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ANNUAL FINANCIAL REPORT

30 JUNE 2015ABN 14 005 304 432

FINANCIAL REPORT

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

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

June 2010 June 2011 June 2012 June 2013 June 2014 June 2015$0

$20

$40

$60

$80

$100

$120

Yooralla Revenue Trend

Revenue from Government Revenue from Other sources

MillionsMillionsMillions

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

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

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

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

Employee benefits and staff agency expenseDiscretionary expenditure for carers & clientsMotor vehicle expenseIT, telecommunications & postage expenseFood supplies expensePrinting, stationery & photocopying expenseRent, insurance & utilities expenseRepairs, maintenance and minor equipment expenseRaw materials and consumables usedFundraising expensesDepreciation and amortisation expensesOther expenses

Yooralla - Expenditure Items

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

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

Claire KeatingChairperson - Finance, Audit, Infrastructure & Risk Committee17 September 2015

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DIRECTORS’ REPORT

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

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

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

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

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

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

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

Services Offer outstanding products and services that support people with disability, in all their diversity, to live the life they choose.

Markets Understand consumer needs and meet these through the development of appropriate partnerships, programs, leadership and management.

Access Easily connect with and use Yooralla services.

Reputation Demonstrate and build integrity through evidence based solutions and measurable results.

Talent Engaged, responsive staff who are educated, skilled, inspired and who demonstrate our Yooralla values

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

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

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

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

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

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

Principal ActivitiesThe company’s principal activities for the year were:

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

fundraising.

Significant events or changes in affairs after balance dateThe directors are not aware of any other matter or circumstance apart from the $1M bequest received from the estate the late Mrs Ellen Louise Blakemore and the placing of Flinders Street property on the market for sale, disclosed under note 23, which will significantly or may significantly affect Yooralla's operations, the result of those operations or Yooralla's state of affairs.

Directors BenefitsNo non-executive director of Yooralla has received or became entitled to receive a benefit by reason of a contract made by Yooralla with a director, with a firm of which a director is a member, or with a company in which a director has a substantial financial interest, except as disclosed in Note 19.

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

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

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

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Proceedings on behalf of the CompanyNo person has applied for leave of Court to bring proceedings on behalf of Yooralla or intervene in any proceedings to which Yooralla is a party for the purpose of taking responsibility on behalf of Yooralla for all or any part of those proceedings. Yooralla was not a party to any such proceedings during the year.

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

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8 5 5 2 1 4

1/1* 1/1* 0/1* 1 1/1*2/2* 3/3* 2/2* 1 2/2*

8 3 1 47 3 1 46 5 4

1/1* 1/1* 1 1/1*7 3/4* 5 28 3/4* 4 2 0 2/3*

2/2* 1/1*2/2*6/6* 1/1*

Mr Gerald Naughtin (6)Dr Jane Tracy (7)

Directors

Board Meetings

Finance, Audit, Infrastructure

& Risk

Governance & People

Dr Wayne Ramsey AM

Number of meetings held

Mr Ian Silk (8)Mr Sanjib Roy (2)

Service Delivery & Quality

Business Strategy &

Performance

Ms Julie Fahey (5)

Investment

Ms Barbara Alexander AO

Ms Claire KeatingMs Fiona Smith (3)

Mr Robert Walker (4)

Number of meetings attended:Dr Peter Langkamp (1)

Committee Meetings

(1) Resigned on 7 August 2014(2) Resigned on 23 November 2014(3) Resigned on 30 June 2015(4) Resigned on 7 August 2014(5) Appointed on 9 April 2015(6) Appointed on 15 October 2014; Resigned on 10 December 2014(7) Appointed on 22 September 2014(8) Resigned on 10 August 2015

* Number of meetings the director was a member of the committee

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Auditors’ Independence and Non-Audit ServicesThe directors received a declaration from the auditor of Yooralla which is included with the Independent Audit Report on pages 41 to 43.

On behalf of the BoardSigned in accordance with a resolution of the Directors.

Claire KeatingActing Chairperson17 September 2015

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CORPORATE GOVERNANCE

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

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

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

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

The annual report which is distributed to all members; The annual general meeting and such other meetings as may be called to obtain

approval for Board action as required by the Constitution.

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

The Board must comprise between seven and ten directors. The members can vote at a general meeting to change the limits on the number of directors. However the limits cannot be lower than five nor greater than fifteen. The Board can still act even if it has fewer directors than its lower limit. However, if it has fewer than five directors it cannot do anything other than appoint more directors so that there are five in all.

A person can become a director by being elected by the members at an Annual General Meeting. At each Annual General Meeting, at least one third of the Board (those on the Board for the longest time since last elected) must resign and having done so, are eligible to be re-elected. These rotation requirements do not include the Chief Executive Officer.

At the first Board meeting after each Annual General Meeting, the Board must elect a Chairman and a Deputy Chairman.

The Board can appoint a member to fill a casual vacancy on the Board. He or she will hold office until the next Annual General Meeting and will be eligible for re-election at that meeting.

·At any meeting of Yooralla, the members present in person or by proxy, who are entitled to vote, may, by a majority vote, remove a director and appoint a replacement.

The Board meets in accordance with the Constitution and its directions and follows meeting guidelines set down to ensure all directors are made aware of, and have available all necessary information, to participate in an informed discussion of all agenda items.

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

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

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

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

Finance, Audit, Infrastructure & Risk Committee (formerly Finance, Audit & Infrastructure)This Committee’s primary purpose is to advise the Board and the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and other members of the senior management team in matters relating to:a) Risk: assisting the Board and the CEO and CFO to discharge their responsibilities for

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

the audit function (including internal audit and the annual external audit);c) Finance: including reviewing Yooralla’s annual budgets, financial reporting and record

keeping, cash flow and Annual Financial Report. The Committee will also advise the Board on the strengths and weaknesses of the Company’s financial position with regard to its strategic and business plans, and its legal obligations;

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

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

Investment CommitteeThis Committee has responsibility and delegated authority to manage the Yooralla Long Term Investment Portfolio (YLTIP) including: a) oversight and control of the YLTIP;b) approval of the YLTIP investment strategy (Investment Strategy in accordance with the

investment guidelines (Investment Guidelines) set out below.The goals of the YLTIP set by the Board are:a) to grow the YLTIP in excess of the rate of inflation in the long term (5 plus years); andb) to generate a growing income stream each year to underpin research, innovation and

policy development.

