Finance & Governance

Directors Declaration

Your directors present the financial statements of the Rural Housing Network Limited (‘the Company’) for the year ended 30 June 2020.

Directors

The following persons were directors of Rural Housing Network Limited during the whole of the financial year and up to the date of this report unless otherwise stated:

  • Susanne Paini
  • Teigan O’Grady (Resigned November 2019)
  • Ronni Druitt (Appointed September 2019)
  • Ben Ruscoe (Appointed April 2020)
  • Owen Webb (Resigned March 2020)
  • Cade Gow
  • Darran Stonehouse
  • Neil Funston
  • Alan Arthur (Appointed November 2019)
  • Ann Telford (Resigned August 2019,reappointed January 2020)

Company secretary

Owen Webb acted as Company Secretary on up until 27 November 2020. Ronni Druitt was appointed as company secretary on 27 November 2020.

Principal activities

The principal activity of the entity during the financial year was:

To provide housing support services to disadvantaged households; broadly grouped into the following areas: Transitional Housing Services, Long Term Housing Services and Rental Housing Support Services.

No significant changes in the nature of the entity’s activity occurred during the financial year.

Objectives

Rural Housing Network Limited’s objective is for all people to have safe, secure, affordable and appropriate housing. Rural Housing Network Limited is committed to ending homelessness. Our aim is to provide the full range of quality housing and homelessness services by working in partnership with Government, business, communities and individuals.

Strategies

Rural Housing Network Limited’s strategies to achieve these objectives are -

  1. To deliver services to our clients in ways that represent our values, promote the rights of people and ensure the best possible housing outcomes; prioritising for the most vulnerable in our communities. We are committed to Aboriginal and Torres Strait Islander self-determination and culturally competent practice. As such, we will seek guidance from Aboriginal peoples and consult with Aboriginal services to deliver culturally appropriate services.
  2. To provide leadership, advocacy, and influence on the issues of homelessness and affordable housing within our catchment and beyond.
  3. To be a values-based organisation, with a positive team culture that promotes safety and well-being; and supports each other in the pursuit of achieving our vision to end homelessness.
  4. To use evidence of demand to grow, recognising that it requires the courage to take some considered risks and the resources to develop concepts that, when tested, may not proceed.
  5. To have robust systems that enhance the experience for all stakeholders, drive strategic improvements and provide for an objective basis for decision-making and accountability.
  6. To minimise our environmental impact through the adoption of financially viable initiatives to improve resource efficiency, reduce waste generation and reduce the consumption of natural resources.

KPI's

Rural Housing Network Limited monitors its financial performance by setting targets for some key financial benchmarks. Performance against these indicators for the financial year ending 30 June 2020 and prior year are set out in the table below.

Information on Directors

Neil Funston

Director since 30/08/2017
Responsibilites:

  • Finance & Audit Committee
  • People & Culture Committee

Susanne Paini

Director since 5/11/2008
Responsibilities:

  • Chairperson from 30/11/2017
  • Finance & Audit Committee
  • People & Culture Committee

Occupation – Chief Executive Officer

Ronni Druitt

Director since 25/09/2019
Responsibilities:

  • Secretary from 27/11/19
  • Risk & Governance Committee

Occupation – Chief Executive Officer

Ann Telford

Director since 24/02/2017. Resigned 15/08/19
Reappointed 22/02/2020
Responsibilities:

  • People & Culture Committee

Occupation – Executive Manager

Teigan O’Grady

Director since 31/10/2019. Resigned 27/11/2019
Responsibilities:

  • Risk & Governance Committee
  • Finance and Audit Committee

Occupation – Manager Governance and Risk

Owen Webb

Director since 30/11/2011. Resigned 25/3/2020
Responsibilities:

  • Secretary until 27/11/2019
  • Risk & Governance Committee

Occupation – Solicitor

Alan Arthur

Director since 27/11/2019
Responsibilities:

  • Risk & Governance Committee

Occupation – Director Corporate Services

Cade Gow

Director since 28/11/2012
Responsibilities:

  • Treasurer from 28/11/2019
  • Finance & Audit Committee

Occupation – Accountant

Ben Ruscoe

Director since 29/04/2020
Responsibilities:

  • Finance & Audit Committee

Occupation – Executive Manager

Meetings of directors

The number of meetings of the Company's directors held during the year ended 30 June 2020, and the number of meetings attended by each director were:

* reflects the number of meetings held during the time the director held office during the year.

