AnnuAl RepoRt - Whitepages · North board welcomes Hans Mouthaan as their newest director. Hans Mouthaan was the Chairperson of Inverell Community Housing Inc. and brings extensive

HOMES NORTH COMMUNITY HOUSING

AnnuAl RepoRt 2013-2014

Our Organisation

Our Vision, Mission, Values & Objectives 4

Homes North Profile 6

Organisational Chart 7

Board of Directors 8

Chairperson’s Report 12

CEO Report 14

Strategic Plan 15

Report Card 16

Our Community

We Listened 18

Who Did We Help This Year? 19

Building Community Through Gardening 20

Providing Opportunities 23

Acknowledgement 24

Our Sustainability

Asset Report 26

Financial Summary 29

Our Housing Alliance 31

Purpose, Values 32

Business Objective 33

Economic Impact 34

Audited Financial Statements 35

Contents

Homes North Community Housing Co. Ltd | ABN: 78 014 531 758

OUR VISIONBuilding strong regional communities through the provision of high quality housing services.

OUR MISSIONHomes North is a community anchor in New England and North West NSW. Working through partnerships and alliances, we provide a range of appropriately designed, well-managed affordable housing for people on low to moderate incomes.

OUR VAlUESIntegrity: we treat our tenants, partners, and stakeholders with empathy and respect.

Professionalism: we maintain high standards as individuals, and as an organisation, and constantly strive for improvement.

Respect: we will continue to be an employer of choice, showing respect and loyalty to our staff who deliver excellent service to tenants, partners and communities.

Vision, mission And VAlues

OUR ORGANISATION4

• Create secure, affordable and sensitively managed housing opportunities for low income households, regardless of race, creed, colour, gender or sexual orientation.

• Encourage the support of all levels of government for the development and expansion of community-based non-profit housing programs.

• Take up equity in properties wherever possible.

• Identify unused publicly owned properties and bring these under the company’s management where appropriate.

• Work for the prevention of the further loss of accommodation for low income earners and the associated escalation in accommodation costs which is causing dispossession and displacement of these people.

• Raise public awareness and understanding of the social contexts within which people become homeless or poorly housed.

• Encourage the involvement of tenants in the management of their own housing.

• Focus on the housing needs of those population groups discriminated against in the private rental market and/or excluded from other public housing programs.

• Inform, assist and co-operate with other organisations and with all levels of government concerned with housing issues.

• Liaise with and complement existing housing provision and housing support services.

stRiVe foR... 1. A just and equitable distribution of, and

access to, housing resources in NSW;

2. Community and consumer involvement, participation and representation in planning and implementing housing policies;

3. An integrated approach to housing and human settlement including consideration of necessary facilities, amenities, opportunities and community supports.

Excerpt from Homes North Constitution

CompAny objeCtiVes

5OUR ORGANISATION

GOVERNANCE Homes North Community Housing Company Ltd is incorporated as a company and has a skills-based board of directors. There are currently seven directors with backgrounds in risk management, policy development, housing services, banking, welfare, business management, large-scale residential development and education. The board meets every month except over the December/January holiday period. The board is responsible for the company’s corporate governance and strategic direction. The day-to-day management and implementation of the strategic plan and business goals is the responsibility of the Chief Executive Officer.

OUR STRUCTURE All administration, finance and reporting functions reside in Armidale and are managed by the Chief Executive Officer and Manager of Business Services. The company also has an asset team in Tamworth, overseen by the Asset Manager, to ensure the efficient management and maintenance of the asset base. Housing management is delivered through our local offices, and is overseen by two Service Managers. Homes North is committed to retaining local offices across the New England and North West NSW to ensure our service can respond effectively to community needs.

OUR PORTFOlIO As at 30 June 2014 Homes North managed 1009 properties across the New England and North West NSW under a range of programmes. Housing NSW, through the Community and Private Market Housing, currently funds much of Homes North’s portfolio. Community and private market housing funding provides three types of assistance:

Capital Properties: The capital program allows community housing providers to lease Land and Housing Corporation-owned properties, and sublet to eligible clients. Homes North collects all rents and pays all expenses associated with the properties and is responsible for all aspects of long-term asset maintenance planning.

leasehold Properties: The leasehold program provides a subsidy for Homes North to rent in the private market and then sublet to a low income household at a reduced rent.

Stimulus: The title transfer programme allows the housing provider to leverage against the transferred assets to procure additional social housing. Caveats on title require that these properties are used for the purpose of social housing.

Fee for Service: Homes North also has contracts where it provides tenancy and property management services on a fee-for-service basis. This arm of our service is managed separately from our community housing portfolio and caters to the client organisations. These services are only provided to organisations providing social and affordable housing.

Community Housing leAsing pRogRAmCapital Properties: 391 Land and Housing Corporation properties.

leasehold Properties: 133 lease hold properties.

stimulus250 nation-building properties with title transfer.

fee foR seRViCe193 properties - Aboriginal Housing Office (employment-related accommodation properties), Inverell Community Housing, Mara Mara Community Incorporated, Tamworth Local Aboriginal Lands Council, Uniting Care Ageing and Youth properties.

speCiAl pRojeCt27 Housing NSW Affordable Housing properties.

owned15 Homes North freehold properties.

PROPERTY NUMbERS

as at 30th June 2014

CHLP (524)

Stimulus (250)

Fee For Service (193)

Special Project (27)

Owned (15)

Homes noRtH people

6 OUR ORGANISATION

seRViCe deVelopment

offiCeR

seRViCe mAnAgeR

Gunnedah/Tamworth

sHm/teAm leAdeR

1 Housing mAnAgeR

4 Housing offiCeRs

1 Gunnedah 3 Tamworth

2 ReCeption /Admin AssistAnt

Tamworth

2 pARt time tenAnt

pARtiCipAtion offiCeRs

seRViCe mAnAgeR

Arm/Glen/Inv/Moree

sHm /teAm leAdeR

3 Housing mAnAgeRs

1 Arm, 1 Glen, 1 Inv

2 Housing offiCeRs

1 Arm, 1 Pt Moree

3 ReCeption /Admin AssistAnt

1 Arm, 1 Glen, 1 Inv

Asset mAnAgeR

2 teCHniCAl offiCeRs

2 Asset AdministRAtoRs

mAnAgeR business seRViCes

finAnCe mAnAgeR

ACCounts offiCeR

Payroll/Acc Payable

ACCounts offiCeR

CHief exeCutiVe

offiCeR

boARd of diReCtoRs

exeCutiVe AssistAnt

oRgAnisAtionAl CHARt

7OUR ORGANISATION

Left to right – standing: Hans Mouthaan, Rex Gream (Chairperson) Ian Downs, Malcolm McGown Left to right – seated: Margaret Hansell, Mary Devine, Josephine Heslin.

Special Responsibilities

Member of the Audit and Risk Committee

Rex gReAm Chairperson Appointed 11 April 2008

Current Position Administrative Manager – Roberts & Morrow Financial Services

Experience Over 35 years in the banking and finance industry; board experience with other community welfare organisations

Specific experience in approving development loan applications including assessment of costings, progress payments and end valuations, monitoring of progress payments, and inspections.

2013-2014 boARd of diReCtoRs

8 OUR ORGANISATION


Employee Liaison Officer

josepHine Heslin Director Appointed 15 February 2012

Current Position Manager and Coordinator, Aged and Disability Sector

Experience Previously Project Manager in the Ageing and Disability Sector; Manager at Independent Living Retirement Village; Mortgage Advisor and Business Owner.

joHAn (HAns) moutHAAn Director Appointed 19 May 2014

Current Position Retired

Qualification Trade and Building Certificate

Experience Extensive project – home management


9OUR ORGANISATION

mARy deVine Director Appointed 18 September 2002

Current Position Regional Transport Coordinator, Transport NSW

Qualifications Bachelor of Social Work, Associate Diploma Welfare Worker


Member of the Audit and Risk Committee

iAn downs Director Appointed 1 February 2010

Current Position Education Consultant, Director of NEGS Ltd. Director of NSW Federation of Housing Alliance Secretary – Tilligerry Lions Club, Member of Finance Committee Challenge – Tamworth, Chairman of North West region Aboriginal Education Advisory Board

Qualification Bachelor of Arts, Sydney University, Diploma of Education – Sydney University, M.Ed (Hons) University of New England

Experience Principal at Farrer Memorial Agricultural High School, Tamworth and NEGS, Armidale; Director of Boarding – The Kings School, Parramatta; Chairman of Glen Innes Hospital Board


10 OUR ORGANISATION


Chair of the Audit and Risk Committee

mARgARet HAnsel Director Appointed 10 October 2011

Current Position Consultant, Insurance and Risk Management; Partner Bindawalla B&B; Bindawalla Beef Production

Qualification Graduate Certificate of Management (University of New England), Bachelor of Commerce (University of New England), Fellow, Australian and New Zealand Institute of Insurance and Finance (ANZIIF), Certificate IV Workplace Assessment and Training

Experience Various roles with Allianz, GIO and Marsh Insurance including Risk Management


Company Secretary – appointed November 2009

mAlColm mCgown Director Appointed 24 November 2008

Experience Extensive small business experience

Qualifications Diploma of Agriculture (Hons.), Real Estate Practice Certificate


11OUR ORGANISATION

Once again, it is my pleasure to present the Chairperson’s report of Homes North Community Housing.

The current strategic plan (2013 – 2016), states that Homes North wants to be a leader in the community housing sector within the New England & North West region. This year Homes North has taken various opportunities and actions to enhance their leadership and reputation.

Some of these actions were:

• Implementation of a successful merger with Inverell Community Housing Inc.;

• A full organisational review of operations;

• Increasing the stock of affordable housing available by fulfilling the commitment made under the Housing NSW Title Transfer scheme;

• Making three submissions to government enquiries, both in our own right as Homes North and as a member of the Housing Alliance;

• Sought feedback from stakeholders to assist with sustainable tenancies;

• Three years accreditation status received under the National Community Housing Standards (2010);

• Implementation of a fully integrated specialised IT property management and financial software system.

MERGER wITH INVEREll COMMUNITY HOUSING In December 2013 Homes North was approached by Inverell Community Housing Inc. (ICH) to provide tenancy and financial management services on a fee for service basis. Early in this management period the ICH management committee approached Homes North regarding the possibility of a merger and negotiations began. An agreement was entered into in April 2014 and the two organisations merged on 1 July 2014. This merger further extended the region of properties managed by Homes North in the North West of NSW to Inverell and Moree and increased the number of properties under management by 115. As part of the merger, the Homes North board welcomes Hans Mouthaan as their newest director. Hans Mouthaan was the Chairperson of Inverell Community Housing Inc. and brings extensive experience in the area of property management & maintenance. I thank Hans, the previous ICH management committee and our senior management team for the smooth transition to Homes North. I also wish to specifically thank the following people who deserve special recognition for the work they undertook in the lead up to the merger:

• Kate Evans, Armidale Service Manager, who coordinated the transition of tenancy management services;

• Lorri Lynch, Glen Innes Housing Manager, who took on the role of managing the Inverell office and has now accepted the position on a permanent basis;

• Inverell Community Housing Administration Assistant/Trainee, Cheyenne Thompson, who applied for and was successful in obtaining the Administrative Assistant position at the Inverell office.

ORGANISATIONAl REVIEw AND RESTRUCTUREDue to the changing nature and strategic focus of Homes North operations it was decided that an independent organisational review was necessary to ensure the strategic plan could be achieved. This review led to a restructure of the organisation. A number of new positions were created and some others identified as being redundant. Overall there has been a net increase of two employees. As part of this restructure process voluntary redundancies were offered to six staff and were accepted by five staff. Most of these staff had been employed by Homes North for over five years and I thank them publicly for their contributions to Homes North during a period of rapid growth and change. On governance matters, the Audit & Risk Committee, chaired by Margaret Hansell, is now fully established. This committee met five times in the last financial year and provided oversight of the financial and risk management governance of the company.

INCREASING THE STOCk OF AFFORDAblE HOUSING AVAIlAblEHomes North completed the purchase of an additional eight properties during the financial year, bringing the total number of properties purchased under the Housing NSW Vested Asset agreement to 15. A further four contracts were entered into, two of which settled in July and the remaining two settled in October. This ensures that Homes North remains on track or ahead of their commitment with Housing NSW to increase the stock of affordable housing available by purchasing 30 properties over 10 years.

SUbMISSIONS TO GOVERNMENT INQUIRIESHomes North, along with the other Housing Alliance partners, submitted three papers to Government during the year, covering a variety of topics relevant to the community housing sector. These papers contained research commissioned by the Alliance to better understand the economic and social impacts of the Community Housing sector. A new memorandum of understanding between the Housing Alliance members has been entered into, re-affirming and clarifying the terms of our commitment to work together.