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

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

Service Delivery & Quality Committee (formerly People, Quality & Policy)The Committee performs a monitoring and advisory role in relation to the senior management responsible for service and quality and reports to the Board in matters relating to the:a) quality of Yooralla’s services and practices;b) practice and behaviours of employees and the interrelationship with the quality of

services Yooralla delivers to clients; andc) effectiveness of the services provided by Yooralla.

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

Business Strategy & Performance Committee This committee's role is to advise and make recommendations to the Board in matters relating to Yooralla’s:a) strategic planning;b) business performance;c) mission; andd) vision and values.

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

Governance & People Committee (formerly Nominations & Remuneration) This committee's role is to advise, support and make recommendations to the Board in matters relating to its composition and the effective discharge of its legal, ethical and functional responsibilities of oversight and corporate governance with particular reference to:a) the parameters of Board responsibility; b) Board composition and skillsets;c) human resources (including remuneration and people policies); andd) the Chief Executive Officer (CEO) performance, review and succession planning.

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

Board’s CompensationA non-executive director may not be paid by Yooralla for his or her work as a director or for services to people with disabilities. He or she is only paid for his or her out of pocket expenses. Subject to section 241 of the Corporations Act, Yooralla must indemnify every director or other officer of Yooralla against all liabilities which he or she may take upon himself or herself as agent for Yooralla or for the benefit or intended benefit of Yooralla. However, Yooralla will not be required to provide an indemnity if the director or officer was acting outside the scope of his or her authority pursuant to the Corporations Act.

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STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2015

NOTES 2015$

2014$

Revenue from operating activities 2 97,856,004 97,580,973Investment income 2 2,765,275 2,321,237Fundraising income 2 3,264,831 3,804,079(Loss) / Profit on disposal of property, plant and equipment 2 (3,987) (81,871)Gain on acquisition of business 2 - 3,474,572

Total operating revenue 103,882,121 107,098,990

Employee benefits and staff agency expense 3 77,626,688 80,047,815Discretionary expenditure for carers & clients 7,212,138 7,226,583Motor vehicle expense 1,893,183 1,974,233IT, telecommunications & postage expense 1,919,592 1,857,844Food supplies expense 1,214,202 1,329,832Printing, stationery & photocopying expense 604,078 542,206Rent, insurance & utilities expense 2,901,566 2,430,161Repairs, maintenance and minor equipmentexpense 2,906,800 3,061,013

Raw materials and consumables used 1,004,943 1,117,670Fundraising expenses 1,530,565 1,569,686Depreciation and amortisation expenses 3 2,385,893 2,114,965Other expenses 3,270,667 4,793,100Total operating expenses 104,470,315 108,065,108

(Deficit) for the year (588,194) (966,118)

Other Comprehensive IncomeItems that will not be reclassified subsequently to profit or loss:Unrealised gains on equity investments (386,063) 1,469,807Realised (loss) / gains on equity investments 95,447 -

Total Comprehensive Income for the year (878,810) 503,689

ANALYSIS OF COMPREHENSIVE INCOMEDeficit from operations (588,194) (4,440,690)Gain on acquisition of business - 3,474,572Other comprehensive income (290,616) 1,469,807

Total Comprehensive Income for the year (878,810) 503,689

(The above Statement of Comprehensive Income is to be read in conjunction with the accompanying notes)

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STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015

NOTES 2015$

2014$

CURRENT ASSETSCash and cash equivalents 16(b) 20,023,349 8,113,107Trade and other receivables 4 1,425,620 2,197,398Other financial assets 5 14,006,244 28,792,928Inventories 6 264,217 276,060Prepayments 293,576 525,404

36,013,006 39,904,897Assets classified as held for sale 7 - 150,000TOTAL CURRENT ASSETS 36,013,006 40,054,897

NON-CURRENT ASSETSProperty, plant & equipment 8 36,814,579 36,779,893Intangible assets 9 3,633,859 2,137,644TOTAL NON-CURRENT ASSETS 40,448,438 38,917,537

TOTAL ASSETS 76,461,444 78,972,434

CURRENT LIABILITIESTrade and other payables 10 9,548,889 11,141,368Employee benefits 11 9,793,754 9,949,152Provisions 12 153,888 199,038TOTAL CURRENT LIABILITIES 19,496,531 21,289,558

NON-CURRENT LIABILITIESEmployee benefits 11 1,506,956 1,346,110TOTAL NON-CURRENT LIABILITIES 1,506,956 1,346,110

TOTAL LIABILITIES 21,003,487 22,635,668

NET ASSETS 55,457,957 56,336,766

EQUITYRetained surpluses 13 53,142,567 53,711,451Special trust funds 14 1,677,952 1,601,815Changes in fair value of equity instruments 15 637,437 1,023,499

TOTAL EQUITY 55,457,957 56,336,766(The above Statement of Financial Position is to be read in conjunction with the accompanying notes)

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STATEMENT OF CASH FLOWS AS AT 30 JUNE 2015

NOTES 2015$

2014$

CASH FLOWS FROM OPERATING ACTIVITIESOperating government grants 87,313,383 85,361,733Receipts from customers/clients 12,029,750 10,872,410Fundraising 4,328,481 4,474,990Payments to suppliers and employees (104,716,190) (102,534,956)Interest paid - -

Net cash from operating activities 16 (a) (1,044,576) (1,825,823)

CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of property, plant & equipment (3,941,287) (2,945,474)Proceeds from sale of property, plant & equipment 170,504 81,971Acquisition of EDAR, net of cash acquired - 174,798Purchase of equity investments (483,932) (75,412)Proceeds from sale of equity investments 1,384,053 -Interest received 1,031,166 1,018,608Dividends received 714,312 607,974Decrease / (Increase) in long term bank deposits 14,080,000 700,000

Net cash from investing activities 12,954,816 (437,536)

CASH FLOWS FROM FINANCING ACTIVITIESRepayment of borrowings - -Capital grants - -

