Yooralla Reported Total Comprehensive Loss of $0.9M and Operating Deficit of $0.6M For

FINANCIALREPORT

Yooralla reported total comprehensive loss of $0.9M and operating deficit of $0.6M for the year ended 30 June 2015. This included book value adjustments of $0.4M of unrealised losses on equity investment. The deficit recorded from operations was $1.7M, prior to receipts from Bequests of $1.1M.

Revenue from operations is recorded at $103.9M, a decrease of $3.2M on the previous year (2013/14). Revenue from operations in 2013/14 was favourably impacted through a gain of $3.5M on a Business Acquisition.

The chart above shows revenue trends over the previous six years. For 2012/13 and 2014/15, revenue remained stable and was not impacted by acquisitions or asset sales as had been the case in prior years.

Sources of income from Government bodies continue to provide Yooralla with the majority of our income stream.The support that we receive from Department of Health and Human Services, Department of Education and Training and the Commonwealth Department of Social Services is imperative to providing quality services to our clients. The government derived income has amounted to $86M for the 2014/15 financial year.

Operating expenditure decreased significantly in 2014/15 financial year by $3.6M compared to the prior year. Cost reductions have been achieved through injury management, staffing re-structures and reducing agency usage.

Labour costs continue to be the largest of Yooralla expense items. Management implemented a number of efficiency initiatives during the 2014/15 year and has undertaken re-structures and other cost saving strategies across a number of Yooralla divisions. This will assist to deliver an improved result in 2015/16 and place Yooralla in a stronger position with the onset of NDIS.

The Net Assets of Yooralla at the end of the 2014/15 financial year were $55.5M. Launching from the solid financial base created in prior years, Yooralla was able to make strategic investment in Information Technology and Property Assets. This continued development will leverage Yooralla to be well positioned to provide enhanced services to our customers as NDIS is implemented over the following years.

Yooralla continues to rely on the generosity of the public in the form of annual donations, bequests and trusts. On behalf of the clients of Yooralla, we therefore wish to thank all our financial supporters. It is only with these additional revenues that Yooralla is able to ensure the continuation of its services to people with a disability across Victoria and maintain the financial strength of the organisation.

ClaireKeating

Chairperson-Finance,Audit,InfrastructureRiskCommittee

17 September 2015

DIRECTORS’ REPORT

Your Directors submit their report for the year ended 30 June 2015.

Directors

The names and the details of the members of the Board during the financial year and until the date of this report are set out elsewhere in this report. The Board members were in office for the entire period unless otherwise stated.

Corporate Information

Yooralla is a company limited by guarantee and the liability of members of Yooralla is limited to $50 each. The principal activity of Yooralla is to provide services for people with disabilities in the State of Victoria. Yooralla’s range of essential services includes therapy, accommodation, respite, equipment, employment, recreation and help in and out of the home.

Objectives

Yooralla’s objectives are guided by our vision, which is a world where people with disability are equal citizens.

Yooralla's strategic plan, SMART Choices, reflects Yooralla’s need to continue driving service transformation, to maximise the value we add for people with disability in an NDIS environment.

Through SMART Choices, Yooralla will focus on providing relevant and quality services for children and adults with disability, their families and carers. Our services include a range of accommodation alternatives, respite, in-home support, therapy, attendant care, assistive technologies, employment, education, recreation, training and practical skills for daily living.

The Yooralla Promise, as an Australian human service provider, informed by its Victorian context and engaged with the people and the local communities it serves, Yooralla promises to advance:

Services / Offer outstanding products and services that support people with disability, in all their diversity, to live the life they choose.
Markets / Understand consumer needs and meet these through the development of appropriate partnerships, programs, leadership and management.
Access / Easily connect with and use Yooralla services.
Reputation / Demonstrate and build integrity through evidence based solutions and measurable results.
Talent / Engaged, responsive staff who are educated, skilled, inspired and who demonstrate our Yooralla values

These five important and interconnecting elements make up the Yooralla Promise.

Progress against our strategic plan is governed through the preparation and monitoring of annual business plans and tracking a number of key performance indicators. These performance indicators broadly monitor services meeting contemporary customer needs, productivity measures, increased customer numbers and service recognition, client satisfaction, research that leads to change in practice and service delivery, financial performance, and increased staff engagement.

Review of Operations and Results

Yooralla'stotal comprehensive loss for the year ended 30 June 2015 was $878,810 (2014 surplus: $503,689). Included in the comprehensive income for the year were unrealised losses on equity investment of $0.4M, and other income from capital grants and bequests $1.5M. Typical operational activity for the year ended June 2015 resulted in Yooralla posting a deficit of $0.6M.

Total revenue decreased by $3.2M. This decrease is reflective of a $3.5M decrease for gain on acquisition of EDAR which was recorded in 2013/14.

There was a slight decrease in revenue from operating activities of $0.6M.

Total operating expenses decreased by $3.6M. The decrease is mainly due to a $2.4M decrease in employee expenses as a result of restructures and a $1.5M decrease in other expenses.