CHAiRpeRson’s RepoRt

12 OUR ORGANISATION

STAkEHOlDER FEEDbACk – FROM TENANTS AND SUPPORT AGENCIESHomes North has over 30 stakeholders including various support agencies with whom they liaise. This interaction with support agencies is considered essential to the supply of quality services to our clients. The long term benefits not only include the supply of secure affordable housing to the most vulnerable in our community, but support for tenancies at risk. This support for tenancies at risk, by working with other support agencies, leads to a greater number of sustained tenancies and higher levels of tenant satisfaction. Homes North aims to ensure that we are a community where everybody has a place to live. The number of hours spent by staff interacting with other agencies is significant and the board appreciates the time taken by staff to ensure strong links are maintained with support services. These links lead to more efficient delivery of our services and ultimately a better quality of life for our clients.

This interaction is also reflected in the annual Tenant Satisfaction Survey completed in August where Homes North achieved an overall tenant satisfaction rating of 93%. In comparison to other community housing providers Homes North was ranked number one in 11 of the 13 benchmark areas. In the remaining two areas, Homes North was ranked number two. One area that was especially pleasing was a 25% lift in satisfaction in the way Homes North handles complaints. This is an outstanding result and an indication of the hard work of all our staff. On behalf of the board I commend all staff on their contributions to this result.

STAFF/bOARD TRAINING AND DEVElOPMENTI also take this opportunity to congratulate Melony Connors and Leonie Ballantine-Phillips for completing their Certificate IV in Social Housing. Melony and Leonie are joined by another four staff, who are continuing their studies in various social housing courses. The board actively encourages staff to undertake external studies to further improve their skills.

A number of board members, along with Maree McKenzie, attended the Better Boards conference in Adelaide in August. The conference proved to be of great benefit to all directors. We are well aware of the quality and scope of this organisation and will continue to work hard to help grow with Homes North. A directors’ and management retreat will be held early in 2015 to focus on how we can better work together to achieve the goals of our strategic plan.

NATIONAl ACCREDITATION Homes North was awarded a full three year accreditation under the new National Accreditation Standards (2010) system in November 2013, after an extensive independent audit and review of our systems, policies and procedures. This achievement reflects the tremendous work being done by all staff. Once again I extend the appreciation of the board to all staff of Homes North for the achievement of this milestone.

IMPlEMENTATION OF NEw INTEGRATED FINANCE AND HOUSING INFORMATION TECHNOlOGY SYSTEMOver several years, Homes North has been searching for a suitable fully integrated software system that would suit our property and financial management needs both now and into the future. A contract was signed in December 2013 and in July 2014 Homes North began implementation of a UK based IT system called Kypera. Whilst there have been some delays in implementation and some initial hurdles to overcome, it is anticipated that there will be significant long term benefits to Homes North’s operational effectiveness. The board acknowledges the strain this has caused to some staff directly affected by the implementation.

FINANCIAlHomes North continues to maintain a strong financial base with an operational surplus of $672,875 (surplus $676,442, 2013). This indicates that Homes North is well positioned to be able to:

1. Service the loan facility of $2 million, when required, as outlined in the financial summary; and

2. Continues to be financially sound, providing a firm foundation for any future growth opportunities; and

3. Fund the cyclical maintenance upgrades required to maintain the capital asset portfolio of properties.

The balance sheet has been further strengthened by the title transfer of the remaining 128 Economic Stimulus properties in January 2014, under the Housing NSW vested Title Transfer scheme. This transfer was anticipated in the annual report last year. These properties were recognised by Homes North at their fair market value ascertained by an external independent valuer, in line with the board’s policy on property values and accepted accounting standards. The other properties where Homes North holds title were also revalued, resulting in an increase in value of $1,159,343. Homes North continues to maintain a strong balance sheet position.

The Chief Executive Officer, Maree McKenzie, has once again led a full team approach to offering our clients an exceptional service. The board is aware of the pressures that she and all of the staff have experienced this year due to the issues outlined through this report. I thank her, on behalf of the board, for her dedication and her leadership during this period of change.

On a personal note I thank my fellow board members for their dedication and contribution throughout the year. It has been a challenging and, ultimately, very successful year for Homes North. Their expertise and team approach underpins my confidence in this organisation and I look forward to working with everyone as we grow into the next year.

13OUR ORGANISATION

After two years of consolidation following several years of rapid growth – this year was one to focus on our external environment and positioning our service for the future.

Our new strategic plan spanning 2013-2016 is now guiding our operations.

The development of the plan included a comprehensive process that ensured the strategies we were to embark on are relevant to the communities we serve while building the ongoing resilience of our service.

ConsultAtion

STAkEHOlDER SURVEY• Valuable insights from over 30 key stakeholders

TENANT FEEDbACk• Review of tenant survey results and comments

• Review of complaints register

STAFF CONSUlTATIONS• Review of our strengths, weaknesses

and opportunities

• Analysis of client demand and housing markets

• Input from all staff on their ideas

plAn deVelopment

• Board review of consultation outputs

• Board decision-making on strategies to adopt

• Opportunity for further staff input

• Adoption of new plan

ouR tHRee stRAtegiC goAls

• Strengthening communities

• Supporting individuals

• Providing excellent service

ReView of ResouRCes

An organisational review was completed to determine resources and skills needed to meet outcomes set out in the strategic plan

NEw POSITIONS CREATED:• Service development officer responsible for

community engagement and quality assurance

• Two new senior housing managers to support the housing teams

• Two part-time tenant participation workers to specifically focus on tenant relations

• Additional technical officer to meet the demands of new additional fee-for-service maintenance contracts as well as the increase in the portfolio under management

Developing our strategic plan

CHief exeCutiVe offiCeR’s RepoRt

Maree McKenzie

14 OUR ORGANISATION

pRogRess

stRengtHening Communities suppoRting indiViduAls pRoViding exCellent seRViCe

• Homes North to host a region-wide housing conference; initial discussion held with key stakeholders

• Awareness raising activities on a variety of housing related issues

• Media exposure with articles in local papers and several radio interviews

• Submissions to three government inquiries

• Called to present at the NSW inquiry into social and affordable housing

• New partnerships developed across New England and North West NSW as part of the homelessness sector reforms

• Additional transitional housing properties managed by Homes North

• Housing NSW presentation to all staff; meeting on housing products and services

New position created that is responsible for:

• Seeking and developing new partnerships to provide more effective support for those in need

• Submitting funding applications to access additional resources to support individuals

• Work commenced on the development of a “community housing for Aboriginal people” strategy, including a reconciliation plan; a new position created that includes responsibility for implementation of the strategy

• Negotiated the provision of additional support services for our tenants in Gunnedah; under the project, Homes North has provided funding for the supervision of volunteers who are assisting tenants in need

• New partnerships entered into across New England and North West NSW, including service level agreements with all refuge services in the region; these agreements are developing stronger links across the housing continuum for the benefit of services users

• Management of additional transitional properties across the region; this will also facilitate a more integrated response to moving people from homelessness into sustained tenancies

• Achieved full three year accreditation

• New position created to take responsibility for over sighting continual improvement strategies

• Internal audit plan developed

• Improved processes implemented for annual client and property file audits

• Three staff completed Certificate 4 Social Housing

• Two staff commenced Certificate 4 Social Housing

• Four staff completed Diploma in Social Housing

• Four staff commenced Diploma Social Housing

• Staff training conducted on managing complaints

• Tenant satisfaction survey reflects improvements in service delivery. Satisfaction rating in 2012/13 was 83%; satisfaction rating 2013/14 was 93%

• Implemented handyperson pilot in Armidale and Tamworth to improve maintenance response times

• Frontline services restructured in some locations to improve consistency of service provision

• New operational fortnightly reports implemented to improve accountability; as a result, arrears and vacancy times have improved

• New positions created that will assist with improved performance monitoring

• Standards set and implemented for reception areas

• New IT system procured which will facilitate standardisation of processes and communications

• External whistleblower appointed

• Policies continued to be reviewed during the year

• Asbestos register and asbestos management plan completed

• New strategic asset management plan completed

• 15 newly developed affordable housing properties acquired

2013-2016 stRAtegiC plAn

15OUR ORGANISATION | CHIEF ExECUTIVE OFFICER’S REPORT

ARReARswHY DO wE MEASURE THIS?• Helping tenants manage arrears saves tenancies

• Ensures we are monitoring our financial viability, as rental revenue pays for almost all of our expenses

benchmark 2013/2014 Performance

4% of rent charged 3.86%

AnnuAl tenAnt sAtisfACtion suRVeywHY DO wE MEASURE THIS?• Our service needs to work for the people who use it

• We believe in providing excellent services, which we only know if we ask our service users

• Our regulators also want to know that we are living up to what we say we do and also delivering on our contracts


Overall satisfaction with housing services: 85% (HN benchmark)

93%

6%

5%

4%

3%

2%

1%

0%Q1 Q2 Q3 Q4

2012 - 2013 2013 - 2014

RENT ARREARS %

Benchmark

RepoRt CARd

16 OUR ORGANISATION | CHIEF ExECUTIVE OFFICER’S REPORT

tHe time pRopeRties RemAin VACAnt befoRe ReletingwHY DO wE MEASURE THIS?• People in need of housing are waiting for an

allocation and may be homeless or inappropriately housed – every day counts for them

• Unnecessary loss of rent could be money spent elsewhere: acquiring additional properties, repairs and maintenance etc

• Ensures we are monitoring our financial viability as rental revenue pays for almost all of our expenses


Vacants: 14 days - A unit that is ready to be occupied

26 days

Voids: 28 days – An unoccupied tenancy unit where maintenance has either been deferred or has not been completed

18 days

35

30

25

20

15

10

5

0Q1 Q2 Q3 Q4

140

120

100

80

60

40

20

0Q1 Q2 Q3 Q4

AVERAGE TURNAROUND TIME - VACANT

AVERAGE TURNAROUND TIME - VOID

2012 - 2013 2013 - 2014

Benchmark (14)

Benchmark (28)

(Day

s)(D

ays)

RepoRt CARd

17OUR ORGANISATION | CHIEF ExECUTIVE OFFICER’S REPORT

Special thanks to all Homes North staff who reviewed all our tenants’ feedback from the last survey and put forward strategies to improve our performance. Their hard work has paid off and our tenants have noticed a difference.

Of 13 community housing providers benchmarked across Australia, Homes North ranks the highest in Overall Satisfaction and the highest across 13 separate performance areas. Congratulations to our staff on this outstanding achievement!

*With our two new Tenant Participation Officers due to be employed shortly, we are confident that we will improve

upon our Response Rate ranking in the coming year.

oVeRAll sAtisfACtion

sAtisfACtion 2014

nRsCH tHResHold

2014 Vs. fedeRAtion benCHmARk

CHAnge 2013 – 2014

(HS11) Housing services 93% 75% 84% +10%

(RM10) Repairs 83% 75% 76% +2%

(HS07) Property condition 92% 75% 86% +2%

(CA09) Complaints 67% 48% +25%

(NH10) Neighbourhood 92% 84% +9%

(CM10) Communication 90% 82% +3%

(TE01) Tenant engagement 84% 76% +7%

NRSCH – National Regulatory System for Community Housing

#1 #2 #13

Homes noRtH RAnk # (out of 13) in benCHmARk gRoup

Repairs and maintenance

Influencing your decision-making

Response rate*

Overall satisfaction

Property condition

Repair quality

Value for money

Communications

Neighbourhood

Appeal knowledge

Complaints knowledge

Complaints handling

Tenants’ rights upheld?

Information provision

Tenant involvement

Listening and acting on tenants’ views

we listened

18 OUR COMMUNITY

Homes noRtH Housed A totAl of 170 new HouseHolds in tHe yeAR 2013-2014

TENANCIES as at 30th June 2014 containing

a disability

NEw TENANCIES during the year

2013 - 2014 (homeless at time

of allocation)

TENANCIES as at 30th June 2014 by cultural

identity


2013-2014 (greatest need at time of allocation)

TENANCIES by age as at

30th June 2014


2013-2014 (youth)

Disability (396) None (343)

New Tenancies (51%) Homelessness (49%)

Aboriginal (170) Australian (540) Other (29)

Greatest Need (60%) Other (40%)

55 Years and Over (306) 25 - 55 Years (353) 24 Years and Younger (80)

Youth (34%) Other (66%)

wHo did we Help tHis yeAR?

19OUR COMMUNITY

An exciting new venture was undertaken in January 2014, with the establishment of the Tenant Community Garden, situated at our Johnston Street unit complex in Tamworth. This has been a fantastic new initiative implemented by Homes North Community Housing, with the driving force behind the project coming from one of our long standing tenants, Margaret (Peggy) Marshall.

Peggy carried out research of other community gardens in the district, such as the one implemented in Denne Street Tamworth by Lifeline, and began consultation with our Asset Team in the Tamworth Office, to begin the rejuvenation of the common area at the complex.

The ‘wish list project’ was created in May 2013 by staff of Homes North and members of our Asset team, which allowed for funding of tenant participation programs, rejuvenation of common areas, and any other projects put forth for consideration. It was this funding that enabled the community garden to be established, with the purchase of raised garden beds, timber for edging, mulching and other materials as required.

After six months the tenants are now reaping the rewards of growing fantastic produce, including: spinach, herbs, tomatoes, zucchinis and squash. The Community Garden is also strengthening the personal relationships between tenants, with each sharing the common goal of making the community garden a success.