Net cash from / (used) in financing activities - -

Net (decrease) / increase in cash and cash equivalents 11,910,242 (2,263,359)

Cash and cash equivalents at beginning of the year 8,113,107 10,376,466

Cash and cash equivalents at the end of the year 16 (b) 20,023,349 8,113,107

(The above statement of cash flows is to be read in conjunction with the accompanying notes)

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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2015

Special Trust Funds

$

Changes in Fair Value of Equity

Instruments

Retained Surpluses

$

Total$

Balance at 1 July 2014 1,601,815 1,023,499 53,711,451 56,336,766

Surplus / (Deficit) for the period 76,137 - (664,331) (588,194)Other Comprehensive Income -

Realised and unrealised gains/(losses) on equity investments - (290,616) - (290,616)

Transfers to retained surpluses - (95,447) 95,447 -

Total comprehensive income for the year 76,137 (386,063) (568,884) (878,810)

Balance at 30 June 2015 1,677,952 637,437 53,142,567 55,457,957

Balance at 1 July 2013 1,537,401 (446,307) 54,741,983 55,833,077

Surplus / (Deficit) for the period 64,414 - (1,030,532) (966,118)Other Comprehensive Income

Realised and unrealised gains onequity investments - 1,469,807 - 1,469,807Transfers to retained surpluses - - - -

Total comprehensive income for the year 64,414 1,469,807 (1,030,532) 503,689

Balance at 30 June 2014 1,601,815 1,023,499 53,711,451 56,336,766

(The above statement changes in equity is to be read in conjunction with the accompanying notes)

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of PreparationThe financial report is a general purpose financial report which has been prepared in accordance with the requirements of the Australian Charities and Not-for-profits Commission Act 2012 and Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standard Board. The financial report has also been prepared on a historical cost basis, except for certain non-current assets and financial instruments that have been measured at revalue amount or fair value, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The accounting policies adopted are consistent with those of the previous year, unless otherwise noted. The financial report was authorised for issue by the Directors on 17 September 2014.

The financial report is presented in Australian dollars.

Statement of complianceThe financial report complies with Australian Accounting Standards.

Critical accounting judgements and key sources of estimation uncertaintyIn the application of the company’s accounting policies, which are described below, the directors are required to make judgments, estimates and assumptions about carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. 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 following accounting policies have been applied in the preparation of the financial report.

Business CombinationsThe acquisition method of accounting is used to account for all business combinations regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.

Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

On an acquisition-by-acquisition basis, the group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree over the fair value of the group's share of the net identifiable assets acquired is

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recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the acquired subsidiary and the measurement of all amounts has been reviewed, the difference is recognised directly in the income statement as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, which is the rate that a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in the income statement.

Non Current Assets Held for SaleNon-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.

Revenue RecognitionGovernment Grant IncomeRevenue is recognised in accordance with AASB 1004: Contributions. Revenue is recognised when the entity gains control over the revenue and there is no unconditional obligation to repay the revenue. Yooralla therefore recognises grant income even where the service is not delivered until the next financial period.

Sale of Goods Revenue from the sale of goods is recognised when the goods are delivered and titles

have passed, at which time all the following conditions are satisfied: Yooralla has transferred to the buyer the significant risks and rewards of ownership of

the goods; Yooralla retains neither continuing managerial involvement to the degree usually

associated with ownership nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to

Yooralla; and the costs incurred or to be incurred in respect of the transaction can be measured

reliably.

FeesRevenue from a contract to provide services is recognised by reference to the stage of completion of the contract. Revenue from time and material contracts is recognised at the contractual rates as labour hours are delivered and direct expenses are incurred.

Dividend IncomeDividend income is recognised in the income statement when the entity’s right to receive is established.

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Fundraising IncomeRevenue generated from fund raising activities, including donations and bequests of corpus from deceased estates, are recognised in the income statement when received. Non-cash donations, such as shares in listed companies, are recognised when received and brought to account at the fair value on the date of receipt.

Donations are recognised in equity as Special Trust Funds where the corpus is to be maintained and the income generated used for a stated purpose. If a donation where the corpus and net income generated cease to be used for their stated purpose, then these amounts are repayable and therefore are recognised as liabilities.

Rental IncomeYooralla’s policy for recognition of revenue from operating leases is described under 'Leased Assets' below.

Cash and cash equivalentsCash and cash equivalents comprise cash balances and short-term call deposits with original maturities of three months or less. Cash and cash equivalents are stated at nominal value.

For the purposes of the Statement of Cash Flows, cash balances include cash on hand and at bank, and money market investments readily convertible to cash within two working days, net of outstanding bank overdrafts.

InventoriesInventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first-in-first-out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

Financial InstrumentsFinancial assets and financial liabilities are recognised when Yooralla becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

(a) Adoption of revised AASB 9 Accounting Standard: Financial Instruments

Yooralla has elected to early adopt Accounting Standard AASB 9 Financial Instruments from 1 July 2010. This new standard has been adopted because it includes requirements for the classification and measurement of financial assets which improve and simplify the approach when compared with the requirements of the previous Accounting Standard AASB 139 Financial Investments: Recognition and Measurement.

AASB 9 allows, and Yooralla has made, an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Yooralla considers this to result in a presentation that better presents performance and operations of the organisation.

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Investments in equity instruments, which were previously classified as available for sale financial assets, are from 1 July 2010 classified as equity instruments re-valued through other comprehensive income. They continue to be valued at fair value with changes in value being recognised in the Changes in Fair Value of Equity Investments reserve (previously Unrealised gains/(losses) on available for sale investments reserve). Consequently adoption of AASB 9 has no effect on the valuation of Yooralla’s net assets or total comprehensive income.

All gains and losses on equity investments thereon are presented in other comprehensive income as part of the Statement of Comprehensive Income. Under AASB 9, there is no recycling of the realised gains and losses to the net profit for the period as previously required under AASB 139. There is also no requirement to test Yooralla’s equity investments for impairment with the result that there is no transfer of unrealised impairment losses from the asset revaluation reserve to the net profit for the period.