Principal Activities

The company’s principal activities for the year were:

• Residential and carer support for people with disabilities
• Community and Independence services
• Children’s school and early intervention services
• Recreation services
• Adult day program services
• Supported employment services
• Raising of funds for these activities through government grants, fee for service and fundraising.

Significant events or changes in affairs after balance date

The directors are not aware of any other matter or circumstance apart from the $1M bequest received from the estate the late MrsEllen Louise Blakemore and the placing of Flinders Street property on the market for sale, disclosed under note 23, which willsignificantly or may significantly affect Yooralla's operations, the result of those operations or Yooralla's state of affairs.

Directors Benefits

No non-executive director of Yooralla has received or became entitled to receive a benefit by reason of a contract made by Yoorallawith a director, with a firm of which a director is a member, or with a company in which a director has a substantial financial interest,except as disclosed in Note 19.

Environmental regulations

The Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of any State orTerritory.

Indemnification and insurance of officers and auditors

During the financial year, insurance cover was provided in respect of directors’ and officers’ liability under the State Government’s insurance policy for State Government of Victoria funded Community Service Organisations. A premium was not incurred by Yooralla to give effect to this cover.

Yooralla has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of Yooralla or of any related body corporate against a liability incurred as such an officer or auditor.

Proceedings on behalf of the Company

No person has applied for leave of Court to bring proceedings on behalf of Yooralla or intervene in any proceedings to which Yooralla is a party for the purpose of taking responsibility on behalf of Yooralla for all or any part of those proceedings.Yooralla was not a party to any such proceedings during the year.

Directors’ Meetings

During the year, the number of Board and Committee Meetings held and attended by Directors were as follows:

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(1)Resigned on 7 August 2014

(2) Resigned on 23 November 2014

(3)Resigned on 30 June 2015

(4)Resigned on 7 August 2014

(5) Appointed on 9 April 2015

(6) Appointed on 15 October 2014; Resigned on 10 December 2014

(7) Appointed on 22 September 2014

(8) Resigned on 10 August 2015

* Numberofmeetingsthe director wasa member ofthe committee

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Auditors’ Independence and Non-Audit Services

The directors received a declaration from the auditor of Yooralla which is included with the Independent Audit Report on pages 41 to 43.

On behalf of the Board

Signed in accordance with a resolution of the Directors.

Claire Keating

Acting Chairperson

17 September 2015

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CORPORATE GOVERNANCE

The Board of Directors of Yooralla is responsible for corporate governance of the organisation.The Board guides and monitors the business and affairs of Yooralla to ensure that it achieves its Objects, as set out in the Constitution, and acts on behalf of its members by whom it is elected and to whom it is accountable.

The Board sets the policies, strategic direction and annual budget of Yooralla.It decides what services and programs are to be provided and supported.The Chief Executive, appointed by and accountable to the Board, is responsible for the day to day operations and administration of Yooralla.

The Board aims to ensure it discharges its responsibilities in an appropriate manner and it has established Charters and Policies to guide its actions.

The Board ensures that the members are informed and the information is communicated through:

• The annual report which is distributed to all members;
• The annual general meeting and such other meetings as may be called to obtainapproval forBoard action as required by the Constitution.

Composition of the Board

The composition of the Board is determined in accordance with Yooralla’s Constitution:

• The Board must comprise between seven and ten directors.The members can vote at a general meeting to change the limits on the number of directors. However the limits cannot be lower than five nor greater than fifteen. The Board can still act even if it has fewer directors than its lower limit. However, if it has fewer than five directors it cannot do anything other than appoint more directors so that there are five in all.
• A person can become a director by being elected by the members at an Annual General Meeting. At each Annual General Meeting, at least one third of the Board (those on the Board for the longest time since last elected) must resign and having done so, are eligible to be re-elected.These rotation requirements do not include the Chief Executive Officer.
• At the first Board meeting after each Annual General Meeting, the Board must elect a Chairman and a Deputy Chairman.
• The Board can appoint a member to fill a casual vacancy on the Board.He or she will hold office until the next Annual General Meeting and will be eligible for re-election at that meeting.
• ·At any meeting of Yooralla, the members present in person or by proxy, who are entitled to vote, may, by a majority vote, remove a director and appoint a replacement.
• The Board meets in accordance with the Constitution and its directions and follows meeting guidelines set down to ensure all directors are made aware of, and have available all necessary information, to participate in an informed discussion of all agenda items.

Details of the members of the Board of Yooralla during the financial year are set out elsewhere in thisAnnual Report.

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Codes of Conduct

Codes of Conduct have been developed to establish the professional standards of behaviour required of directors, management and staff in the conduct of Yooralla’s affairs.In particular, the Staff Code seeks to provide guidance to staff to assist them to act with confidence and integrity in their interpersonal relationships with consumers, consumers’ family members, carers and advocates.The Codes are periodically reviewed and updated as required.

Risk Management Framework

The Board ensures that a risk assessment process is regularly undertaken and that control and monitoring processes are both in place and reviewed on a regular basis.The Board is supported in this responsibility through its sub-committees and by the development and formalisation and policies and procedures at the organisational and divisional levels.