In acknowledgement of how successful the community garden had become, Homes North decided to direct further funding from the ‘wish list project’ toward the installation of a beautiful timber picnic table and cover way which was constructed in July 2014. In addition to this a cement footpath is currently being constructed, designed specifically for wheel chair access to allow two of our disabled tenants access to participate and contribute to the community garden.

With Peggy leading the charge and encouraging other tenants at the complex to engage in the project, our tenants have been able to have significant input into the design of the community garden, and develop a sense of community ownership over the project. This has proven to be the successful ingredient needed for not only the initial implementation of the project, but also for the continued growth and sustainability for a long term partnership between Homes North and our tenants who have made the Johnston Street unit complex their home.

Margaret (Peggy) Marshall and Lance Hazlewood Community Gardens

building Community tHRougH gARdening

20 OUR COMMUNITY

Brian MarshallPatricia (Pat) Fletcher

Since becoming tenants of Homes North Community Housing in 2014, Patricia Fletcher, or “Pat” (as she affectionately likes to be known) and her husband John have been engaging in tenant participation programs.

This year they are busily preparing their Anthony Road unit yard for the judging of the Homes North garden competition in November. Pat’s love of gardening and the joy she experiences from beautifying her living environment doesn’t stop at the boundaries of her own unit; she is also an active member in her unit complex, helping to rejuvenate the common area gardens.

Homes North is instrumental in encouraging our tenants to engage in tenant participation programs and activities, and have once again directed funds to provide mulching, seedlings, hoses and any other materials required, to help our tenants maintain and rejuvenate the common area gardens. We know that these types of activities are vital in bringing people together, and really strengthening the feelings of ownership, belonging, and instilling a sense of pride. And who doesn’t feel better when they are living in an environment that looks beautiful and well cared for?

These gardening activities at the complex have helped Pat feel like a contributing member of her community, where she is making strong friendships with other tenants. In Pat’s own words, she has ‘found her last home’.

Another of our tenants, brian Marshall, who has been with Homes North since September 2008, only discovered last year that he had inherited his mother’s ‘green thumb’. In just 18 months brian has transformed his garden from being totally bare to now producing a huge range of vegetables and flowers – everything from poppies to daffodil, pansies, petunias, climbing roses, calendulas, stocks and sweet peas.

His neighbours certainly can’t complain either – they reap the health benefits of Brian’s home grown veggies and generosity when they tuck into the excess beetroot, tomatoes, chokos and squash that Brian passes along.

Gardening has proven a great way for Brian to connect with the greater Homes North community. He’s even jumped on board behind the scenes of the Homes North gardening competition, where he put up his hand to be a judge in the Gunnedah Division.

building Community tHRougH gARdening

21OUR COMMUNITY

22

22 OUR COMMUNITY

“TRY bEFORE YOU bUY” PROGRAMThe “Try Before you Buy” program is a joint project with Housing NSW, offering properties to tenants at below market rent to households with low to moderate incomes, in order to facilitate a pathway to home ownership.

“As per our conversation earlier today, I wish to give two weeks’ notice of intention to vacate X Alexander St Armidale. Please pass my sincerest thanks to XXX for accepting us into the scheme, as without this chance to save money on rent we would have had a much more difficult time getting to the point where we could buy our own home.”

Excerpt from Homes North tenant feedback

Having access to stable, suitable and affordable housing was critical at this juncture in allowing these tenants to be able to successfully transition to home ownership.

EMPlOYMENT RElATED ACCOMMODATION PROGRAMAllira accessed the Homes North Employment Related Accommodation (ERA) programme and was supported to move from Moree to Armidale so that she could take up employment.

Knowing how hard it can be for Aboriginal people to access accommodation in the private rental market, Allira and her family found the idea of relocating from Moree to Armidale daunting. However the opportunity to apply for the ERA program made the transition a lot easier than they had at first anticipated.

With the benefit of having affordable and appropriate accommodation, Allira’s children were able to settle into school very quickly, as did Allira in her new job as a disability support worker in Armidale.

“With this program being available to me, it has created opportunities for me and my children.”

A young man was housed by Homes North in 2008 at the age of only 18. At this time, he had no family support, and was in receipt of Youth Allowance from Centrelink.

With the stability that Homes North accommodation provided, he was able to access a range of supports and develop the life skills he required to take control of his future.

He gained employment in 2010 with a large local employer, and worked there full time for three years. He then chose to take on an apprenticeship as a painter in 2013. He is now in the second year of this apprenticeship, and is employed full time as a painter.

He has sustained his tenancy throughout, and has maintained the property well. He has now given notice that he wishes to vacate the property, because he is setting up house with his partner, and they have secured housing in the private rental sector.

Allira Cutmore with her children Jyarna and Dion

Allira has gone from strength to strength, and is now furthering her career options by undertaking a Bachelor of Social work at the local University of New England which has always been a goal of hers.

Access to affordable housing in areas that provide employment and higher education opportunities should not be undervalued, and Homes North is proud to be able to deliver the ERA program which supports Aboriginal Australians to take up these opportunities.

COMMUNITY HOUSING AS A STEPPING STONE

pRoViding oppoRtunities

23OUR COMMUNITY

Ageing, Disability and Home Care – Supporting older people, people with a disability and their carers to live in their own home and participate in community life.

Armidale Family Referral Service – Refers families with children to support agencies that are required to keep families together.

Armidale Sanctuary – Provides a wide range of assistance to refugee families. Advocates on behalf of our tenants because of the language barrier.

Armidale women’s Housing Group – Provides short term housing to women who are disadvantaged. Enables clients to secure more permanent secure housing.

Armidale women’s Shelter – Provides safe, secure accommodation for women and their children escaping domestic violence. Advocates on behalf of clients to gain more permanent stable housing.

benevolent Society – Assists in supporting the needs of individual people through direct support services, and also works with whole communities.

brighter Futures – Provides assistance to families with children.

Challenge Community Services – Assists to ensure people with a disability, children and vulnerable members of the community have the same rights and entitlements as all other members of the community

Community Services – Promoting the safety and wellbeing of children and young people. Working to build stronger families and communities.

EACH – Provide services available for every age group with a strong focus on supporting vulnerable communities. Lead agency for the New England Regional Sustainable Housing and Homelessness Group.

Family Referral Service – Provides information and links vulnerable children, young people and their families to a range of support services in their local areas.

Freeman House (St Vincent de Paul) – Provides both residential and community based programs for adults experiencing homelessness and/or addiction.

Glen Innes Community Centre – Provides support and assistance to the community, including signposting to relevant agencies.

Homes North Community Housing would like to acknowledge and thank the following organisations and individuals for assisting and supporting Homes North Community Housing throughout the year.

“We believe that a sincere and outcomes – focused collaboration can change lives”

Homes North would like to particularly highlight and acknowledge the critical role our support partners play in enabling us to meet our goals.

• The NSW Community and Private Market Housing Directorate

• The NSW Federation of Housing Associations

• Land and Housing Corporation

• Aboriginal Housing Office

• Local Landlords & Owners/ Local Real Estate Agencies in all servicing areas

• Local Contractors/ Tradespersons in all servicing areas

• New England And Western Tenants Advice and Advocacy Service (NEWTAAS)

• Family and Community Services

ACknowledgement

24 OUR COMMUNITY

Glen Innes Family & Youth Support – Assists families with early intervention, parenting skills and advocates for housing.

Gunida Gunyah – Strives to provide culturally, responsive, quality housing for Aboriginal people.

Gunnedah Community Cottage – Hope House – is a community facility providing offering a range of services and programs for anyone in need of a helping hand, support or friendly advice.

Gunnedah Family Support Service – Offers support, information and practical assistance to adults, children, young people and families in the Gunnedah Local Government Area.

Gunnedah Shire Council – Provides community support and planning.

Inverell Accommodation Services – Assists people with disabilities gain secure housing. Manage supported accommodation for people with disabilities in group homes and independent accommodation units.

Inverell women’s Refuge – Provides safe, secure accommodation for women and their children escaping domestic violence. Advocates on behalf of clients to gain more permanent stable housing.

Joblink Plus – Provides employment and welfare services, support and training to the community with a particular focus on anyone who is disadvantaged in any way.

Mara-Mara Community Inc – Provides Housing Services for the local Aboriginal Community .

New Horizons – Offer services covering aged care, disability services, employment, Indigenous support, homelessness, mental health and social enterprise.

Northern Community Care – Assists clients in Glen Innes, Tenterfield and Inverell with disabilities & mental health issues such as living skills, shopping and transport.

Pathfinders – Provides temporary accommodation to young people between the ages of 16-25 who are homeless or at risk of homelessness.

Richmond PRA – Works in local communities to help people on their mental health recovery journey.

Salvation Army – Assists clients with homelessness, financial issues and counselling services.

Sunnyfield Independence – Provides assistance and support to clients with intellectual disabilities.

TAFE New England – Supports the Employment Related Accommodation Program and encourages opportunities for Aboriginal clients from remote areas to undertake studies.

Tamworth Family Support Service – Provides a wide range of support and education to children and families, as well as a range of homelessness services and programs.

Tamworth local Aboriginal lands Council – Provides Housing Services for the local Aboriginal Community, as well as education and employment assistance through the Tamworth Opportunity Hub.

Tamworth women’s Refuge – Provides crisis accommodation and outreach support for women and children.

Tamworth Youth Accord – Provides case management for youth who are homeless or at risk of homelessness.

Tamworth Youth Refuge – Provides crisis accommodation and outreach support for youth.

Tenterfield Community Hub – Offers information and assistance with other services, provides office space for Homes North’s weekly outreach service.

Tenterfield Family & Youth Support – Assists families with early intervention, parenting skills and advocates for housing.

Tenterfield, Inverell & Glen Innes Youth Services Provides short term housing for youth and assists them to develop the skills necessary to sustain a tenancy.

University of New England – Supporting the Employment Related Accommodation Program and encourages opportunities for Aboriginal clients from remote areas to undertake studies.

Uniting Care Ageing – Provides housing and support for the aged.

ACknowledgement

25OUR COMMUNITY

Asset RepoRt 2013/2014 Homes North Asset Services team is responsible for maintaining our portfolio of properties, both owned and managed, to a standard that ensures at a minimum compliance with:

• The Residential Tenancies Act;

• Land and Housing Asset standards;

• Australian standards;

• Building Code of Australia; and

• Local council requirements

THE ASSET TEAM• Ensures properties meet our client’s needs, such as

disability modifications for tenants with limited mobility

• Undertakes planned and cyclical maintenance for the property portfolio

• Oversees and undertakes responsive maintenance for the property portfolio

• Assesses the ongoing viability and performance of a property

• Manages insurance claims

• Develops documents such as the asbestos register, asbestos management plan and asset related policy and procedures

• Monitors the quality and value for money of contractor services

• Ensures contractor compliance to HNCH contracts and WHS requirements

HigHligHts• Acquisition of eight new properties in

Gunnedah and Tamworth this financial year

• Overseeing $1.2m refurbishment and additions to the Minoa Court unit complex in Tamworth

• New business providing maintenance and upgrade services to crisis and transitional housing properties across the New England and North West NSW

• Improved tenant satisfaction of repairs and maintenance in the tenant survey

• Asbestos awareness training for all staff

• Gunnedah Planned Maintenance Project completed

• Tamworth, Armidale, Moree and Inverell Planned Maintenance Project commenced

sinCe tHe end of tHe finAnCiAl yeARThe Asset Team has facilitated the acquisition of four new properties in Tamworth and Armidale: 11 and 11a Darien Ave, Tamworth, 1 and 2/43 Kennedy St, Armidale.

The team is currently working on a proposal to build six affordable housing units in Armidale.

26 OUR SUSTAINAbIlITY

Asset RepoRt 2013/2014 HASI PlUS PROJECTMinoa Court is a 20 unit complex of which 15 units are to be utilised as transitional housing designed to aid people with mental health challenges transition from institutional living back into the community. This facility will be staffed by Richmond PRA 24/7 (mental health service), with tenancies and building maintenance managed by Homes North. The remaining five units will also assist clients with a mental illness who are homeless and need support.

The first stage of this project to refurbish the existing 20 units is 100% complete.

The second stage of this project to build the new office and amenity complex is 70% complete and is on track for full completion by 3/11/14.

NEw bUSINESS OPPORTUNITIES• Homes North was successful in acquiring a contract to provide

building maintenance services to refuge and transitional properties across New England and North West NSW. There are 31 properties located in Tamworth, Armidale, Inverell, Narrabri, Moree, Lightning Ridge, Walgett and Brewarrina. The Asset Team has completed planned maintenance upgrades on all 31 properties to a value of $443,685.42.

• Homes North merged with Inverell Community Housing on 1/7/14, which increased the number of properties managed by Homes North by 115. The asset team have now scoped the majority of properties in Moree and Inverell managed by Homes North on behalf of Land and Housing Corporation.

