Rosewood :: Annual Report 2015-2016

ANNUAL REPORT 2015-2016

Conten ts 2015-2016 Board Members

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President’s Report

4

Chief Executive Officer’s Report

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Treasurer’s Report

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Financials 14

Independent Auditor’s Report

16

Statement by The Board of Directors

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Statement of Profit or Loss and Other Comprehensive Income

19

Statement of Financial Position

20

Statement of Changes in Equity

21

Statement of Cash Flows

22

Notes to the Financial Statements

23

Statement of Income and Expenditure

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Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

2 015- 2016 B oa rd Me m be rs BOARD POSITION

NAME

President

Alan Ross

Vice President

Dale Haldane

Dr Barbara Horner

Treasurer

Michael Hadfield

Committee Members

Fiona Barclay

John Pirie

1

2

3

1 Alan Ross 2 Dale Haldane 3 Dr Barbara Horner 4 Michael Hadfield 5 Fiona Barclay 4

5

6

6 John Pirie

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President’s Report 2015–2016

Presiden t ’s R eport Welcome to the 62nd Annual General Meeting of Rosewood Care Group.

Thank you all for coming today. Our board looks forward to sharing our review of the year that has passed and considering our vision for Rosewood’s future. This is an exciting and challenging time of change for our group as well as the whole industry.

This year we have been looking hard at our future structure, considering the core drivers for why we do what we do, how we can best serve our community now, and how we will work in a future environment quite changed from the challenges from our past to continue our tradition of excellence in service to the aged community.

Key projects for the board’s consideration this year have been management of the construction contract for the new Leederville facility, and consideration of the future operation of the Cleaver Street facility. These have driven review and development our vision for the association as a whole focused on the governance systems and our vision for the executive roles and performance standards.

Operational Performance Rosewood’s CEO Mario Zulberti will report in detail on operational matters. Mario and his team have been particularly engaged this year in the consideration of the ramp up of the new facility that will come on line next year at Britannia Street.

This has involved development of management systems and IT that are already being implemented in the present operations. New software systems introduced to streamline the current processes will contribute to future growth with the development of management systems and skills framed around the planned increase in the scale of our operation.

We recognised that earlier this year that the consequence of the current Commonwealth government policy affecting our ACFI funding

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required a concerted response if we were to sustain our operations. With advice from consultant Jackie Dillon, the executive team has successfully managed a significant uplift in those income levels by now. The process has provided development of Rosewood’s understanding of how we can work to derive stronger income that we can apply to the provision of better service for our residents, and this knowledge will continue to inform and support future operations.

This year of change has seen our smaller operations base deliver a budget deficit, but on the scale of the overall balance sheet, and in light of the major project developments we are considering, that result is manageable. We are also confident that we have maintained the excellence of care service that Rosewood is well known for. Our record of a stable and dedicated staff cohort continues with enthusiasm and loyalty that is a credit to Mario and his executive team’s leadership. Key indicators such as the low number of claims against workers compensation insurance and availability of staff to work unexpected shifts show that the core drivers for the quality of our residents’ experience are travelling well. Manifest increases in ACFI income have been accompanied by modest increases in our overall costs, demonstrating that the excellent care that we provide justifies the income uplift rather than demanding significantly more expensive inputs.

Formal staff and resident satisfaction surveys and benchmarking demonstrate high levels of support for our services. Rosewood enjoys a strong reputation among industry peers as a effective small player that delivers a respectable contribution in the industry.

Rosewood has enjoyed excellent occupancy rates over the year. We continue to see the strong uplift in bond values that underpins our potential to grow into the new facilities, while we balance a level of accommodation for concessional

Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

President’s Report 2015–2016

residents who are unable to source provision for bond expenditure at a rate well in excess of industry standards.

expectation that we will see practical completion of the building in July next year and we will begin moving in August after that.

When Rosewood moves into the new premises at Britannia Street next year, we are confident that we will maintain the care and service for all our residents during that time of transition, moving on to provide an attractive new home for many more residents as the new place opens up.

This year we have worked hard with consultants including Architects MDA and Planners TPG as well as industry experts from the Ansell group to examine options, refine briefing for, and engage with authorities and the community to apply for development approval for the future facility here at Cleaver Street. The design phase is well advanced and we expect to submit for development application next month with a sophisticated proposal that provides a range of choices of accommodation, celebrates and retains the existing heritage house here, contributing to our neighbourhood with accessible medical services, day care for the elderly community and an engaging street front that encourages social interaction. We consider that the new vision for

The construction problems that beset our ground works at Leederville appear to be behind us, thanks not only to the excellent advice from our consultants at Morley Davis Architects and Beck Consulting with their expert advisers, but also because of the strong input from our executive team who have all worked to resolve the difficulties faced by the contractors. This final construction phase now anticipates lock-up of the new building by December this year with the

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President’s Report 2015–2016

Cleaver Street will show how our aging community can be embraced and provided with a positive outlook for how we can all expect to enjoy and celebrate this natural phase of a rewarding life.