Board Committees

The Board has established the following Committees to assist it in carrying out its responsibilities:

Finance, Audit, Infrastructure & Risk Committee (formerly Finance, Audit & Infrastructure)

This Committee’s primary purpose is to advise the Board and the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and other members of the senior management team in matters relating to:

a)Risk: assisting the Board and the CEO and CFO to discharge their responsibilities for oversight and governance of risk within Yooralla;

b)Audit: assisting the Board and the CEO and CFO to discharge their responsibilities for the audit function (including internal audit and the annual external audit);

c)Finance: including reviewing Yooralla’s annual budgets, financial reporting and record keeping, cash flow and Annual Financial Report. The Committee will also advise the Board on the strengths and weaknesses of the Company’s financial position with regard to its strategic and business plans, and its legal obligations;

d)Infrastructure: including the Company’s property holdings and Property Strategy, Information, Communications and Technology (ICT) infrastructure and ICT Strategy and other significant asset management (e.g. fleet management).

The members of the Finance, Audit, Infrastructure and Risk Committee during the year were Ms Claire Keating (Chair), Ms Barbara Alexander, Ms Julie Fahey (appointed 9 Apr 2015), Dr Wayne Ramsey AM, Mr Ian Silk (resigned 10 Aug 2015), Dr Peter Langkamp (resigned 7 Aug 2014), Mr Robert Walker (resigned 7 Aug 2014), MrSanjib Roy (resigned 23 Nov 2014) and Dr Sherene Devanesen (appointed 5 Feb 2015).

Investment Committee

This Committee has responsibility and delegated authority to manage theYooralla Long Term Investment Portfolio (YLTIP) including:

a)oversight and control of the YLTIP;

b)approval of the YLTIP investment strategy (Investment Strategy in accordance with the investment guidelines (Investment Guidelines) set out below.

The goals of the YLTIP set by the Board are:

a)to grow the YLTIP in excess of the rate of inflation in the long term (5 plus years); and

b)to generate a growing income stream each year to underpin research, innovation and policy development.

The Finance, Audit, Infrastructure & Risk Committee, based on advice from management, will at least annually determine Yooralla’s working capital requirements and recommend to the Board the quantum of funds for additional investment in the YLTIP or the requirements for drawing down on the capital in the YLTIP to meet working capital requirements or for investment in property.

The members of the Investment Committee during the year were Dr Wayne Ramsey AM (Chair), Ms Barbara Alexander AO, Mr Ian Silk (resigned 10 Aug 2015), Mr Richard Greenfield (co-opted member) and Dr Steven Vaughan (co-opted member).

Service Delivery & Quality Committee (formerly People, Quality & Policy)

The Committee performs a monitoring and advisory role in relation to the senior management responsible for service and quality and reports to the Board in matters relating to the:

a)quality of Yooralla’s services and practices;

b)practice and behaviours of employees and the interrelationship with the quality of services Yooralla delivers to clients; and

c)effectiveness of the services provided by Yooralla.

The members of the Service Delivery & Quality Committee during the year were Dr Wayne Ramsey AM (Chair), Ms Barbara Alexander AO, Ms Claire Keating, Ms Fiona Smith (resigned 30 Jun 2015), Dr Jane Tracy, Dr Peter Langkamp (resigned 7 Aug 2014) and MrSanjib Roy (resigned 23 Nov 2014).

Business Strategy & Performance Committee

This committee's role is to advise and make recommendations to the Board in matters relating to Yooralla’s:

a)strategic planning;

b)business performance;

c)mission; and

d)vision and values.

The Business Strategy & Performance Committee members during the year were Dr Peter Langkamp (Chair, resigned 7 Aug 2014), Dr Wayne Ramsey AM (Chair from 8 Aug 2014), Ms Fiona Smith (resigned 30 Jun 2015), Mr Robert Walker (resigned 7 Aug 2014) and MrSanjib Roy (resigned 23 Nov 2014).

Governance & People Committee (formerly Nominations & Remuneration)

This committee's role is to advise, support and make recommendations to the Board in matters relating to its composition and the effective discharge of its legal, ethical and functional responsibilities of oversight and corporate governance with particular reference to:

a)the parameters of Board responsibility;

b)Board composition and skillsets;

c)human resources (including remuneration and people policies); and

d)the Chief Executive Officer (CEO) performance, review and succession planning.

The members of the Governance & People Committee during the year were Mr Ian Silk (Chair, resigned 10 Aug 2015), Dr Wayne Ramsey AM, Dr Peter Langkamp (resigned 7 Aug 2014), Ms Fiona Smith (resigned 30 Jun 2015), Mr Robert Walker (resigned 7 Aug 2014) and MrSanjib Roy (resigned 23 Nov 2014).

Board’s Compensation

A non-executive director may not be paid by Yooralla for his or her work as a director or for services to people with disabilities.He or she is only paid for his or her out of pocket expenses.Subject to section241 of the Corporations Act, Yooralla must indemnify every director or other officer of Yooralla against all liabilities which he or she may take upon himself or herself as agent for Yooralla or for the benefit or intended benefit of Yooralla.However, Yooralla will not be required to provide an indemnity if the director or officer was acting outside the scope of his or her authority pursuant to the Corporations Act.

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