ASbESTOS AwARENESS TRAININGThe Asset Team rolled out asbestos awareness training for all staff to ensure a consistent and appropriate response to asbestos-related maintenance and safety issues.

impRoVed tenAnt sAtisfACtionThere was an overall increase in tenant satisfaction with repairs and maintenance. The annual tenant satisfaction survey shows an increase from 82% satisfied in 2013 to 83% in 2014.

27OUR SUSTAINAbIlITY

gunnedAH plAnned mAintenAnCe pRojeCtAS AT 15/9/14157 of 158 Gunnedah properties have been assessed by our in-house qualified staff and a scope of works developed to ensure the properties are compliant with our contractual and legal obligations; effectively managing the ongoing condition of the properties. 148 upgrades have been completed.

tAmwoRtH, ARmidAle, moRee And inVeRell plAnned mAintenAnCe pRojeCtAS AT 15/9/14

Tamworth

• 37 of 66 properties have been scoped• 26 scopes have been issued and are

“works in progress”• Six upgrades have been completed

Armidale

• All 18 properties have been scoped• Five scopes have been issued and are

“works in progress”• Five upgrades have been completed

Inverell

• 18 of 19 properties have been scoped• Three scopes have been issued and are

“works in progress”• Zero upgrades have been completed

Moree

• 24 of 27 properties have been scoped• One scope has been issued and is “work in progress”• Two upgrades have been completed

oVeRAll mAintenAnCe expendituRe 2013-2014TOTAl ExPENDITURE $1,603,678.00

Responsive $612,664.00

Planned maintenance $903,243.00

Cyclic maintenance $76,328.00

Disability modifications $11,443.00

ben Ireland Asset Manager


tHe Audited finAnCiAl stAtements foR Homes noRtH sHow A suRplus of $17.3 million (2012-2013 defiCit $4.4 million). tHe suRplus inCludes:

$15.5 million TITlE TRANSFER

The title transfer of the remaining 128 Nation Building Economic Stimulus Properties (“NBESP”) vested in Homes North from Housing NSW in January 2014. These properties were recognised at the valuation obtained from an external independent valuer.

$1.2 millionREVAlUATION

This increment is made up of: a 5% ($756,000) increase in the valuation relating to the 122 (NBESP) properties - title transferred in April 2011; and a 10% ($403,000) increase in the valuation of Homes North’s 15 freehold properties where title was held as at 30 June 2014.

$0.7 millionUNDERlYING SURPlUS

If we exclude the effect of transfers of property and revaluations of property the surplus for the current year is $673,000 (2013, surplus $676,000). Overall rental income has increased by 6% and tenancy property and management expenses by 4%.

finAnCiAl summARy

29OUR SUSTAINAbIlITY

HOw OUR PROPERTIES ARE VAlUEDThe carrying value of all properties where title is held by Homes North is measured by obtaining an initial external independent valuation for financial statement purposes. Every property is then revalued by an external independent valuer once every three years. The average increase or decrease in independent valuations is then applied as a director’s valuation to the remaining property portfolio on an annual basis to make up the carrying value of properties.

It is anticipated that in future years independent valuations for these properties will slowly increase in line with the property market. The company has a policy of obtaining independent property valuations for every owned property on a rolling basis once every three years. This means one third of the portfolio is independently valued on an annual basis. Annual increments/decrements are then applied as a director’s valuation to the remaining portfolio by location.

COMMITMENT TO PURCHASE 30 PROPERTIES OVER 10 YEARSHomes North’s commitment to purchase 30 freehold properties over 10 years under the Housing NSW vested title agreement is well underway. Over the year the company settled on a further eight properties, four located in Gunnedah and four in Tamworth. As at 30 June 2014, the company held title to 15 properties and had made deposits on a further four properties (two existing properties in Armidale and two new properties in Tamworth). The two properties in Tamworth settled in July 2014 and the Armidale properties are expected to settle in September/October 2014.

bANk lOAN FACIlITY (for the purpose of meeting NBESP leveraged asset program commitments)

Homes North has a $2 million loan finance facility available secured by owned properties. This loan facility is fully flexible and can be drawn down and repaid. During the year the loan facility was partially drawn down and then repaid in full. Next year Homes North plans to purchase a further six to eight properties, to be funded from a mixture of retained earnings and borrowings. It is anticipated that loan funds will be drawn down in order to maintain a working capital cash balance of $500,000.

PlANNED MAINTENANCEAs at 30 June 2014 Homes North was responsible for the planned maintenance of 649 capital properties. This year the company increased the provision from $1,300 to $1,500 per property per annum. Making a fixed annual provision for planned maintenance ensures that variations, which occur from year to year in our 25 year planned maintenance programme, are managed.

The accumulated reserves associated with this provision now total $1.0 million or $1,592 per property as at 30 June 2014. During the year actual expenditure totalled $979,571 against a provision of $969,751.

MERGER wITH INVEREll COMMUNITY HOUSING INC.Homes North made a strategic decision to merge with Inverell Community Housing from 1 July 2014. As part of the due diligence work carried out prior to making this decision, Homes North managed their entire business on a fee for service basis for over three months. The initial due diligence work indicated that a significant number of capital properties would require planned maintenance upgrades. Homes North has therefore decided to focus the cyclical planned maintenance program on the Inverell and Moree portfolio in the 2014-2015 to ensure properties are maintained at or above required standard.

finAnCiAl summARy


opeRAting loCAlly And CollAboRAting RegionAlly The Housing Alliance is a strong alliance of comparable regional housing organisations who through collaboration, innovation and sharing, strengthen their delivery of services at a local level.

The Housing Alliance offers a vision to the greater community housing sector of an innovative redefinition of a sector culture based on trust and focused on collaboration over competition. Indeed, community and collegiality is why we work in the social housing sector, and the Housing Alliance is consciously structured to be an embodiment of those values.

Stronger than a ‘partnership’, but stopping short of a merger, the Housing Alliance’s four member organisations, when taken together, become the fourth largest CHP in the country by number of tenancies managed (approximately 3,200).

All four organisations provide community housing services in regional NSW locations, all have operations spanning large geographic areas with multi-site offices, all are registered as mid-size Class 1 or 2 providers within the sector, and all have recently experienced rapid growth in response to government policies such as stock transfer.

The Housing Alliance is a mechanism that allows the four members to remain viable, independent and anchored within their local communities while reaping some of the benefits of scale and a larger operation.

AlliAnCe pARtneRsHOMES NORTH COMMUNITY HOUSING CO lTD17/93 Faulkner Street Armidale NSW 2350

PO Box 1146 Armidale, 2350

T: (02) 6772 5133 F: (02) 6771 2362

www.homesnorth.org.au

HOMES OUT wEST139 End Street Deniliquin NSW 2710

PO Box 922 Deniliquin NSW 2710

T: (03) 5881 4182 F: (03) 5881 8361

www.homesoutwest.com.au

HOUSING PlUSSuite 8, Level 2, 113 Byng Street ORANGE NSW 2800

PO Box 968 ORANGE NSW 2800

T: 02 6360 3433 F: 02 6361 1609

www.housingplus.com.au

NORTH COAST COMMUNITY HOUSING COMPANY31 Carrington Street Lismore NSW

PO Box 145 LISMORE NSW 2480

T: 02 6627 5310 F: 02 6622 4261

www.ncchc.org.au


ouR Housing AlliAnCe Homes noRtH is A pRoud membeR of tHe Housing AlliAnCe

31OUR HOUSING AllIANCE

VAluesTRUSTTo trust each other in an honest, fair and reliable way.

OPENNESSTo encourage open sharing of opinions, views and resources.

ExCEllENCETo strive to excel and make a positive difference in everything we do.

EQUITYTo value and respect each other as equal and unique members of the housing alliance.

goVeRnAnCe

EVIDENCE bASED

RESEARCH

bEST PRACTICE SERVICE DElIVERY

THROUGH NETwORkING

ADVOCACY/ GROUP REGIONAl REPRESENTATION

To share knowledge and build ‘agile capacity’. Consultancy, legal, technical and other costs can be spread across four organisations.

This will build a culture of strategic agility with alliance members able to effectively respond and innovate for regional solutions to housing need.

puRpose

32 OUR HOUSING AllIANCE

business objeCtiVe 1

To undertake evidence-based research that enhances our businesses, provides opportunities for funding and informs innovation.


To provide networking and support opportunities across all levels of the organisations to enrich best practice.


To have a clear and succinct framework of governance based on the values of the Housing Alliance.


By being an effective community anchor and through advocacy and communication, raise awareness of regional issues at local, regional and national levels.

ACHieVements

• Commissioned ‘Best Practice Alliances’ research paper by Dr Tony Gilmour

• Commissioned Western Research Institute to undertake Economic Impact Study into the economic contribution of our operations on our regions

ACHieVements

• Active network groups across all organisational levels from directors, CEOs, middle managers and specialist workers

• Held third Annual Alliance Forum in Sydney

• Cross partner training for new staff

ACHieVements

• Housing Alliance Charter created and adopted by all four boards

• MOU reviewed and resigned

• Clear and succinct strategic plan developed for Housing Alliance

• Housing Annual Report developed for all four members’ annual reports

ACHieVements

• Won NSW AHI Award for Excellence in Leading Innovation for the Alliance business model

• Runner up National AHI Award for Excellence in Leading Innovation

• Housing Alliance and website launched at National Housing Conference

• Submissions made to NSW and Federal Parliamentary Inquiries into social housing focused on regional issues

business objeCtiVe

33OUR HOUSING AllIANCE

ECONOMIC IMPACT OF THE HOUSING AllIANCE ON REGIONAl ECONOMYWhen flow-on effects are taken into account, the combined operational and capital expenditure of the Housing Alliance members in 2012/13 is estimated to generate the following regional economy impacts:

• $27.07millioninvalueadded • $12.99millioninhouseholdincome • 203FTEjobs

ECONOMIC IMPACT OF THE HOUSING AllIANCE ON NSw ECONOMYWhen flow on effects are taken into account the combined operational and capital expenditure of the Housing Alliance members in 2012/13 is estimated to generate the following state economy impacts:

• $45.31millioninvalueadded • $22.52millioninhouseholdincome • 303FTEjobs

The Housing Alliance - left to right: Geoff Mann, Karen Andrew, Maree McKenzie, John McKenna

eConomiC impACt

34 OUR HOUSING AllIANCE

Homes North Community Housing Company ltdAbN 78 014 531 758

AnnuAl AuditedfinAnCiAl

stAtements

For the year ended 30 June 2014

35

Annual Audited Financial Statements For The Year Ended 30 June 2014

Directors’ Report 37

Auditor’s Declaration of Independence 45

Statement of Profit or Loss and Other Comprehensive Income 46

Statement of Financial position 47

Statement of Changes in Funds 48

Statement of Cash Flow 48

Notes to the Financial Statements 49

Director’s Declaration 65

Independent Auditor’s Report 66

36 ANNUAl AUDITED FINANCIAl STATEMENTS

The Directors of Homes North Community Housing Company Ltd (“The Company”) present this report for the year ended 30 June 2014.

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

• Mr Rex Gream

• Ms Mary Devine, Ms Josephine Heslin, Mr Ian Downs

• Ms Margaret Hansell, Mr Malcolm McGown

• Mr Johan Mouthaan (Appointed 19th May 2014)

The Directors have all been in office since the start of the financial year unless otherwise stated.

PRINCIPAl ACTIVITIESThe principal activity of the company during the financial year was to provide secure, appropriate and affordable rental housing, sensitively managed for people on low incomes who are otherwise disadvantaged in gaining access to or maintaining a tenancy, and are at risk of becoming homeless.

SHORT AND lONG TERM ObJECTIVES

The company’s short-term objectives are to:

• Focus on providing services to communities in the New England and North West of NSW

• Provide members of these communities who are limited in their capacity to access safe, appropriate and affordable accommodation with housing solutions

• Provide services to community members experiencing homelessness

• Provide quality housing that not only meets the requirements of the residential tenancies act and Housing NSW asset standards, but also meets the specific needs of our clients and communities

• Provide housing management services

The company’s long-term objectives are to:

• Maintain the value of the company’s properties and the properties managed on behalf of Housing NSW Land and Housing Corporation by undertaking a comprehensive planned maintenance program

• Remain financially sustainable

• Continually improve our service at all levels, including adapting and innovating in ways that ensure we achieve positive outcomes for the disadvantaged in our communities

• Develop strong partnerships with local agencies and service providers to strengthen and build on a client-centred and community-focused service delivery model

• Raise awareness of housing-related issues in the region

• Implement a life-cycle plan for the disposal and replacement of properties to ensure the portfolio value, and a high standard of housing provision, is maintained

• Continue to increase the supply of housing where rent is based on a community member’s financial capacity and not only on financial return

• Maintain a skilled board of directors the composition of which is commensurate with the requirements of the business and good governance

STRATEGIESThe company’s strategic plans outline how these stated objectives are to be met.

The company’s annual operational plan outlines specific objectives relating to these strategies.