The transition provisions of AASB 9 require the standard to be applied retrospectively but it cannot be applied to investments that were disposed of prior to the initial application date, which in Yooralla’s case is 1 July 2010. Therefore, investments that were sold prior to 1 July 2010 have been accounted for under the previous standard AASB 139 where realised gains and losses on sales are included in profit for the period. After 1 July 2010 all realised gains and losses on the sale of investments are included in other comprehensive income.

(b) Financial Assets

Financial assets are classified into the following specified categories: financial assets ‘at fair value through other comprehensive income’ (FVTOCI), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.

Held-to-maturity investments

Bills of exchange and debentures with fixed or determinable payments and fixed maturity dates that the Yooralla has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment.

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Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the effect of discounting is immaterial.

Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets that are carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period.

For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of AFS equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of investments revaluation reserve. In respect of AFS debt securities, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

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(c) Financial liabilities and equity instruments

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

Equity instruments

Yooralla is a company limited by guarantee and therefore the liability of members of Yooralla is limited to $50 each. The liability continues for 12 months after a person stops being a member. Each member agrees to contribute up to that amount to Yooralla if it is wound up and the money is needed to pay the debts and liabilities of Yooralla or the cost of winding up. Under the Memorandum and the Articles of Association dividends are not able to be declared.

Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.

Other financial liabilities

Other financial liabilities, including borrowings and trade and other payables, are initially measured at fair value, net of transaction costs.Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of financial liabilities

Yooralla derecognises financial liabilities when, and only when, the Yooralla’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

Property, Plant and EquipmentProperty, plant and equipment are carried in the accounts at acquisition cost less accumulated depreciation and any accumulated impairment losses. Land and Buildings are measured at cost less accumulated depreciation on buildings and less any impairment losses recognised after the date of revaluation.Depreciation is provided on a straight-line basis on all property, plant and equipment, other than freehold land.

Major depreciation periods:2014 2013

· Freehold buildings 40 years 40 years· Leasehold improvements The lease term The lease term· Plant and equipment 2 to 10 years 2 to 10 years

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An item of property, plant & equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is disposed.

IntangiblesIntangible assets are acquired and initially measured at cost. Following initial recognition intangibles assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

Amortisation is provided on a straight-line basis over the estimated useful live. Estimated useful lives are deemed to be 4-5 years.

Impairment of non-financial assetsAssets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment losses are recognised in the income statement.

Recoverable amount is the higher of an asset’s (or cash-generating unit’s) fair value less costs to sell and value in use. The value in use is:(i)  the present value of the estimated future cash flows relating to the asset using a pre-tax

discount rate specific to the asset or cash generating unit to which the asset belongs; or(ii)  the depreciated replacement cost of the asset when the future economic benefits of an asset of a not-for-profit entity are not primarily dependent on the asset’s ability to generate net cash inflows and where the entity would, if deprived of the asset, replace its remaining future economic benefits.

Leased AssetsLeases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases.

The Company as lessor

Amounts due from lessees under finance leases are recognised as receivables at the amount of the Company’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Company’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

The Company as lessee

Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

Lease payments are apportioned between finance charges and reduction of the lease

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obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the company’s general policy on borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

ProvisionsProvisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Employee BenefitsA liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement

Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the organisation in respect of services provided by employees up to reporting date.

Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.

A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.

When sufficient information is not available to use defined benefit accounting for the defined benefit plan, it is accounted for under AASB 119 paragraphs 44-46 as if it were a defined contribution plan. Refer to Note 11 for more detail.

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TaxationYooralla is exempt from income tax by virtue of Section 23 of the Income Tax Assessment Act 1936.

Goods and Services Tax (GST)Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

ii. for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the statement of cash flows on a net basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

Application of new and revised Accounting Standards

Amendments to AASBs and the new Interpretation that are mandatorily effective for the current year

In the current year, the Company has applied a number of amendments to the AASBs and a new Interpretation issued by the Australian Accounting Standards Board (AASB) that are mandatorily effective for an accounting period that begins on or after 1 July 2014, and therefore relevant for the current year end. The application of these amendments and interpretation do not have any material impact on the disclosures or on the amounts recognised in the financial statements.

Standards and Interpretations in issue not yet adopted

At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not yet effective.

Standard / Interpretation Effective for annual reporting periods beginning on or after

Expected to be initially applied in the financial year ending

* AASB 9 ‘Financial Instruments’, and the relevant amending standards

1 January 2018 30 June 2019

AASB 15 'Revenue from Contracts with Customers' and AASB 2014-5 'Amendments to Australian Accounting Standards arising from AASB 15'

1 January 2018 30 June 2019

AASB 2014-4 ‘Amendments to Australian Accounting Standards - Clarification of Acceptable Methods of Depreciation and Amortisation'

1 January 2016 30 June 2017

AASB 2015-1 ‘Amendments to Australian Accounting Standards – Annual

1 January 2016 30 June 2017

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Improvements to Australian Accounting Standards 2012-2014 Cycle'AASB 2015-2 ‘Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101'

1 January 2016 30 June 2017

AASB 2015-3 ‘Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality'

1 January 2015 30 June 2016

* Yooralla had early adopted AASB 9 from 1 July 2010.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015

NOTE 2 REVENUE 2015 2014$ $

Revenue from operating activitiesRecurrent government grants - State 82,941,355 83,187,575

- Commonwealth 2,700,147 2,243,334Capital grants - State government 397,857 123,647

- Private capital grants 30,766 3,314Sale of goods - Business Services 2,387,113 2,753,744Bequests - Capital bequests 1,063,841 671,331Fee income 8,334,926 8,598,028Total revenue from operating activities 97,856,004 97,580,973

Investment incomeInterest on short-term deposits 907,245 1,084,608Rental income - Office space 624,125 548,136Income from equity investments 1,233,905 688,493Total revenue from investment income 2,765,275 2,321,237

Fundraising income 3,264,831 3,804,079

Other income(Loss) on disposal of property, plant and equipment (2,412) (81,871)(Loss) on write off of intangible assets (10,627) -Profit on land held for sale 9,052 -Gain on acquisition of EDAR - 3,474,572

(3,988) 3,392,701

Total revenue 103,882,122 107,098,990

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NOTE 3 EXPENSES 2015 2014$ $