Our Future and Sustainability This year we put great effort into the review of options for the physical form of our proposed new facilities, but the process has demanded review and clarification of our wider outlook and principals. We have sought advice on this from outside sources regarding factors defining our project briefing, as well as executive performance goals, and at the same time we have pursued on-going clarification and development of governance procedures, our business strategies and the methodologies we adopt to further our

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long term vision. Examples of this process have been seen this year in the strategic planning work overseen by Mike Hadfield, the concise exposition of The Rosewood Way developed by Barbara Horner, and the detailed and extensive work

by Fiona Barclay to provide the new Directors’ governance guidelines.

A major process framing our changing organisation will be the new constitution that has been presented to members for consideration today.

With advice from Paul Donovan at MDS, we have responded to new requirements legislated under the Associations Incorporation Act 2015. This demands development of our constitutional rules from the simple framework that has supported us to date, to a framework that complies with that law, but which can also meet the needs of a

Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

President’s Report 2015–2016

contemporary organisation that can thrive in the complex environment that we now face. It has been said that what we leave behind is a framework well suited to a small sporting club; what we need for the future is support for an active and commercially wary corporation. We must underpin our vision for delivery of effective charitable services with the scale and protection of an asset base that meets the demanding competitive environment of the aged care industry.

The board has had excellent advice, and has combined the basic requirements to meet the legislation with consideration of how we can effectively manage an organisation that will be inclusive of its membership, promote effective governance by future boards, supported and guided by skilled executives to meet the environments that will be faced in the future.

In due course today we will pursue the procedure required to consider the proposed changes. We welcome your comments and look forward to responding to those, and I strongly commend your support of the new constitution.

Our immediate outlook is that as we grow in the near future we need to put in place systems and methodologies that continue to provide the quality of experience that has characterised our success at the scale we operate at now. These must project over a range of operations that will at first double our size after Leederville opens with 120 beds, and then more than double that again when we bring another 150 beds on line here at West Perth.

With the skills and experience of our Board, our executive and advisors, and among our members, we believe we can maintain this vision. Our strongest prospect for future sustainability will be our delivery of a credible vision for care that leads the expectations of our industry.

Our vision continues to be the effective delivery of the best possible care for the aged, and Rosewood is well placed in the future to do that.

The Care Environment It is efficient for governments to support fewer, larger players and we must respond with agility to sustain our position. Rosewood is not currently placed to answer future demand with a large broad based mass market service, nor is there room in a future competitive framework hoping for a middle ground generalised offer. It makes strong sense to build on our past identity and successes with an innovative response as a well considered and agile organisation that defines and answers elderly care needs quickly and effectively with a genuine compassion for our cause.

Aged Care Sector government policy is balancing acute wariness of the growth in the cost of care against community expectations for quality of care for our elderly population by driving the acceptance of a shift towards a “user pays” framework. The taxation that baby boomers contributed to their parents’ care will not be supported by future generations to provide service to an increased aged population by a decreased tax paying population. Expected deregulation that will support the shift from aged care as a social service right into a service opportunity has seen the strong entry of public companies into our sphere, with their facility acquisition phase strongly underway across Australia. The very low returns on investment that have characterised the industry to date cannot credibly support those entrants, and we can look forward to considerable change in the ways that care accommodation will be funded and valued in future.

The task of providing for those whose lack of assets slips them through the widening gaps in the social safety net will become more challenging over the lifetime of the facilities we are building and planning now. At the same time, our community’s expectation for the quality of our offer, and for a range of choices in the developing consumer directed care environment we face drives us to

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President’s Report 2015–2016

consider more sophisticated solutions for the range we offer for those places and services.

There is a sense currently promoted by pundits that aged care providers need to be constrained, to be prevented from rorting the subsidy system.

Generally we see little evidence of this but the year has been characterised by our need to actively meet challenges to justify our claims for payment and our compliance with regulation.

We have met well with an unannounced visit by the department, and we have responded robustly to proposed tightening of ACFI income this year.