In addition, the company’s Strategic Asset Management Plan ensures our housing portfolio aims to meet the specific needs within the region. The plan analyses the housing markets in New England and North West NSW and underpins decisions around acquisitions and disposals. It is also used to inform the 25 year planned maintenance schedule.

diReCtoRs’ RepoRt

37ANNUAl AUDITED FINANCIAl STATEMENTS

diReCtoRs’ RepoRt The current strategic plan for 2013-16 focuses on:

stRAtegy opeRAtionAl plAn 2013 -2014 meAsuRement

Develop and sustain a culture of operational excellence

Transition the operations of the organisation out of a period of rapid growth and consolidation to one of continual improvement

• Newpositioncreatedtotakeresponsibilityforover sighting continual improvement strategies

• Internalauditplandeveloped

• Improvedprocessesimplementedforannualclient and property file audits

• Achievedfull3yearaccreditation

Develop consistent service excellence

• Threestaffcompletedcertificate4SocialHousing

• Twostaffcommencedcertificate4SocialHousing

• FourstaffcommencedDiplomaSocialHousing

• Stafftrainingconductedonmanagingcomplaints

• Tenantsatisfactionsurveyreflectsimprovementsin service delivery. Satisfaction rating in 2013/14 was 93% (2012/13 was 83%).

Maintain a consistent performance culture across all sections and locations

• Newmanagersfortnightlyreportimplementedthat improves accountability. As a result arrears and vacancy times have improved

• Externalwhistle-blowerappointed

• Newpositionscreatedthatwillassistwithimproved performance monitoring

Continue to professionalise the service

• Standardssetandimplementedfor reception areas

• NewITsystemprocuredwhichwillfacilitate standardisation of processes and communications

• Variouspoliciesreviewedduringtheyear

Improved service integration between business units

• Assetstaffparticipatedinbudgetpreparationandreview of appropriation codes

• Asbestosregisterandasbestosmanagementplan completed

• Newstrategicassetmanagementplancompleted

Meet acquisition targets for 2014 • Targetof17propertiesmet

Partner with Housing Alliance members to procure new IT platform that supports the business and is cost effective

• Projectteamdevelopedandthoroughprocurement process undertaken

• ContractswithsuppliersignedDecember2013

• StagedimplementationcommencedJuly2014


The current strategic plan for 2013-16 focuses on:

diReCtoRs’ RepoRt


Provide leadership in our region on social and affordable housing issues

Host a regional housing forum

• InitialdiscussionsheldwithFamilyandCommunity services who are in support of the initiative

• Agreedthattheforumshouldbepostponed until after reforms in the homelessness sector are implemented

Raise the profile of the role and potential of community housing and Homes North in the region

• Mediaexposurewitharticlesinlocalpapersandseveral radio interviews

• Submissionstothreegovernmentinquiries

• CalledtopresentattheNSWinquiryintothesocial and affordable housing

Initiate projects that connect services to clients along the housing continuum

• NewpartnershipsdevelopedacrossNewEngland and North West NSW as part of the homelessness sector reforms

• Additionaltransitionalhousingpropertiesmanaged by Homes North

• HousingNSWpresentationtoallstaffatmeeting

Seek funding that supports specific housing needs within the region, including funding that “fills the gaps” and improves access to support in disadvantaged locations

Identify funding opportunities and submit applications

• Fundingapplicationsubmittedforatransitionto work programme in Gunnedah. Awaiting announcement of successful applications.

• Newpositioncreatedthatisresponsibleforfunding applications

Expand the level and type of services provided to better support access to and the sustainability of the social housing system in the region

Develop and commence “Community Housing for Aboriginal People” strategy

• HomesNorthstaffwereconsultedondevelopment of the strategy

• Initialworkcommencedonthedevelopmentofareconciliation plan

• Newpositioncreatedthatincludesresponsibilityfor implementation of the strategy


diReCtoRs’ RepoRt


Expand the level and type of services provided to better support access to and the sustainability of the social housing system in the region

Develop partnerships with homelessness sector

• Negotiatedtheprovisionofadditionalsupportservices for our tenants in Gunnedah. Under the project Homes North has provided funding for the supervision of volunteers who are assisting tenants in need

• NewpartnershipsenteredintoacrossNewEngland and North West NSW. Included are service level agreements with all refuge services in the region. These agreements are developing stronger links across the housing continuum for the benefit of services users

• Managementofadditionaltransitionalpropertiesacross the region

better integrate housing provision with positive life outcomes by providing integrated support packages and furthering our relationships with key partner agencies

Focus of 2014/15 operational plan

• Researchunderwaytoidentifyareasofneed and opportunities

• Studytourofinitiativesinpracticeplanned

• Newpositioncreatedwhichincludescapacitytoundertake research and planning for this strategy

Expand our framework for tenant participation to embed these activities into the operations of the service and transform tenant participation into a hallmark of the service

Develop and implement a revitalised tenant participation structure

• Twonewpart-timepositionscreatedspecificallyto focus on tenant relations

Ensure corporate governance activities are appropriate for the nature and size of the business as it grows and develops

Conduct board evaluation and skills audit. Review the performance of the audit and risk committee. Review the board’s charter

• Boardcharterreviewed

• Boardskillsauditcompleted

• Boardevaluationcommenced

• Reviewofauditandriskcommitteeundertaken

• SixdirectorsattendedtheBetterBoardsconference

• Riskmanagementcommitteeimplemented

The current strategic plan for 2013-16 focuses on:


Repairs and maintenance relates to urgent repairs and maintenance and tenant damage that has not been repaid. It also includes common area lawns and grounds maintenance.

Planned maintenance relates to replacement of items after fair wear and tear such as kitchens, bathrooms, stoves, hot water services etc. Cyclical maintenance includes regular items such as annual smoke alarm test, hot water thermostat testing and pest inspections.

OPERATING RESUlT AND REVIEw OF OPERATIONSThe total comprehensive income for the year was $17,348,167 (2013 deficit $4,434,558). The company is exempt from income tax. The operating result includes the remaining 128 Nation Building Economic Stimulus Properties (“NBESP”) properties which vested in Homes North from Housing NSW during the year with a valuation

of $15,515,949. The operating result for Homes North also includes a revaluation increment of $1,159,343.

This relates to 122 (NBESP) which previously vested in Homes North from Housing NSW ($756,093) and 15 freehold properties where title was held as at 30 June 2014 ($403,250).

SIGNIFICANT FACTORS AFFECTING PERFORMANCEDuring the financial year, the company entered into agreements to purchase 12 Homes North owned properties. As at 30 June 2014, eight of these properties had been settled. Of the remaining four, two settled in July and the remaining two will settle in September 2014. This will bring the total number of properties purchased to 19 under the leveraged asset agreement with Housing NSW to increase supply. These acquisitions were funded from a combination of accumulated cash equity reserves,

diReCtoRs’ RepoRt

2014 2013

tenAnCy mAnAgement ACtuAl benCHmARk ACtuAl benCHmARk

Rent arrears 3.9% 4.0% 4.9% 4.0%

Customer satisfaction rating (registrar min benchmark 75%)

93% 85% 83% 85%

Supported tenancies as a % of all tenancies 16% 18% 15% 18%

Complaints to be managed within reasonable timeframe (note: benchmark changed

from 28 working days to 28 days in 2014)

31 days 28 days 22 working days 28 working days

Vacant property turnaround 26 days 14 days

*Void properties 32 days 28 days

kEY PERFORMANCE INDICATORSThe company measures its performance through the use of quantitative and qualitative benchmarks. The benchmarks are used by the directors to assess the financial sustainability of the company and whether the company’s short and long term objectives are being achieved.

*Voids are properties that require significant capital upgrade works to be completed before they can be re-tenanted. Note: registrar minimum benchmark is 21 days for vacants and voids combined.

opeRAtionAl And finAnCiAl ($) ($) ($) ($)

Expenditure on repairs & maintenance does not exceed budget average per property

755 700 806 700

Planned and cyclical maintenance does not exceed budget average per property

1,509 1,500 1,114 1,300

% of capital properties at Housing NSw Asset Standards

98.5% 70%


and net income received from the 250 NBESP properties managed under the Housing NSW Vested Asset Title transfer program. The company has full entitlement to the rental income stream from these properties which will also resource the ongoing management and maintenance of the assets as well as contribute to leverage funding of future acquisitions. One third of the 250 NBESP vested properties were re-valued this financial year based on independent valuations and the increments applied across the rest of the portfolio in each location. The 128 properties which vested in Homes North during the year were valued at $15.5 million. The other 122 properties received in April 2011 were valued at $16.2 million. In addition Homes North owns 15 freehold properties valued at $4.5 million.

INFORMATION ON DIRECTORSThe names of each person who has been a director during the year and to the date of this report are:

Rex Gream Chairperson: Appointed 11 April 2008.

• Current position: Administrative Manager – Roberts & Morrow Financial Planning

• Experience: financial services; over 35 years in the banking and finance industry

• Special responsibilities: Member of the Audit and Risk Committee

Josephine Heslin Director: Appointed 15 February 2012.

• Current position: Manager & Coordinator, Aged & Disability Sector.

• Experience: previously Project Manager, Ageing & Disability Sector. Manager, Independent Living Retirement Village; Mortgage Advisor; and Business Owner

• Special Responsibilities: Employee Liaison Officer

Malcolm McGown Director: Appointed 24 November 2008.

• Experience: extensive small business experience

• Qualifications: Diploma in Agriculture (Hons), Real Estate Practice Certificate

• Special responsibilities: Company Secretary – appointed November 2009

Mary Devine Director: Appointed 18 September 2002.

• Current position: Regional Transport Coordinator, Transport NSW.

• Qualifications: Bachelor of Social Work, Associate Diploma Welfare Worker

Margaret Hansell Director: Appointed 10 October 2011.

• Current position: Consultant, Insurance and Risk Management

• Partner Bindawalla B&B: Bindawalla Beef Production

• Qualifications: Graduate Certificate of Management (University of New England); Bachelor of Commerce (University of New England)

• Fellow, Australian & New Zealand Institute of Insurance and Finance (ANZIIF)

• Certificate IV Workplace Assessment and Training

• Experience: various roles with Allianz, GIO and Marsh Insurance and Risk Management

• Special responsibilities: Chair of the Audit and Risk Committee

Ian Downs Director: Appointed 1 February 2010.

• Current position: Education Consultant

• Director New England Girls School Armidale

• Director of NSW Federation of Housing Alliance

• Secretary, Tillgerry Lions Club

• Qualifications: Bachelor of Arts - Sydney University; Diploma of Education - Sydney University; M.Ed. (Hons) University of New England

• Experience: Principal Farrer Memorial Agricultural High School Tamworth, and New England Girls School, Armidale

• Director of Boarding - The King’s School Parramatta; Chairman of Glen Innes Hospital Board

• Special responsibilities: Member of the Audit and Risk Committee

Johan(Hans) Mouthaan Director: Appointed 19 May 2014.

• Current position: Retired

• Qualifications: Trade and Building Certificate

• Experience: extensive project home management

diReCtoRs’ RepoRt


MEETINGS OF DIRECTORSDuring the financial year, 11 meetings of directors were held and five Audit and Risk Board Sub-committee meetings were held. Attendances by each director during the year were as follows:

diReCtoRs’ RepoRt

diReCtoRs’ meetings Audit And Risk boARd sub-Committee

Number Attended Eligible to Attend Number Attended Eligible to Attend

Rex Gream 11 11 5 5

Mary Devine 10 11 N/A N/A

Josephine Heslin 9 11 N/A N/A

Ian Downs 10 11 3 5

Margaret Hansell 11 11 5 5

Malcolm McGown 9 11 N/A N/A

Johan Mouthaan 3 3 1* 1*

CORPORATE INFORMATION & MEMbERS’ GUARANTEEThe company is a ‘not for profit’ entity, registered as a company limited by guarantee under the Australian Charities and Not for Profit Commission (“ACNC”) and Australian Securities and Investment Commission (“ASIC”). It does not issue shares to its members. Under its constitution the company does not have the capacity to issue dividends to its members. Any surplus on winding up is to be distributed to an organisation with similar objects as dictated by the Constitution. If the company is wound up, the Constitution states that each member is required to contribute a maximum of $1 each towards any outstanding obligations of the company. At 30 June 2014 the number of members was 11 (2013—10 members).

CORPORATE GOVERNANCEThe company, although it has no legal obligation to do so, endorses the corporate governance principles and recommendations published by the Australian Stock Exchange Corporate Governance Council.

The Audit and Risk Board Sub-committee is responsible for assisting the board of directors in fulfilling its oversight responsibilities in relation to the financial reporting process, the system of internal control, risk management, the internal audit processes, the external audit processes, remuneration including establishment of Chief Executive

Officer Key Performance Indicators, and the company’s process for monitoring compliance with laws and regulations and the code of conduct.

IN THE NExT FINANCIAl YEAR THE COMPANY INTENDS TO CONTINUE wITH THE FOllOwING PROJECTS OR TENDERS:The purchasing of an additional six to eight Freehold properties under the Housing NSW vested asset agreement which will require the company to undertake borrowings. Consequently in future years the company will adopt a financial risk management approach in managing both its property acquisitions and borrowings.

