481
Grant funded revenue $5,038,711 $4,538,905
Other revenue and income $14,995,866 $1,892,462
$53,095,660 $34,875,097
blank blank blank
Administration expenses ($11,754,376) ($10,589,550)
Tenancy and property management expenses ($18,382,364) ($18,093,221)
Finance costs ($1,067,436) ($746,566)
blank blank blank
Surplus before income tax $21,891,484 $5,445,760
Income tax expense - -
Surplus after income tax $21,891,484 $5,445,760
blank blank blank
Other comprehensive income - -
blank blank blank
Total comprehensive income for the year $21,891,484 $5,445,760

Summary Statement of Financial Position

As At 30 June 2014

assets 2014 2013
CURRENT ASSETS
Cash and cash equivalents $17,759,553 $11,776,097
Trade and other receivables $6,543,065 $5,153,209
Other financial assets $9,821,268 $5,527,543
Other assets $594,838 $830,179
Non-current assets held for sale $240,000 $1,750,000
TOTAL CURRENT ASSETS $34,958,724 $25,037,028
NON CURRENT ASSETS
Other assets $1,250 $1,700
Other financial assets $124,141 $122,639
Property, plant and equipment $647,382 $740,859
Investment property $194,045,234 $173,158,538
Intangible assets $109,505 $62,334
TOTAL NON CURRENT ASSETS $194,927,512 $174,086,070
TOTAL ASSETS $229,886,236 $199,123,098
LIABILITIES
CURRENT LIABILITIES
Trade and other payables $2,305,589 $1,992,566
Borrowings $1,269,372 $1,281,917
Short-term provisions $698,755 $600,626
Other liabilities $11,090,553 $4,578,167
TOTAL CURRENT LIABILITIES $15,364,269 $8,453,276
NON CURRENT LIABILITIES
Borrowings $21,984,153 $20,096,044
Long-term provisions $115,500 $42,948
TOTAL NON CURRENT LIABILITIES $22,099,653 $20,138,992
TOTAL LIABILITIES $37,463,922 $28,592,268
NET ASSETS $192,422,314 $170,530,830
EQUITY
Reserves $115,089,886 $115,089,886
Accumulated surpluses $77,332,428 $55,440,944
TOTAL EQUITY $192,422,314 $170,530,830

Summary Statement of Changes in Equity

For the Year Ended 30 June 2014

2013 - 14 accumulated surpluses asset revaluation reserve vested capital assets reserve vested surplus reserve total
Balance at 1 July 2013 $55,440,944 $75,000 $110,101,451 $4,913,435 $170,530,830
Total comprehensive income $21,891,484 - - - $21,891,484
Balance at 30 June 2014 $77,332,428 $75,000 $110,101,451 $4,913,435 $192,422,314
2012 - 13 accumulated surpluses asset revaluation reserve vested capital assets reserve vested surplus reserve total
Balance at 1 July 2012 $49,995,185 $75,000 $110,101,451 $4,913,435 $165,085,071
Total comprehensive income $5,445,759 - - - $5,445,759
Balance at 30 June 2013 $55,440,944 $75,000 $110,101,451 $4,913,435 $170,530,830

Summary Statement of Cash Flows

cash from operating activities 2014 2013
Receipts from customers $44,418,508 $27,140,419
Payments to suppliers and employees ($30,955,247) ($26,384,106)
Interest received $685,189 $581,846
Interest and borrowing costs paid ($1,067,436) ($746,566)
Receipt from grants $11,999,139 $4,419,849
(Net cash provided by used in operating activities) $25,080,153 $5,011,442
cash flows from investing activities 2014 2013
Proceeds from sale of plant and equipment $26,232 $80,623
Proceeds from sale of investment $1,461,000 $1,965,381
Proceeds from sale of subsidiary - $800,000
Purchase of financial assets ($4,295,227) -
Purchase of property, plant and equipment ($212,159) ($297,727)
Payment for investment properties and WIP ($17,826,686) ($19,556,260)
Payment for intangible assets ($113,626) ($91,390)
Net cash used by investing activities ($20,960,466) ($17,099,373)
cash flows from financing activities 2014 2013
Proceeds from borrowings $3,230,256 $13,173,349
Repayment of borrowings ($1,366,487) ($1,079,595)
Payment of finance lease liabilities - ($159,898)
Net cash used by financing activities $1,863,769 $11,933,856
(Net increase decrease in cash and cash equivalents held) $5,983,456 ($154,075)
Cash and cash equivalents at beginning of year $11,776,097 $11,930,172
Cash and cash equivalents at end of financial year $17,759,553 $11,776,097

Directors’ Declaration

The directors of the Compass Housing Services Co Limited declare that:

1. The summary financial statements, as set out on pages 70 to 82:
a. comply with Accounting policies, as disclosed in the full financial report; and
b. have been derived from and are consistent with the full financial statements of Compass Housing Services Co Limited.

2. In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.


This declaration is made in accordance with a resolution of the Board of Directors.

DIRECTOR - PAUL JOHNSON

DIRECTOR - STEPHEN BARR

Dated 20 October 2014

Independent Auditor's Report

download Independent Auditor’s Report pdf