The Company is incorporated under the Corporations Act 2001 and is a company limited by guarantee. If the Company is wound up, the constitution states that each member is required to contribute a maximum of $10 each towards meeting any outstanding and obligations of the entity. At 30 June 2020, the total amount that members of the company are liable to contribute if the company is wound up is $70 (2019: $70).

Auditor’s independence

A copy of the auditors’ independence declaration as required by the Australian Charities and Not-forprofits Commission Act 2012 has been received and can be found following this director’s report. This directors’ report is signed in accordance with a resolution of the directors.

Director's Declaration

The directors of Rural Housing Network Limited declare that the concise financial report of the Company for the year ended 30 June 2020:

a) complies with Accounting Standard AASB 1039: Concise Financial Reports; and

b) is an extract from the full financial report for the year ended 30 June 2020 and has been derived from and is consistent with the full financial report of the Rural Housing Network Limited.

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

Statement of Profit & Loss and Other Comprehensive Income

For the year ended 30 June 2020.

Statement of Financial Position

For the year ended 30 June 2020.

Statement of Changes in Equity

Statement of Cash Flows

For the year ended 30 June 2020.

Notes to the concise financial report

For the year ended 30 June 2020

Note 1. Summary of significant accounting policies

Basis of preparation of the Concise Financial Report

The concise financial report is an extract of the full financial report for the year ended 30 June 2020. The concise financial report has been prepared in accordance with Australian Accounting Standard AASB 1039: Concise Financial Reports.

The financial statements, specific disclosures and other information included in the concise financial report are derived from and are consistent with the full financial

Note 2: Revenue

Note 3. Profit

Net gains and expenses

Profit before income tax expense incldues the following expenses:

Note 4. Events Occurring after Reporting Date

No events have occurred since the end of the financial year that have significantly affected, or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in the ensuing or any subsequent financial years.

Note 5. COVID-19 Impact

Coronavirus (COVID 19) was first reported to the World Health Organisation as an unknown virus in late December 2019, developments though out 2020 to date are causing great uncertainty in respect to both health and safety and for the global economy. The Company has not been significantly impacted by the restrictions given the Company is an essential service, however some programs that are run, have been subsidised further to accommodate the current events and potential increases to housing assistance.

Further, subsequent to 30 June 2020 restrictions have been implemented in respect to crossing the NSW and Victorian border as the result of COVID-19. These restrictions have created a minor impediment to the company’s ability to provide some services given some staff reside in NSW, however given the Company operates an essential service within regional Victoria the impact on the revenue and activity generated is expected to be minimal.

Note 6. Analysis of Financial Report

The discussions and analysis is provided to assist members in understanding the concise financial report. The discussion and analysis is based on the Rural Housing Network Ltd financial statements and the information contained in the concise financial report has been derived from the full financial report of the Rural Housing Network Ltd for the year ended 30 June 2020.

Statement of Profit and Loss and Other Comprehensive Income

For the year ended 30 June 2020, a surplus of $3,896,782 has been achieved. The reported surplus was based on Total Revenues of $16,307,800. Comparative figures for the prior year, 2018/2019, were a surplus of $2,707,558 and Total Revenues of $14,106,711.

Included in the current year’s result was capital grant income of $3,255,553, which related mainly to funding from the Department of Justice for the housing project designed to provide accommodation in the Mitchell Shire and to funding from the Peter and Lyndy White Foundation to construct affordable rental units in Wangaratta, Shepparton and Seymour, and a non-monetary land contributions to the value of $207,000. This compares with the 2018/2019 year which included capital grants of $2,090,185. The underlying Operating Surplus for the 2019/2020 year was $402,044 compared to $534,864 for the previous year. Operating Income for the reporting year was $12,813,062 which was higher than the prior year of $11,934,017 an increase of 7.37%.

Operating Grants in 2019/20 of $7,509,437 is an increase of $694,181 compared with the 2018/19 operating grants balance of $6,815,256. The increase related to mainly $205,479 for BPRA brokerage, $57,580 increase from the Rapid Housing Head Leasing funding program, increases from funding provided to assist during the COVID-19 Pandemic and also a number of programs run having general index increases. Operating grants represented 59% of total operating income which is comparable to the prior year of 57%.