Over the next 10 years it is anticipated that the company will continue to contribute to increasing the supply of affordable housing. Under the title transfer programme and the Community Housing Assistance Agreement – Capital Properties – Vested, the company has committed to purchase and/or develop additional housing stock (minimum 30 properties) for use as affordable and social housing. This will be funded by a combination of retained earnings and leveraging.

The principle activity of the company will remain that of a community housing provider.

**Attended as an observer


diReCtoRs’ RepoRt AUDITOR’S INDEPENDENCEThe auditor’s declaration of independence appears on page 12 and forms part of the directors’ report for the year ended 30 June 2014.

Rex Gream (Chair)

Dated this 21st day of October 2014

SIGNED IN ACCORDANCE wITH THE RESOlUTION OF DIRECTORS.



NOTESa) All properties where title was transferred under the vested asset National Building Economic Stimulus program were independently re-valued in June 2013. One third of these properties in each location were then independently valued again in June 2014. This revaluation was then applied to the remainder of the portfolio by directors valuation. This revaluation represents the difference between the independent valuation in June 2013 and the rolling revaluation in June 2014. This revaluation has been booked through profit and loss in compliance with accepted accounting standards.

b) Title for the remaining 128 properties to be transferred under the vested asset agreement were received in January 2014 and brought to account at fair value using the valuation process described in a) above.

The statement of profit and loss and other comprehensive income is to be read in conjunction with the attached notes

note 2014 ($) 2013 ($)

Revenue 3 7,718,703 7,228,878

Fair value gains/(losses) on revaluation of land and buildings

a) Refer note below

1,159,343 (5,111,000)

Tenancy and property management expenses (4,462,174) (4,274,858)

Employee benefits expense (1,965,592) (1,637,623)

Depreciation and amortisation (62,991) (66,706)

Doubtful debts movement in provision 13,093 (51,588)

Vehicle running expense (38,295) (18,223)

Fuel, light, and power expense (23,983) (26,322)

Rental expense on operating lease (121,976) (106,656)

Training expense (83,841) (118,038)

Audit, legal and consultancy expense (85,614) (48,899)

Administration expense (198,373) (117,377)

Interest expense (4,828) Nil

Other expense (11,253) (86,147)

Profit for the year 1,832,218 (4,434,558)

Other comprehensive income

Fair value of properties (NbESP) vested under leveraged asset agreement

b) Refer note below

15,515,949 Nil

Total comprehensive income for the year 17,348,167 (4,434,558)

stAtement of pRofit oR loss And otHeR CompReHensiVe inCome foR tHe yeAR ended 30 june 2014


note 2014 ($) 2013 ($)

CURRENT ASSETS

Cash and cash equivalents 4 1,223,870 2,471,837

Trade and other receivables 5 187,273 211,284

Total current assets 1,411,143 2,683,121

NON-CURRENT ASSETS

Property, plant and equipment 6 397,102 282,246

Investment property 7 4,550,353 1,845,532

Investment property—restricted 7 31,721,043 15,449,000

Total non-current assets 36,668,498 17,576,778

Total assets 38,079,641 20,259,899

CURRENT lIAbIlITIES

Trade and other payables 8 656,279 453,825

borrowings 9 4,431 1,400

Provision - employee benefits 10 254,119 166,534

Monies held in trust 11 152,334 17,587

Unearned income 68,760 69,442

Total current liabilities 1,135,923 708,788

NON-CURRENT lIAbIlITIES

Provision - employee 10 90,607 36,347

Total non-current liabilities 90,607 36,347

Total liabilities 1,226,530 745,135

Net assets 36,853,111 19,514,764

FUNDS

Retained earnings 35,819,634 18,471,467

Reserves 12 1,033,477 1,043,297

Total funds 36,853,111 19,514,764

The statement of financial position is to be read in conjunction with the attached notes

stAtement of finAnCiAl position As At 30 june 2014


RetAined eARnings ($)

plAnned mAintenAnCe

ReseRVe ($)totAl ($)

bAlANCE AT 30 JUNE 2012 22,906,025 929,929 23,835,954

Transfers (3,606,133) (715,057) (4,321,190)

Surplus/(deficit) (828,425) 828,425 (4,321,190)

bAlANCE AT 30 JUNE 2013 18,471,467 1,411,143 1,043,297

Transfers 18,317,918 (979,571) 17,338,347

Surplus/(deficit) (969,751) 969,751 Nil

bAlANCE AT 30 JUNE 2014 35,819,634 1,033,477 36,853,111

The statement of changes in funds is to be read in conjunction with the attached notes

stAtement of CAsH flows foR tHe yeAR ended 30 june 2014

note 2014 ($) 2013 ($)

CASH FlOwS FROM OPERATING ACTIVITIES

Cash receipts from rental income 6,582,019 6,206,810

Cash receipts from grants and other income 1,092,102 953,933

Interest received 33,594 95,296

Cash paid to suppliers and employees (6,478,412) (6,309,191)

Net cash generated from/(used in) operating activities 14 1,229,303 946,848

CASH FlOwS FROM INVESTING ACTIVITIES

Proceeds from sale of property, plant and equipment 12,272 Nil

Purchase of property, plant and equipment (187,977) (61,328)

Purchase of investment property (2,301,571) (1,320,077)

Net cash generated from/(used in) investing activities (2,477,276) (1,381,405)

Cash flows from financing activities 300,000 Nil

Repayment of borrowings (300,000) Nil

Net cash generated from/(used in) financing activities

Nil Nil

Net increase/(decrease) in cash held (1,247,967) (434,557)

Cash and cash equivalents at beginning of financial year

2,471,837 2,906,394

Cash and cash equivalents at end of financial year 4 1,223,870 2,471,837

stAtement of CHAnges in funds foR tHe yeAR ended 30 june 2014


notes to tHe finAnCiAl stAtements foR tHe yeAR ended 30 june 2014

1. CoRpoRAte infoRmAtionThe Financial Statements of Homes North Community Housing Company Ltd (“the Company”) for the year ended 30 June 2014 were authorised for issue in accordance with a resolution of the Directors on 21st October 2014.

The financial statements cover the Company as an individual entity, incorporated and domiciled in Australia. The Company is a company limited by guarantee.

2. summARy of ACCounting poliCies(A) bASIS OF PREPARATIONHomes North Community Housing Company Limited applies Australian Accounting Standards – Reduced Disclosure Requirements as set out in AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010–2: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements.

The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements of the Australian Accounting Standards Board (AASB), the Corporations Act 2001, and Australian Charities and Not for Profit Commission (“ACNC”). The Company is a not-for-profit entity for financial reporting purposes under Australian Accounting Standards.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise.

The financial statements, except for the cash flow information, 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. The amounts presented in the financial statements have been rounded to the nearest dollar.

Historical cost convention

The financial statements have been prepared on the basis of historical cost except where stated otherwise.

Currency

The financial statements are presented in Australian dollars.

(b) SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONSThe preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other various factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Impairment of assets

The Company assesses the impairment at each reporting date by evaluating conditions specific to the Company that may lead to impairment of assets. Where an impairment trigger exits, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. In assessing recoverable amount the directors have applied the specific sections of the standards applicable to not-for-profit entities in Australia.

(C) REVENUE RECOGNITIONRevenue is recognised when the Company is legally entitled to the income and the amount can be quantified with reasonable accuracy. Revenues are recognised net of the amounts of goods and services tax (GST) payable to the Australian Taxation Office.


Rental income

Rental income is recognised on an accruals basis as rent falls due.

Tenancy management services (fee for service income)

Tenancy management services revenue is recognised on an accruals basis in line with service provision. The fee for service income received is the only revenue recognised. At balance date, any other monies on hand in relation to a specific fee for service provision are held in trust and classified as a liability.

Government grant funding (includes both ongoing grants and one-off capital grants)

Unconditional government grants are recognised in the profit or loss as other income when the grant becomes receivable.

Other grants received are initially recognised as a deferred income at fair value when there is reasonable assurance that they will be received and that the Company will comply with the conditions associated with the grant. Revenue is then recognised in the profit and loss on a systematic basis as services are performed and expenses are incurred or conditions are fulfilled.

Interest income

Investment income comprises interest. Interest income is recognised as it accrues.

Other income

Non-operating, other income is recognised as revenue when received.

(D) ExPENDITUREAll expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Where costs cannot be directly attributed to a particular category they have been allocated to activities on a basis consistent with use of the resources.

(E) CASH AND CASH EQUIVAlENTSCash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of six months or less. Short-term deposits are accessible at call (the only

penalty being a reduction in interest rates corresponding with the reduced term.) For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of any outstanding bank overdrafts.

(F) MONIES HElD IN TRUSTThe Company provides other corporations with a fee for service property and tenancy management service for which a tenancy management service fee is charged. To the extent that rent is held over at balance date it is recorded in the monies held in trust—liability account on the statement of financial position.

(G) TRADE AND OTHER RECEIVAblESTrade receivables, which comprise amounts due from the provision of services provided to tenants, are recognised and carried at original invoice amount less any allowance for uncollectable amounts.

An allowance for doubtful debts is made when there is objective evidence that the Company will not be able to collect the debts. Bad debts are written off when identified.

(H) PROPERTY, PlANT AND EQUIPMENTEach class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Depreciation

Items of property, plant and equipment and buildings are depreciated over their useful lives to the Company commencing from the time the asset is held ready for use. Depreciation is calculated on a straight-line basis over the expected useful economic lives of the assets as follows:

Asset ClAss depReCiAtion RAte

Leasehold improvements Six to forty years

Furniture, fittings and office equipment

Three to five years

Motor vehicles Five years




Plant and equipment

The carrying values of plant and equipment are reviewed for impairment at each reporting date, with the recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired. The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. Depreciated replacement cost is used to determine value in use. Depreciated replacement cost is the current replacement cost of an item of plant and equipment less, where applicable, accumulated depreciation to date, calculated on the basis of such cost.

(I) INVESTMENT PROPERTYInvestment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods and services or for administrative purposes. Investment property is measured at cost on initial recognition and subsequently at fair value with any change recognised through the profit and loss.

Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for its intended use, and capitalised borrowing costs.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit and loss. When an investment property that was previously classified as property, plant and equipment is sold, any related amount included in the revaluation reserve is transferred to retained earnings.

All properties were reclassified as investment property effective 1 July 2012 as it was determined that the use of the properties had changed. Should the use of a property change again such that it is reclassified as property, plant and equipment its fair value at the date of reclassification becomes its cost for subsequent accounting.

The rationale for reclassification of property, initially recognised as Property Plant and Equipment (“PP&E”) AASB 116, as investment property under the investment property standard AASB 140 follows.

The term investment property is an accounting term and is not to be interpreted as a literal true investment.

One of the key goals of the vesting agreement with Housing NSW is to build a portfolio of assets to leverage additional finance for further investment in social and affordable housing. It was determined that this key goal changed the overall underlying use of the housing properties.

The initial use of the properties was:

“to provide affordable, secure and appropriate housing across the country to individuals and families on low to moderate incomes and to those people who face difficulty in securing affordable accommodation through the private rental market.”

Under this use the properties were property recorded as PP&E under AASB 116.6 and AASB 140 Aus 9.1.

The change in use occurred upon enactment of the Housing NSW Vested Assets Agreement which extended the primary use of the property portfolio to:

• Increase the supply of affordable and social housing

• Allow strategic management of assets to better meet the future housing demand

• To provide a secure asset base to leverage additional finance for investment in social and affordable housing

The extension of the primary use of the property portfolio shows that the objective of ownership is for capital appreciation and future investment in community housing property. The rental of those properties to low income earners furthers this objective and is not only for the purpose of providing a social service but to increase the supply through further investment. Therefore it is considered that AASB 140 AUS 9.1 does not apply to Homes North for the purpose of these transactions and that there was a change in use of the property portfolio at that time.

Further detailed disclosures regarding the application of this policy are contained in the notes to the financial statements.


Fair value

Freehold land and buildings are shown at their fair value based on periodic, but at least triennial valuation by external independent valuers.

In periods when the freehold land and buildings are not subject to an independent valuation the directors conduct directors’ valuations to ensure the carrying amount of the land and buildings is not materially different to fair value.

Fair values are based on the market values. Market value is defined as being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after property marketing wherein the parties had each acted knowledgeably and willingly.

(J) lEASESFinance leases, which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at inception of the lease at fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in the statement of comprehensive income. The fair value of the leases is estimated as the present value of future cash flows, discounted at market interest rates. The carrying value of the leases is considered a reasonable reflection of fair value.

Capitalised leased assets are depreciated over the useful life of the asset.

(k) TRADE CREDITORS AND OTHER PAYAblESTrade payables and other payables represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid. These amounts are usually settled in 30 days. The notional amount of the creditors and payables is deemed to reflect fair value.

(l) UNSPENT PROJECT FUNDSThe liability for unspent government grants is the unutilised amounts of funding received on the condition that specific conditions are fulfilled. It is anticipated that the conditions will be fulfilled within twelve months of balance date. Accordingly the amounts have not been discounted.

(M) INCOME RECEIVED IN ADVANCEThe liability for income received in advance consists of tied project funding received in the current or previous financial year relating to services to be provided in a future financial year.