Employee benefits and staff agency expenseSalaries and wages expense 61,142,040 61,205,705Superannuation expense 5,600,750 5,500,951Workers compensation expense 1,749,275 2,494,704Annual and long service leave expense 6,627,752 6,538,236Employee training expense 591,941 857,865Staff agency expense 1,914,931 3,450,354

77,626,688 80,047,815

Depreciation and amortisation expenseBuildings 738,057 750,806Leasehold improvement 382,485 311,935Plant and equipment 756,361 744,477Motor vehicles 30,328 55,999Computer software 478,663 251,748

2,385,893 2,114,965

Operating lease expense 2,354,996 2,138,046Provision for doubtful debts and bad debts 58,926 93,326

Auditors remuneration (i) - audit fee 46,700 55,450- other services 58,000 -

(i) The auditor of Yooralla is Deloitte Touche Tohmatsu

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NOTE 4 RECEIVABLES (CURRENT) 2015 2014$ $

Trade receivables (i) 773,002 868,507Less allowance for impairment loss (5,435) (36,319)

767,567 832,188Accrued interest on term deposits 144,427 268,348Accrued franking credits income 225,530 189,915Other accrued income 180,545 795,491Other receivables 107,551 111,456

1,425,620 2,197,398(i) Trade receivables are non-interest bearing and generally on 30-60 day terms.

A provision for impairment loss is recognised when there is objective evidence that an individual trade receivable is impaired. An impairment loss of $5,435 has been recognised by Yooralla at reporting date.

As at reporting date the ageing analysis of trade receivables is as follows:

Total 0-30 days 31-60 days 61-90 days +91 days +31 daysPDNI* PDNI* PDNI* CI*

30 June 2015 773,002 446,421 233,453 44,679 43,014 5,435

30 June 2014 868,507 417,595 215,444 91,490 107,660 36,319* PDNI - Past due not impaired* CI - Considered impaired

NOTE 5 FINANCIAL ASSETS (CURRENT) 2015 2014$ $

Term deposits - at fair value 2,620,000 16,700,000Equity instruments at fair value through Other Comprehensive IncomeEquity investments - at fair value 11,386,244 12,092,928

14,006,244 28,792,928

Equity Investments are classified as not held for trading and are units in managed trust funds that have no fixed maturity date. Their fair value has been determined indirectly by reference to published price quotations in an active market.Equity investments during financial year 2015 included related dividends reinvested of $395,488.Term Deposits are for terms of greater than 90 days.

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NOTE 6 INVENTORIES (CURRENT) 2015 2014$ $

Raw materials 234,365 183,158Finished goods 29,852 92,902

264,217 276,060

NOTE 7 ASSETS CLASSIFIED AS HELD FOR SALE 2015 2014$ $

Land - 150,000- 150,000

Nil land held for sale at 30 June 2015 (2014: property at 8 Irwin Road, Benalla was classified as held for sale).

NOTE 8 PROPERTY, PLANT & EQUIPMENT 2015 2014$ $

Carrying amounts of:Land 14,069,627 14,069,627Buildings 18,641,771 19,238,439Leasehold improvements 2,163,840 1,312,513Plant and equipment 1,895,140 2,084,784Motor vehicles 44,201 74,529

36,814,579 36,779,893

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Freehold land Buildings

Leasehold improvements

Plant and equipment

Motor vehicles Total

$ $ $ $ $ $CostBalance at 1 July 2013 11,014,627 27,660,716 2,723,329 7,868,777 280,085 49,547,535

Additions - 196,796 420,555 862,106 - 1,479,457

Disposals (90,000) (69,327) - (844,379) (45,214) (1,048,919)

Acquisitions through business combinations 3,330,000 - 163,635 88,357 55,467 3,637,459

Reclassified as held for sale (175,000) - - - - (175,000)

Balance at 30 June 2014 14,079,627 27,788,186 3,307,519 7,974,860 290,338 53,440,531

Additions - 141,388 1,233,811 580,581 - 1,955,781

Disposals - - (102,455) (480,148) (9,653) (592,255)

Balance at 30 June 2015 14,079,627 27,929,574 4,438,876 8,075,293 280,685 54,804,055

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Freehold land Buildings

Leasehold improvements

Plant and equipment

Motor vehicles Total

$ $ $ $ $ $Accumulated depreciation and impairmentBalance at 30 June 2013 40,000 7,805,106 1,683,070 5,974,296 205,024 15,707,497

Eliminated on disposals of assets (5,000) (6,166) - (828,697) (45,214) (885,077)

Eliminated on reclassification as held for sale (25,000) - - - - (25,000)

Depreciation expense - 750,806 311,935 744,477 55,999 1,863,217

Balance at 30 June 2014 10,000 8,549,746 1,995,006 5,890,077 215,809 16,660,637

Disposals - - (102,455) (466,284) (9,653) (578,390)

Depreciation expense - 738,057 382,485 756,361 30,328 1,907,230

Balance at 30 June 2015 10,000 9,287,803 2,275,036 6,180,154 236,484 17,989,477

Based on independent property valuations done in the year ended 30 June 2012 of $45,130,000 and independent property valuation as a result of the acquisition of EDAR as at 1 July 2013 of $3,300,000, the Directors are satisfied that the valuation has not materially changed during the year and exceeds the book value at 30 June 2015

The land reclassified as held for sale in the prior year was disposed of in the current year

Impairment losses recognised in respect of property, plant and equipment in the year amounted to $nil (2013: $nil).

The impairment losses have been included in the line item 'other expenses' in the statement of comprehensive income.