Rental income and other income balances received have increased on 2018/19 due mainly to the increased number of rental properties that the company operate based on new housing constructed within the past 12 months. Operating expenses for the 2019/2020 year, (excluding interest expense and loss on sale of assets) totalled $11,947,456 compared to $11,037,414 in 2018/2019. The 8.25% increase in Operating Expense in 2019/2020 over the previous year, was due in part to an increase full time equivalent staff along with annual wage increases, impact in the current year being $649,900. Administrative and Office Expenses in the current year decreased by $320,132 from the prior year due to the implementation of AASB 16 Leases in the current year, which resulted in a decrease in lease expenses accounted for, offset set by a corresponding increase in depreciation of right-of-use lease assets as reflected in the $384,346 increase in the depreciation expense balance from the prior year.

Interest Income in 2019/2020 of $63,190 has decreased on the prior year amount of $114,198 due to lower interest rates being received for term deposit investments and term deposit funds being utilised for capital works during the current year.

Statement of Financial Position

As at 30 June 2020, Net Assets were $65,475,639, compared to $61,578.857 as at 30 June 2019, an increase of 6.33%. Current Assets including Cash and Cash Equivalents amounted to $3,898,848 at the end of the 2019/2020 year, compared to the corresponding total of $6,803,480 at the end of prior year. A decrease in the balance is mainly due to purchases of property, plant and equipment of $7,206,490, of which $3,255,553 was funded from capital grants received.

Property, Plant and Equipment at the end of 2019/2020 amounted to $77,135,099, at written down value, which represented an increase of $8,210,775 when compared to 2018/2019 balance of $68,924,324. The increase is due $7,507,676 of capital additions which mainly represents the construction and fit-out of new affordable accommodation. $1,774,595 of this increase is also represented by right-of-use assets for property and motor vehicle leases which have been recognised for the first time in the current year under the implementation of AASB 16 Leases.

Current Liabilities increased to $5,496,064 at the end of 2019/2020 compared to the 2018/2019 closing balance of $5,701,151. The decrease of $205,087 is due to a decrease in the unexpended capital grants liability of $847,391. This decrease is offset by a $206,440 increase in operating grants in advance, $144,721 from the increase in employee provisions, and $300,870 from current lease liabilities recognised for the first time in the current year under the implementation of AASB 16 Leases.

Non-Current Borrowings increased to $8,481,997 in 2019/2020 from $8,381,604 last year. The increase is the result of additional draw-downs from available facilities. In the current year, $1,521,060 has been recognised as a non-current lease liability for the first time under the implementation of AASB 16 Leases.

Statement of Cash Flows

During 2019/2020 operating, investing and financing activities generated a net decrease in Cash Held of $2,877,084 compared to an increase of $775,214 in 2018/2019. The major movements in cash flow in the current year were in regard to an increase in property, plant and equipment purchases from $4,694,419 in the prior year to $7,206,490 this year. Property, plant and equipment purchases were funded partly by $3.255M in capital grants. Total outflows from financing activities of $155,386 were driven by the repayment of lease liabilities of $294,581, offset by a net increase in proceeds from borrowing facilities of $139,195. Lease liability repayments have been recognised within financing actives for this first time in the current year as a result of the adoption of AASB 16 Leases. This has resulted in a decrease in lease expense payments included in operating cash flows within payments to suppliers and employees.

Independent auditor's report to the members of Rural Housing Network Ltd

Report on the concise Financial Report

The accompanying concise financial report of Rural Housing Network Ltd comprises the statement of financial position as at 30 June 2020, the statement of profit and loss and other comprehensive income, statement of equity and statement of cash flows for the year then ended and related notes, derived from the audited financial report of Rural Housing Network Ltd for the year ended 30 June 2020. The concise financial report does not contain all the disclosures required by the Australian Accounting Standards.

Auditor’s opinion of the Financial Report

In our opinion, the concise financial report Rural Housing Network Ltd for the year ended 30 June 2020 complies with Australian Accounting Standard AASB 1039 Concise Financial Reports.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the registered entity in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Directors’ responsibility for the concise Financial Report

The Directors are responsible for the preparation and presentation of the concise financial report in accordance with Accounting Standard AASB 1039 Concise Financial Reports, and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In preparing the concise financial report, the Directors are responsible for Rural Housing Network Ltd’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern andusing the going concern basis of accounting unless the Directors either intend to liquidate the registered entity or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibility for the Audit of the Financial Report

Our objective is to obtain reasonable assurance about whether the concise financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the concise financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/Home.aspx.

This description forms part of our auditor’s report.