(N) EMPlOYEE bENEFITS

Short-term employee benefits

Provision is made for the company’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled.

The company’s obligations for short-term employee benefits such as wages, salaries and personal leave are recognised as a part of current trade and other payables in the statement of financial position.

Other long-term employee benefits

The Company classifies employees’ long service leave and annual leave entitlements as other long-term employee benefits as they are not expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service. Provision is made for the Company’s obligation for other long-term employee benefits, which are measured at the present value of the expected future payments to be made to employees. Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures, and are discounted at rates determined by reference to market yields at the end of the reporting period on government bonds that have maturity dates that approximate the terms of the obligations. Upon the re-measurement of obligations for other long-term employee



benefits, the net change in the obligation is recognised in profit or loss classified under employee benefits expense.

The Company’s obligations for long-term employee entitlements are presented as non-current liabilities in its statement of financial position, except where the Company does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as current liabilities.

Retirement benefit obligations Defined contribution superannuation entitlements

All employees of the Company receive defined contribution superannuation entitlements, for which the Company pays the fixed superannuation guarantee contribution (currently 9.25% of the employee’s average ordinary salary) to the employee’s superannuation fund of choice. All contributions in respect of employees’ defined contribution entitlements are recognised as an expense when they become payable. The Company’s obligation with respect to employees’ defined contribution entitlements is limited to its obligation for any unpaid superannuation guarantee contributions at the end of the reporting period. All obligations for unpaid superannuation guarantee contributions are measured at the (undiscounted) amounts expected to be paid when the obligation is settled and are presented as current liabilities in the Company’s statement of financial position.

(O) INCOME TAxThe Company has been classified as a Public Benevolent Institution for the purposes of Australian taxation legislation and is therefore exempt from income tax, and holds deductible gift recipient status. This exemption has been confirmed by the Australian Taxation Office.

(P) GOODS AND SERVICES TAx (GST)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 which case it is recognised as part of the cost of acquisition of an asset or as part of an item of expense.

Receivables and payables are recognised inclusive of GST. The net amount of GST recoverable from or payable to the Australian Taxation Office is included as part of receivables or payables. Cash flows are included in the statement of cash flows on a gross basis.

The GST component of cash flows arising from investing and financing activities which is recoverable from or payable to the Australian Taxation Office is classified as operating cash flows.

(Q) COMPARATIVE FIGURESWhen required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(R) CRITICAl ACCOUNTING ESTIMATES AND JUDGMENTSThe directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company.

key estimates Valuation of freehold land and buildings

The freehold land and buildings were independently valued at 30 June 2014 by Sharrock Enterprises Pty Ltd (Tamworth) and MVS National Valuations and Property Consulting (Armidale). The valuations were based on the fair value less cost to sell. The critical assumptions adopted in determining the valuations included the location of the land and buildings, the current strong demand for land and buildings in the area and recent sales data for similar properties. The valuation resulted in a revaluation increment of $1,159,344 being recognised in the profit and loss for the year ended 30 June 2014.

At 30 June 2014, the directors performed a directors’ valuation on the freehold land and buildings that were not independently valued. The directors have reviewed the key assumptions adopted by the valuers in 2014 and believe that changes in each location can be extrapolated over the remaining portfolio in that area. On this basis the directors believe the carrying amount of the land and buildings correctly reflects the fair value less costs to sell at 30 June 2014.



key judgments Employee benefits

For the purpose of measurement, AASB 119: Employee Benefits (September 2011) defines obligations for short-term employee benefits as obligations expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related services. As the Company expects that most employees will not use all of their annual leave entitlements in the same year in which they are earned or during the 12 month period that follows (despite an informal company policy that requires annual leave to be used within 18 months), the directors believe that obligations for annual leave entitlements satisfy the definition of other long-term employee benefits and, therefore, are required to be measured at the present value of the expected future payments to be made to employees.

(S) NEw AND AMENDED ACCOUNTING POlICIES

Employee benefits

During the year, the Company adopted AASB 119: Employee Benefits (September 2011) and the relevant consequential amendments arising from the related Amending Standards, which are mandatorily applicable from 1 January 2013. (As a result, the Company early adopted AASB 2011-11: Amendments to AASB 119 (September 2011) arising from Reduced Disclosure Requirements because the company’s financial statements are prepared under Australian Accounting Standards – Reduced Disclosure Requirements).

The Company has applied AASB 119 (September 2011) with retrospective effect. Among other things, the main changes introduced by AASB 119 (September 2011) relate to defined benefit plans and termination benefits, which have no impact on the Company’s financial statements as the Company has no defined benefit obligations or termination benefits at present. Additionally, AASB 119 (September 2011) has introduced revised definitions for “short-term employee benefits” and “other long-term employee benefits”. These revisions cause a change in accounting policy for the annual leave provision amounts recognised in the financial statements as explained below.

Provision for employee benefits: annual leave

For the purpose of measurement, AASB 119 (September 2011) defines obligations for short-term employee benefits as obligations expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related services. Previously, annual leave satisfied the definition of short-term employee benefits and therefore the leave liability was measured on an undiscounted basis at the amounts expected to be paid when the liability was settled. However, under AASB 119 (September 2011), as the company expects that most employees will not use all of their annual leave entitlements in the same year in which they are earned or during the 12 month period that follows, obligations for annual leave entitlements now meet the definition of other long-term employee benefits and, therefore, are required to be measured at the present value of the expected future payments to be made to employees. The effects of the adjustments required for each period presented are set out in the table below. Note, however, that these changes do not impact the classification of leave entitlements between current and non-current liabilities in the statement of financial position.

Fair value measurement

The company has applied AASB 13: Fair Value Measurement and the relevant consequential amendments arising from the related Amending Standards prospectively from its mandatory application date of 1 January 2013 and in accordance with the transitional requirements in AASB 13. (As a result, the Company early adopted AASB 2012-1: Amendments to Australian Accounting Standards – Fair Value Measurement – Reduced Disclosure Requirements because the Company’s financial statements are prepared under Australian Accounting Standards – Reduced Disclosure Requirements).

No material adjustments to the carrying amounts of any of the Company’s assets or liabilities were required as a consequence of applying AASB 13. Nevertheless, AASB 13 requires some additional disclosures regarding assets and liabilities that are measured at fair value in the Company’s financial statements. These enhanced disclosures are provided in Note 20.




ReVenue fRom RentAl inCome 2014 ($) 2013 ($)

leasehold - rent 1,085,771 1,051,247

NbESP Property Transfer program - rent 1,934,130 1,818,807

Owned - Homes North Owned Housing - rent 152,273 82,461

Crisis accommodation - rent 68,197 115,174

Housing NSw Affordable Housing - rent 228,162 258,894

Capital properties - rent 3,108,144 2,853,065

Other rental income 14,360 55,103

ToTal RenTal income 6,591,037 6,234,751

Government funding 768,172 659,007

Tenancy management - fee for service 220,132 56,420

Capital grants - stock transfers and upgrade programs 683 56,841

Interest income 38,408 95,305

Other revenue 100,272 126,554

ToTal Revenue 7,718,703 7,228,878

3. ReVenue And otHeR inCome

4. CAsH And CAsH equiVAlentsReVenue fRom RentAl inCome 2014 ($) 2013 ($)

Tamworth account 1,408 1,418

Glen Innes account 655 360

Armidale account - cheque Nil 6,796

Gunnedah account 209 1,518

Cash management accounts 1,068,214 972,272

Monies held in trust (refer note 10) 152,334 17,587

Term deposits Nil 1,470,937

Petty cash and floats 1,050 950

ToTal 1,223,870 2,471,837

(a) All accounts carry normal terms and conditions and are reviewed by the directors on a regular basis to maximise income from interest.


5. tRAde And otHeR ReCeiVAbles

6. pRopeRty, plAnt And equipment

2014 ($) 2013 ($)

Rental and trade debtors 391,657 369,016

Unaccounted cash receipts (130) (730)

Prepayments 1,396 22,463

Security deposits 10,334 8,494

GST receivable 29,793 70,911

less: provision for impairment (245,777) (258,869)

ToTal 187,273 211,284

No specific collection issues have been identified. The movement in the provision for impairment is summarised as follows:

ReConCiliAtion of pRoVisions foR impAiRment 2014 ($) 2013 ($)

Provision for impairment as at 1 July 258,869 207,282

• Charge for the year (10,376) 59,955

• Less amounts written off (23,468) (8,368)

Provision for impairment as at 30 June 245,777 258,869

2014 ($) 2013 ($)

leasehold improvements - at cost 223,184 189,713

less: accumulated depreciation(33,462) (24,917)

189,722 164,796

Motor vehicles - at cost 139,798 128,599

less: accumulated depreciation(78,767) (77,054)

61,031 51,545

Office equipment - at cost 270,380 221,545

less: accumulated depreciation

(124,031) (155,639)

146,349 65,906

397,102 282,247

(a) Movements in carrying amounts for each class of property, plant and equipment between the beginning and end of the current financial year.



ASSET REVAlUATIONS

The Company obtains independent valuations of its investment property portfolio on an triennial basis and at the end of each reporting period the financial statements reflect the most up to date valuation. The best evidence of fair value is considered to be the current price in an active market for similar assets. The following information is used where necessary: current prices in an active market for different types of properties or similar properties in a less active market.

The fair value of investment properties is determined by independent qualified valuers on a triennial basis who have experience in the location of the property. On an annual basis the directors review the valuation reports and extrapolate these valuations across the remaining portfolio taking into account fluctuations influenced by location.

As at 30 June 2014 the valuation of the investment property portfolio was performed by Sharrock Enterprises Pty Ltd (Tamworth) and MVS National Valuations and Property Consulting (Armidale). The directors then performed a directors’ valuation on the remaining two thirds of NBESP restricted land and buildings. The directors have reviewed the key assumptions adopted by the valuers in 2014 and believe that the average increment in each location can be applied across the remaining portfolio. This valuation process resulted in a revaluation increment of $1,159,344 being recognised in the revaluation surplus for the year ended 30 June 2014.

Refer to note 20 for detailed disclosures regarding the fair value measurement of the company’s land and buildings.

PROPERTIES RECEIVED UNDER NATION bUIlDING ECONOMIC STIMUlUS PlANHomes North became entitled to received 250 dwellings after a successful tender application under Stage 2 of the NSW Nation Building Economic Stimulus Plan “NBESP”. The title to 122 of these units (first instalment) vested to Homes North in April 2011. The second instalment, 128 units vested to Homes North in January 2014. The first instalment of these properties were initially classified as Property Plant and Equipment. In July 2013 the board decided to reclassify these properties under the AASB 140 Investment Property Accounting Standard. This reclassification aligned the use of the portfolio of all existing properties to the Company’s long term strategy. Properties vested under the NBESP agreement are determined to be restricted investment properties as Homes North are required to:

• Deliver property and management services to clients eligible or public housing, including people with high-level housing needs; and

• Allocate the accommodation to particular client groups in accordance with specified target quotas; and

• Use the properties to leverage financial resources in partnership with private sector institutions; and

• Use those resources to create additional affordable housing targeted towards low to moderate income households experiencing housing stress

7. inVestment pRopeRty

H n owned pRopeRties ($)

ReCeiVed undeR nbesp

- RestRiCted ($)totAl ($)

balance at 1 July 2013 1,845,532 15,449,000 17,294,532

Purchased 2,301,571 Nil 2,301,571

Received as Grants Nil 15,515,949 15,515,949

Change in Fair Value – based on June 14 Independent Valuation

403,250 756,094 1,159,344

Balance at 30 June 2014 4,550,353 31,721,043 36,271,396



RECOGNITION IN STATEMENT OF FINANCIAl POSITIONHomes North has recognised the properties received under the NBESP grant as investment properties in its statement of financial position. In line with the Company’s strategic purposes these properties will be used for earning rental income and for capital appreciation purposes. This will maximise the company’s ability to reinvest future economic benefits flowing from these properties back into social and affordable housing. The agreement requires that these properties be used to leverage financial resources in partnership with private sector institutions to support future growth of the social housing sector.

RESTRICTION ON ASSETSAll properties received under the NBESP are classified as restricted assets because they must only be used for social housing purposes (per the tender guidelines of NBESP which governs the use of these properties by

social housing providers). Any proceeds from sale of these properties must be re-invested back into properties and used for social housing purposes. To ensure this intention is honoured there is a caveat on each of the titles stating that permission from Housing NSW must be obtained before the sale can take place.

REPAIRS AND MAINTENANCE OblIGATIONS – IMPAIRMENTHomes North is required to set aside sufficient resources to meet scheduled repairs and maintenance obligations. Accordingly, $1,500 (2013 $1,300) per property is set aside each year and charged to the statement of financial performance. The balance is carried forward as a restricted planned maintenance provision and actual planned maintenance repairs are charged to the provision. This ensures that Homes North has capacity to meet the cost of significant capital upgrades and maintenance when required, and maintains buildings at or above the required asset standard.