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NOTE 9 INTANGIBLE ASSETS 2015 2014$ $

Computer software at cost 3,742,894 2,283,325Accumulated amortisation (863,636) (399,823)Written down value 2,879,257 1,883,502

Work in progress - at cost 754,602 254,142

Total intangible assets - at cost 4,497,496 2,537,467Total accumulated amortisation (863,636) (399,823)Total written down value 3,633,859 2,137,644

Opening Balance

at 01/07/14 AdditionsTransfer In / (Out)

Disposals at WDV

Amortisation Expense

ClosingBalance

at 30/06/15Software 1,883,502 112,799 1,372,245 (10,627) (478,663) 2,879,257Work in progress 254,141 1,872,707 (1,372,245) - - 754,602

Total 2,137,643 1,985,506 - (10,627) (478,663) 3,633,859

Opening Balance

at 01/07/13 AdditionsTransfer In / (Out)

Disposals at WDV

Amortisation Expense

ClosingBalance

at 30/06/14Software 923,374 402,954 808,924 - (251,748) 1,883,502Work in progress - 1,063,065 (808,924) - - 254,141

Total 923,374 1,466,019 - - (251,748) 2,137,643

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NOTE 10 PAYABLES (CURRENT) 2015 2014$ $

Trade payables (i) 1,618,995 1,935,539Other payables 3,743,277 2,551,787Goods & services tax payable 542,687 580,016Salaries and wages accrual 1,822,791 2,678,218Superannuation payable (1,604) 492,801Prepaid operating revenue 1,629,363 2,706,065Jean Chambers Foundation 193,380 196,943

9,548,889 11,141,368

(i) Trade payables are non-interest bearing and generally on 7 to 30 day terms.

Jean Chambers FoundationBalance at beginning of the financial year 196,943 196,436Interest earned 6,893 7,366Operating expenditure (10,456) (6,859Balance at end of the financial year 193,380 196,943

NOTE 11 EMPLOYEE BENEFITS 2015 2014$ $

Provision for employee benefits (current) 9,793,754 9,949,152Provision for employee benefits (non-current) 1,506,956 1,346,110

11,300,710 11,295,262

Employee BenefitsThe aggregated employee benefits recognised and included in the financial statements are as follows:Annual Leave - current 5,059,925 5,078,655Long Service Leave - current 4,733,829 4,870,497Long Service Leave - non-current 1,506,956 1,346,110Total - Provision for employee benefits 11,300,710 11,295,262Salaries and wages accrual (i) 1,822,791 2,678,218Superannuation payable (i) (1,604) 492,801Total Employee Benefits 13,121,897 14,466,281

(i) The salaries and wages accrual and superannuation payable are included in Note 10 Payables (Current).

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Superannuation Commitments

The superannuation plans provide both accumulated and defined benefits, the latter based on years of service and final average salary. Eligible employees can contribute to the plans at various percentages of their wages and salaries and Yooralla also contributes to these plans. Contributions by Yooralla into the accumulation fund of up to 9.5% and into defined benefits fund of up to 15.25% of employees' wages and salaries are legally enforceable in Australia (2014: 9.25% and 15.25% respectively).

Three of Yooralla's employees (30 June 2014: five employees) will receive defined benefit post-employment benefits from First State Super. First State Super is a defined benefit multi-employer plan. Sufficient information is not available to account for First State Super as a defined benefit plan as each employer is exposed to actuarial risks associated with current and former employees of other entities. As a result there is no consistent and reliable basis for allocating the obligation, assets and costs to individual entities. Therefore Yooralla has adopted defined contribution accounting for these employees.

We have not been notified by First State Super, as at reporting date, of any notional deficit of net assets attributable to Yooralla employees in the Defined Benefit Scheme as at 30 June 2015 (30 June 2014: $19,078 surplus).Past investment performance is not a reliable indicator of future performance. Even though the First State Super Fund has attained a satisfactory funding status with the assistance of strong investment returns, on the advice of the Fund's actuary, the contribution rates will remain unchanged for the financial year.

NOTE 12 PROVISIONS 2015 2014$ $

Provision for termination benefits (i) 153,888 199,038

(i) The provision for termination benefits represents employees entitlement to redundancy pay according to Yooralla's redundancy policy and equivalent years of service. At year end, Yooralla had entered into redundancy arrangements with seven employees as a result of divisional restructures (2014: 15).

NOTE 13 RETAINED SURPLUSES 2015 2014$ $

Balance at beginning of financial year 53,711,451 54,741,983(Deficit) before other comprehensive income (588,194) (966,118)(Deficit) / surplus attributable to special trust funds (76,137) (64,414)Realised gains on equity investments 95,447 -Balance at end of financial year 53,142,567 53,711,451

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NOTE 14 SPECIAL TRUST FUND 2015 2014$ $

Hilltops Trust FundBalance at beginning of the financial year 219,701 211,989Additional contributions - -Income 7,689 7,950Capital Expenditure - -Operating Expenditure (7,026) (238)Balance at end of the financial year 220,364 219,701

Katherine Bourke Trust FundBalance at beginning of the financial year 1,160,811 1,106,101Additional contributions - -Income 118,444 72,200Capital Expenditure (680) -Operating Expenditure (50,035) (17,490)Balance at end of the financial year 1,228,539 1,160,811

Hemmingway Trust FundBalance at beginning of the financial year 193,616 192,625Additional contributions - -Income 6,777 7,223Capital Expenditure - -Operating Expenditure - (6,232)Balance at end of the financial year 200,393 193,616

Hampton Trust FundBalance at beginning of the financial year 27,687 26,686Additional contributions - -Income 969 1,001Capital Expenditure - -Operating Expenditure - -Balance at end of the financial year 28,656 27,687

Total Special Trust Funds 1,677,952 1,601,815

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NOTE 15 CHANGES IN FAIR VALUE OF EQUITY INSTRUMENTS 2015 2014

$ $

Balance at beginning of financial year 1,023,500 (446,307)Unrealised (loss) / gain on equity investments (290,616) 1,469,807

Realised gain on equity investments transferred to retained surplus (95,447) -Transfers to accumulated funds - -Balance at end of financial year 637,437 1,023,500

NOTE 16 CASH AND CASH EQUIVALENTS 2015 2014$ $

(a) Reconciliation of Surplus to the net cash flows from operating activities

Loss / Surplus for the year (588,194) (966,118)Adjust for non-operating and non-cash items: Depreciation of property, plant and equipment 1,907,230 1,863,217 Amortisation of Intangibles 478,663 251,748 Loss on disposal of property, plant and equipment 3,988 81,871 Interest received (907,245) (1,091,975) Dividends received (1,233,905) (688,493) Gain on acquisition of business - (3,474,164)

Change in assets and liabilities: Trade and other receivables 683,397 (353,105) Inventories 11,842 10,563 Prepayments 231,829 (106,732) Trade and other payables (1,592,479) 1,545,207 Provision for employee benefits (39,702) 1,102,158

Net cash flow from operating activities (1,044,576) (1,825,823)(b) Reconciliation of cash and cash equivalentsCash and cash equivalents comprise: - Cash on hand 4,100 18,500 - Cash at bank 139,249 644,607 - Short term deposits 19,880,000 7,450,000Closing cash and cash equivalents balance 20,023,349 8,113,107

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NOTE 17 EXPENDITURE AND CAPITAL COMMITMENTS 2015 2014$ $

a) Lease expenditure commitments: Operating leases (non-cancellable) - not later than one year 1,679,441 2,039,560 - later than one year and not later than five years 2,509,570 3,677,721 - greater than five years 19,372 143,533

4,208,384 5,860,814

b) Capital commitmentsAs at 30 June 2015, Yooralla has capital commitments totalling $145,000 which had been contracted for as at that date but not recognised as a liability. Projects comprising the balance are: $70,000 for the development of a community hub in Fawkner including a retainer, $30,000 for the reconfiguration of a property at Nicholas Street, $25,000 Ferntree Gully day service refurbishment works, $15,000 Noble Park refurbishment works and $5,000 for a new door way in a kitchen at Millawa.

NOTE 19 FINANCING ARRANGEMENTS 2015 2014$ $

Yooralla has access to the following financing facilities with Westpac BankOverdraft facility 1,000,000 1,000,000Bank guarantee 300,000 270,000

1,300,000 1,270,000

Facilities utilised at reporting dateOverdraft facility - -Bank guarantee 264,992 105,461

264,992 105,461

Facilities not utilised at reporting dateOverdraft facility 1,000,000 1,000,000Bank guarantee 35,008 5,008

1,035,008 1,005,008

These facilities are secured by registered mortgage over property situated at 244-248 Flinders Street, Melbourne.

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NOTE 19 RELATED PARTY DISCLOSURESThe Board of Yooralla during the financial year comprised:Dr Peter Langkamp (Yooralla Chairperson, resigned 7 August 2014)Mr Sanjib Roy (Resigned 23 November 2014)Mr Ian Silk (Resigned 10 August 2015)Mr Phillip Slater (resigned 14 February 2014)Ms Fiona Smith (Resigned 30 June 2015)Ms Claire KeatingMr Robert Walker (resigned 7 August 2014)Ms Barbara AlexanderMr Wayne RamseyMs Julie Fahey (Appointed 9 April 2015)Mr Gerald Naughtin (Appointed 15 October 2014; Resigned 10 December 2014)Dr Jane Tracy (Appointed 22 September 2014)

No remuneration or superannuation benefit has been received or is due and receivable by Directors of Yooralla, except for Mr Sanjib Roy who received remuneration in his capacity as the Chief Executive Officer of Yooralla, between July 2014 - November 2014.

During the prior financial year ending 30 June 2014 Mr Rob Walker performed legal services for Yooralla on behalf of Baker & McKenzie. Legal fees of $10,083 were charged on an arm’s length basis and subsequently paid. During the year ending 30 June 2015, an arm’s length professional service fee of $18,639 was paid to PricewaterhouseCoopers, an entity associated with Ms Claire Keating.

Compensation for Key Management Personnel 2015 2014

$ $Short-term Benefits 2,039,773 1,595,775Other Long-term Benefits 23,807 76,434Post Employment Benefits 143,624 124,281

2,207,204 1,796,490

Key management personnel includes the CEO plus senior management employees who reported directly to the CEO for the financial year or part thereof. During 2015 this was 16 personnel (2014: 14 personnel). As at the reporting date this has been reduced to 10 personnel.

Short-term Benefits include salary and wages payments, Other Long-term Benefits are long service leave provisions and Post Employment Benefits are payments made for employee superannuation.

NOTE 20 SEGMENT INFORMATIONYooralla operates in Victoria within the community sector providing services to persons with disabilities.

NOTE 21 FAIR VALUE & INTEREST RATE RISKYooralla’s financial instruments comprise of receivables, financial assets available for sale (bank bills and equity investments), cash and deposits at call. Yooralla does not enter into or trade financial instruments for speculative purposes.The main risks arising from Yooralla’s financial instruments are interest rate risk, credit risk, price risk and liquidity risk. The Board through the Finance, Audit, Infrastructure & Risk Committee and the Investment Committee consider these risks. Yooralla used various methods to measure and manage the different types of risk to which we are exposed. These include monitoring the levels of exposure to interest rate movement and assessment of market forecasts for interest rates. Ageing analysis of receivables is undertaken to manage credit risk. Liquidity is managed through daily monitoring of cash flow requirements and development of a forecast cash flow that is updated at least monthly.The primary responsibility for identification of financial risks rests with the Board through the Finance, Audit, Infrastructure & Risk and Investment Committees. These committees review and set policies for managing each of the risks set out below, including the investment exposure, setting of limits and reserves.

Risk Exposures and Responses(a) Interest rate risk

Yooralla’s exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised, at the reporting date are as follows:

Financial Instruments

Floating interest Rate

Fixed interest rate maturing 1 yr or less

Non-interest Bearing

Total amount as per statement of financial position

Weighted average effective interest rate

2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

1. Financial AssetsCash and bank 139 645 4 19 143 663 N/A N/ATrade receivable 768 832 768 832 N/A N/AShort term deposits 22,500 24,150 22,500 24,150 3.37 3.89Equity investments 11,386 12,093 11,386 12,093 N/A N/AListed shares N/A N/A

Total financial assets 139 645 22,500 24,150 12,158 12,944 34,797 37,738N/A – not applicable for non-interest bearing financial instruments.

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(b) Sensitivity analysisThe following sensitivity analysis is based on the interest rate risk exposure in existence over the year ended 30 June 2015. If interest rates had moved as illustrated below, with all other variables held constant, the Yooralla operating surplus and equity would have been affected as follows:

Surplus / (Deficit) Higher / (Lower)

2015 2014$ $

+1% (100 basis points) 256,054 287,964 -1% (100 basis points) (256,054) (287,964)

(c) Credit RiskCredit risk arises from the financial assets of Yooralla, which comprise cash and cash equivalents, trade and other receivables and available for sale financial assets. Yooralla’s exposure to credit risk arises from potential default of the counter party on its contractual obligations resulting in financial loss.