8. tRAde And otHeR pAyAblesCuRRent 2014 ($) 2013 ($)

Trade creditors 235,150 243,137

Accrued expenses 230,977 35,025

bonds held for tenants 4,392 4,017

Provision for unclaimed monies 2,542 2,542

Tenant rent in advance 183,218 169,104

Total 656,279 453,825

CuRRent 2014 ($) 2013 ($)

Credit Card Facility 4,431 1,400

‘Trade creditors’ includes a credit card facility with a limit of $25,000 (with unused facility of $20,569) at 30 June 2014. In addition the Company has a $1 million loan facility. This facility has an initial limit of $1 million with in principle

approval to increase this limit to $2 million. The loan facility is secured by a general fixed and floating charge over the company’s assets and first mortgages over Homes North owned properties.



PROVISION EMPlOYEE bENEFITSProvision for employee benefits represents amounts accrued for annual leave and long service leave.

The current portion for this provision includes the total amount accrued for annual leave entitlements and the amounts accrued for long service leave entitlements that have vested due to employees having completed the required period of service. Based on past experience, the Company does not expect the full amount of annual leave or long service leave balances classified as current liabilities to be settled within the next 12 months. However, these amounts must be classified as current liabilities since the company does not have an unconditional right to defer the settlement of these amounts in the event employees wish to use their leave entitlement.

The non-current portion for this provision includes amounts accrued for long service leave entitlements that have not yet vested in relation to those employees who have not yet completed the required period of service.

In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based upon historical data. The measurement and recognition criteria for employee benefits are discussed in note 1(n).

11. monies Held in tRust – tenAnCy mAnAgement seRViCes

2014 ($) 2013 ($)

Monies held in trust 152,334 17,587

12. totAl fundsDetails of the movement in each reserve and fund are provided in the Statement of Changes in funds.

GENERAl FUNDThe general reserve represents the funds of the Company that are not designed for particular purposes.

PlANNED MAINTENANCE RESERVE$1,033,477 has been set aside in a planned maintenance reserve fund to meet the commitments of the Company’s asset maintenance plan. The Company must meet the planned maintenance obligations of 649 (2013, 642) capital properties.

13. membeRs’ guARAnteeThe Company is limited by guarantee. In the event of the Company being wound up, the constitution requires members to make a maximum contribution of $1 each towards meeting any outstanding obligations of the Company. At 30 June 2014 the number of members was 11 (2013 was 10 members).

10. employee benefits—pRoVisions2014 ($) 2013 ($)

(a) Current employee benefits - annual leave 254,119 166,534

(b) Non current employee benefits - long service leave 90,607 36,347

ToTal 344,726 202,881

AnAlysis of pRoVisions 2014 ($) 2013 ($)

Opening balance at 1 July 202,881 172,436

Additional provisions raised during the year 232,171 154,287

Amounts used (90,326) (123,842)

Balance as at 30 June 344,726 202,881



The property lease commitments are non-cancellable operating leases on four offices contracted for but not capitalised in the financial statements, with increases in rent either in line with the Consumer Price Index

or 4%, whichever is greater. The lease commitments on five photocopiers are non-cancellable operating leases contracted for but not capitalised in the financial statements, with fixed monthly repayments over four years.

2014 ($) 2013 ($)

Result after income tax 17,348,166 (4,434,558)

non cash flows

Depreciation 62,993 66,706

Increase/(decrease) in provision for planned maintenance over actual

(9,820) 113,368

Profit/loss on sale of fixed assets (2,150) Nil

Revaluation of properties (1,159,343) 5,111,000

NbESP properties recognised on transfer of title (15,515,949) Nil

Provision for doubtful debts (13,093) 51,588

changes in asseTs and liaBiliTies

Increase/(decrease) in provisions 141,845 30,445

Increase/(decrease) in monies held in trust 134,747 (352)

Increase/(decrease) in trade and other payables 245,920 (18,510)

(Increase)/decrease in trade and other receivables (4,013) 27,161

ToTal 1,229,303 946,848

14. CAsH flow infoRmAtionReconciliation of net surplus for the year to net cash flows from operations:


CuRRent 2014 ($) 2013 ($)

Payable—minimum lease payments 152,334 17,939

Not later than 12 months 80,813 112,601

later than 12 month but not later than five years 181,221 201,275

later than five years Nil Nil

ToTal 262,034 313,876

15. CApitAl And leAsing CommitmentsNon-cancellable operating leases contracted for but not recognised in the financial statements


16. Contingent liAbilities And CApitAl CommitmentsA) CONTINGENT lIAbIlITIESAs at 30 June 2014 work orders estimated at $60,000 have been issued to contractors for work to be completed after 30 June 2014.

In addition the Company entered into a merger agreement with Inverell Community Housing on the 1 July 2014 – refer to note 17 below for further details. It has been estimated that the cost of bringing capital properties transferred up to the required Housing NSW asset standard will be approximately $500,000. This potential liability is partially offset by the transfer of $250,000 set aside in a term deposit by Inverell Community Housing for this purpose. To the best of the directors’ knowledge and belief there are no further significant contingent liabilities at balance date in relation to Inverell Community Housing.

b) CAPITAl COMMITMENTSThe Company has committed to purchase and/or develop a minimum of 30 properties under an agreement with Housing NSW as part of the title transfer program over the next 10 years. During the financial year, the Company entered into contractual agreements to purchase eight Homes North owned properties. As at 30 June 2014, four of these properties were settled. Two settled in July 2014 and it is anticipated that the remaining two will settle in September 2014 (balance on settlement—$600,000) which will be funded from borrowings (refer financial risk management note 19 for further details.)

During the next financial year the Company plans to purchase an additional six to eight properties under the vested asset agreement bringing the total properties purchased to 25-27. These additional purchases will be funded from a mixture of retained earnings and borrowings.

17. eVents AfteR tHe RepoRting peRiodOther than the following, the directors are not aware of any significant events since the end of the reporting period.

On 1 July 2014 the Homes North entered into a legally binding merger agreement with Inverell Community Tenancy Scheme Inc. trading as Inverell Community Housing (“ICH”). Under this agreement ICH agreed to transfer the business of ICH including all of the assets and liabilities of the Incorporated Association to Homes North. The financial effect of this merger has not been brought to account in the financial statements at 30 June 2014, and will be reflected in next year’s financial statements. As at 30 June 2014 the directors do not consider that Homes North had control of ICH because:

• ICH was being managed on a fee for service basis and Homes North therefore did not legally have the power to govern the financial and operating policies of the entity

• Homes North did not have the power to appoint or remove the majority of the members of the governing body/management committee

• Control of ICH remained with that governing body

• Homes North did not have the power to vote at meetings of the governing body

18. key mAnAgement peRsonnel CompensAtionAny persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity is considered key management personnel. The totals of remuneration paid to key management personnel (KMP) of the company during the year are as follows:

2014 ($) 2013 ($)

key management personnel compensation

488,276 445,469



19. RelAted pARties And RelAted pARty tRAnsACtions(A) DIRECTORSNo payments were made to a related party

(b) TRANSACTIONS wITH DIRECTOR-RElATED ENTITIESNo director of the Company has, since the end of the previous financial year, received or become entitled to receive a benefit by reason of a contract made by the Company or a related entity with the director or with a firm which the member is a director, or with an entity in which the Director has a substantial financial interest. There are no amounts payable to or receivable from directors or director-related entities at reporting date.

20. finAnCiAl Risk mAnAgementThe Company’s financial instruments consist mainly of deposits with banks, short term investments and term deposits, accounts receivable and payable. Homes North has a $1 million loan finance facility secured by: a general fixed and floating charge; and mortgages over Homes North owned land and buildings purchased, which is yet to be drawn down. The Company has approval to increase this facility to $2 million subject to maintenance of a 70% leveraged asset ratio on freehold properties.

The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:


2014 ($) 2013 ($)

Result after income tax 17,348,166 (4,434,558)

financial asseTs

Cash at bank 1,223,870 2,471,107

Trade and other receivables 187,273 217,014

Total 1,411,143 2,688,121

financial liaBiliTies

Trade and other payables 660,710 455,255

ToTal 660,710 455,225


The Company has exposure to the following financial risks:

CREDIT RISkCredit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables and investment in marketable securities.

Trade and Other Receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The company has a diverse range of customers and tenants with properties located throughout several North Western regional NSW communities.

MARkET RISkMarket risk is the risk that changes in market prices such as interest rates and equity prices, will affect the Company’s income or value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Interest Rate Risk

Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. Interest bearing financial assets are generally short-term (six months or less) liquid assets. The Company’s interest rate liability risk arises primarily from external borrowing issued at variable interest rates which exposes the Company to cash flow interest rate risk. If interest rates were 1% higher and the $2 million loan facility was fully drawn the surplus would decrease by $20,000. If interest rates were 1% lower then the surplus would increase by $20,000.

liquidity Risk

Liquidity Risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company’s approach to managing liquidity is to ensure as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses.

As at June 2014 the Company’s liquidity ratio has fallen to 1.2 (2013 ratio 3.7). This is because the Company has expended $2.3 million in the current year on land and buildings (non-current assets), effectively transferring current assets to non-current assets resulting in this reduction in the liquidity or working capital ratio. It is anticipated that in the coming year a maximum of $1.5 million in borrowings will be required to purchase additional properties under the Vested Asset Agreement. This loan facility is interest only for a term of 15 years.

It has been the Company’s practice to pay down debt as cash flow allows whilst maintaining a working capital of no less than $500,000. This is a long term interest only loan facility, which means principal amounts outstanding, may be classified as non-current with only the interest component impacting current liabilities. Long term borrowings will therefore have only a minor impact on the liquidity ratio. Under the vested property agreement with the NSW State Government, Homes North needs to increase the supply of properties by 30 over 10 years.

As at 30 June 2014 the Company held title to 15 properties and had made a commitment to purchase an additional four properties (two settled in July and the remaining two are due to settle in September 2014). It is the Company’s plan to purchase the remaining properties as cash flow allows in order to maximise future capital appreciation and rental cash flows from properties purchased. The working capital ratio is therefore expected to be maintained at its current level of 1:1 for the next five years.



Operational risk

Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the company’s processes, personnel, technology and infrastructure, and form external factors other than credit, market, and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour.

The Company’s objective is to manage operational risks to balance the avoidance of financial losses and damage to the company’s reputation with overall cost effectiveness, and to avoid control procedures that restrict initiative and creativity.

The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior management. This responsibility is supported by the development of overall standards for managing operational risk in the following areas:

• Requirements for appropriate segregation of duties, including the independent authorisation of transactions

• Requirements for the reconciliation and monitoring of transactions

• Compliance with regulatory and other legal requirements

• Documented controls and procedures

• Training and professional development

• Ethical and business standards

• Adoption of risk mitigation strategies, including insurance

21. eConomiC dependenCyThe Company is economically dependent upon ongoing long term contracts with, and minor grant funding from, the NSW State Government. Should this funding or contracts be withdrawn the Company may not be able to continue all of the projects currently in operation.

22. fAiR VAlue meAsuRementsThe Company has the following assets, as set out in the table below, that are measured at fair value on a recurring basis after their initial recognition. The Company does not subsequently measure any liabilities at fair value on a recurring basis and has no assets or liabilities that are measured at fair value on a non-recurring basis.


ReCuRRing fAiR VAlue meAsuRements note 2014 ($) 2013 ($)

invesTmenT PRoPeRTies

Freehold land and buildings - unrestricted 7 (i) 4,550,353 1,845,532

Freehold land and buildings - restricted 7 (ii) 31,721,043 15,449,000

ToTal 36,271,396 17,294,532

(i) Freehold land and buildings – unrestricted: fair value is determined by independent qualified valuers’ on all properties as at 30 June 2014. In subsequent years the process detailed in (ii) below will apply.

(ii) Freehold land and buildings - restricted, fair values are determined by independent qualified valuers on a triennial basis who have experience in the location of the property. On an annual basis the directors review the valuation reports and apply these valuations across the remaining portfolio taking into account fluctuations influenced by location.


DIRECTORS’ DEClARATION

In accordance with a resolution of the directors of Homes North Community Housing Company limited, the directors of the Company declare that:

1. The financial statements and notes as set out on pages 1 to 32 are in accordance with the Corporations Act 2001 and regulations, Division 60 of the Australian Charities and Not for Profits Commission Act 2012, and the Australian Charities and Not for Profits Regulations 2013:

a. Comply with Australian Accounting Standards – Reduced Disclosure Requirements; and

b. Give a true and fair view of the financial position of the Company as at 30 June 2014 and of its performance for the year ended on that date.

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. In forming this opinion the directors have given due consideration to the Economic Dependency note (refer note 21).

Rex Gream (Chair) Mary Devine (Director)

Dated this 21st day of October 2014

SIGNED IN ACCORDANCE wITH THE RESOlUTION OF DIRECTORS.






Homes North Community Housing Company Ltd ABN 78 014 531 758

17/93 Faulkner Street, Armidale NSW, 2350 T (02) 6772 5133 | F (02) 6771 2362

www.homesnorth.org.au

Documents

AnnuAl RepoRt - Whitepages · North board welcomes Hans Mouthaan as their newest director. Hans Mouthaan was the Chairperson of Inverell Community Housing Inc. and brings extensive