Trade receivables consist of arrangements with state and federal governments, Dualware commercial customers, clients, financial intermediary and TAC. Receivables are monitored and followed up on an ongoing basis to reduce the potential for bad debts. Our current trade terms are 30-60 days (refer to Note 4 for details of the ageing of trade receivables as at 30 June 2015).

The credit risk on liquid funds is limited because the counter parties are reputable banks with high credit ratings. Equity securities are spreads amongst highly reputable fund managers and stocks to minimise the risk of default.

(c) Credit RiskThe accounting standard defines this as the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market price. At balance date Yooralla has 34% (2014: 33%) of its investment portfolio (inclusive of cash) in managed fund units which are exposed to price risk. By nature, these investments can never be risk free as the market price of these securities can fluctuate. To limit this risk Yooralla diversifies its portfolio in accordance with limits set by the Investment Committee and ultimately the Board. The units purchased are for equity investments that are publicly traded on the ASX. The investment philosophy set by the Board regards these investments as medium to long term.

(d) Price RiskThe accounting standard defines this as the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market price. At balance date Yooralla has 34% (2014: 33%) of its investment portfolio (inclusive of cash) in managed fund units which are exposed to price risk. By nature, these investments can never be risk free as the market price of these securities can fluctuate. To limit this risk Yooralla diversifies its portfolio in accordance with limits set by the Investment Committee and ultimately the Board. The units purchased are for equity investments that are publicly traded on the ASX. The investment philosophy set by the Board regards these investments as medium to long term.

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(e) Liquidity RiskThe accounting standard defines this as the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The ultimate responsibility for this rests with the Board. Management manages the liquidity risk by maintaining adequate cash reserves and by continuously monitoring forecast and actual cash flows while matching the maturity profiles of financial assets and liabilities. Given the current surplus cash assets, liquidity risk is minimal.

(f) Fair valuesThe Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial statements represents their net fair values for both 30 June 2015 and 30 June 2014.The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels:Level 1 - quoted prices in active markets for identical assets and liabilitiesLevel 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices)Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs)

Level 1 Level 2 Level 3 Total$ $ $ $

2015Equity Instruments- equity investments 11,386,244 - - 11,386,244

11,386,244 11,386,244

Level 1 Level 2 Level 3 Total$ $ $ $

2014Equity Instruments- equity investments 12,092,928 - - 12,092,928

12,092,928 12,092,928

NOTE 22 ECONOMIC DEPENDENCYYooralla receives a significant proportion (2015: 83%, 2014: 81%) of its operating revenue from the Victorian State Government and the Federal Government, and is therefore dependent on that income to sustain operations.

NOTE 23 SUBSEQUENT EVENTS AFTER BALANCE SHEET DATEOn 17 July 2015, a bequest of $1M was received from the estate of the late Mrs Ellen Louise Blakemore.In mid-September 2015, Yooralla has put the Flinders Street property, included in Buildings in Note 8, on the market for sale.Other than the above, there has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the company, the results of those operations, or the state of affairs of the entity in future financial years.

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DIRECTORS’ DECLARATION

In accordance with a resolution of the Directors of Yooralla made pursuant to s60-15 of the AustralianCharities and Not-for-profits Commission Regulation 2013, I state that:

In the opinion of the Directors:

(a) the financial statements and notes of Yooralla are in accordance with the Australian Charities and Not-for-profits Commission Act 2012, including:

(i) giving a true and fair view of Yooralla's financial position as at 30 June 2015 and of its performance for the year ended on that date; and(ii) complying with Accounting Standards and Australian Charities and Not-for-profits Commission Regulation 2013; and

(b) there are reasonable grounds to believe that Yooralla will be able to pay its debts as and when they become due and payable.

On behalf of the Board:

Claire Keating Acting Chairperson17 September 2015

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17 September 2015

Dear Board MembersYooralla

In accordance with Subdivision 60-C of the Australian Charities and Not-for-profits Commission Act 2012, I am pleased to provide the following declaration of independence to the directors of Yooralla.

As the lead audit partner for the audit of the financial statements of Yooralla for the financial year ended 30 June 2015, I declare to the best of my knowledge and belief, there have been no contraventions of:

i. the auditor independence requirements as set out in the Australian Charities and Not-for-profits Commission Act 2012 in relation to the audit; and

ii. any applicable code of professional conduct in relation to the audit.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

Isabelle LefevrePartner Chartered Accountants

Deloitte Touche TohmatsuABN 74 490 121 060

550 Bourke StreetMelbourne VIC 3000GPO Box 78Melbourne VIC 3001 Australia

DX: 111Tel: +61 (0) 3 9671 7000Fax: +61 (0) 9671 7001www.deloitte.com.au

The Board of DirectorsYooralla244 Flinders StreetMELBOURNE VIC 3000

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Independent Auditor’s Report to the members of Yooralla

We have audited the accompanying financial report of Yooralla, which comprises the statement of financial position as at 30 June 2015, the statement of profit or loss and other comprehensive income, the statement of cash flows and the statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration as set out on pages 13 to 40.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Australian Charities and Not-for-profits Commission Act 2012 (the ACNC Act) and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control, relevant to the entity’s preparation of the financial report that gives a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Deloitte Touche TohmatsuABN 74 490 121 060

550 Bourke StreetMelbourne VIC 3000GPO Box 78Melbourne VIC 3001 Australia

DX: 111Tel: +61 (0) 3 9671 7000Fax: +61 (0) 9671 7001www.deloitte.com.au

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Opinion

In our opinion, the financial report of Yooralla is in accordance with Division 60 of the ACNC Act, including:

(a) giving a true and fair view of the company’s financial position as at 30 June 2015 and of its performance for the year ended on that date; and

(b) complying with Australian Accounting Standards and Division 60 of the Australian Charities and Not-for-profits Commission Regulation 2013.

DELOITTE TOUCHE TOHMATSU

Isabelle LefevrePartnerChartered AccountantsMelbourne, 17 September 2015