We have been particularly challenged recently by demands from the Department of Aging to justify that expenditure that we made in acquiring our property at 200 Scarborough Beach Rd meets prudential policy requirements. Rosewood purchased that property because it fits well with our needs for interim accommodation during the construction of the West Perth facility, and it balanced our holdings of cash assets with an excellent property asset. The board had a clear understanding at the time we made the decision to acquire that property that it would make a strong contribution to our future provision for aged accommodation. However subsequent to the closure of our accounts for the year, we have had a considerable task to receive confirmation that Commonwealth authorities accept that we clearly complied with current regulations. This process involved consideration of complex procedure with expert advice to support a position that we are, and always have been, managing our own funds that are quite distinct from the bond monies we are committed to managing under prudential guidelines. And further, that investment in that property represents a prudent and reasonable application of our funds.

By now, the Department has acknowledged we acted reasonably. The consequences may well

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have been very significant for us if threatened sanctions could have been applied, and our ongoing position with project finance could have been compromised. It is a truism to complain about government red tape; we must certainly accept that Government’s role is to confirm that standards are properly met, but response to the policy as it develops in increasing complexity remains expensively time consuming, and we continue to value expert assistance in answering such challenges.

We continue to be respected as an operator, both in our immediate community of residents and their families and friends, as well as a creditable voice within our peak body LASA to transmit our views and needs to policy makers.

Our CEO works within that representative group to voice Rosewood’s views so that our position as an effective NFP provider delivering secular charitable care can be measured against the views provided by other identities in the sector.

Governance We greatly appreciate the contributions made by our membership, in particular their support individually and collectively in helping us to develop our vision for our care.

This year we saw two board members retire.

Unfortunately Rose Marie McNamara has been unable to continue working with us, and we will miss insights from her strong background in executive roles in the Aged Care Sector. We wish her all the best with her future travels and with her family. Keith Black was also unable to give us more of his valuable time in a busy professional life and the challenging phase of the wider consulting world. Keith was able to give us very succinct and excellent insights into governance and organisational development issues; our outlook has been enriched by his contributions.

Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

President’s Report 2015–2016

There are however new faces that we hope will be voted onto the board. Carol Bain has met us with strong recommendations from her long experience in the aged care sector, working in successful executive roles with respected providers such as Silver Chain and the Mercy Care group. We certainly expect that she can contribute excellent insights and forthright views for our future vision. Jon Bilson brings significant experience guiding the development of corporate culture and change management for major corporations here in Western Australia at a time when Rosewood is at its greatest phase of growth and review. We believe that Jon’s skills are well suited to our task to define and develop our group’s culture, and look forward also to his appointment to the board.

needs and I thank each board member for their time and energies. I am confident that they will guide us successfully into the future.

Your board has a wide range of talents, skills and experience serving Rosewood’s contemporary

Alan Ross President

Rosewood’s executive and staff continue to bring energy and application to all aspects of our operations and I look forward to the opportunities that the coming phase will present and their continuing success. I thank all of the staff and executive for their efforts and commitment.

Most especially I thank all our members for their support to continue Rosewood’s work and look forward to working with you all over the coming year.

Thank you.

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Chief Executive Officer’s Report 2015–2016

C hie f E x ec u t iv e Of f ic e r ’s R e p ort The end of an era, or unsustainable illusion?

There are those who believe that the Government is on a crusade to reduce the number of aged care operators in Australia. By undertaking this calculated and arguably risky policy approach those same conspiracy practitioners believe the government will happily only have to deal with a couple of dozen providers.

On the face of it, their pronouncements seem plausible. They take the argument further. They claim that the “road map for aged care “released last year sets the direction and destination for this journey. In spite of the bumpy stretches currently being experienced the road to total deregulation is just over the horizon. Supporting this view is the extraordinary procurement of aged care facilities or even groups by major listed companies backed by equity and even superannuation funds.

Additionally, the user-pays system is now a reality.

Consumer directed care is firmly entrenched in the aged care lexicon and words like competition, productivity, alternative business models and market forces are in common use. This is the way of the future, so say the true believers.

The only problem is that these peddlers of the new faith are not doing the thinking, or the planning, they just simply believe.

If this was the intention then the Government is not overtly playing the game. Unless of course one takes the view that by making it so uncomfortable and so financially unstable smaller operators will just sell up to the big boys and then all will return to normal… aged care utopia. But how long will this all take, and will shareholders be willing to see the value of their shares head south as they wait for this so-called outcome? I don’t think so.

Just a few examples should suffice to demonstrate that the Government is not in on the plan: • Red tape is not lessening. In fact in some areas it is being reinforced. The bureaucracy is digging in and not going without a fight.

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• The Minister openly stated that most Providers are less than trustful and there needs to be more measures put in place to ensure compliance. So more red tape.

• Funding for resident care has been reduced for the third time in three years. Since the 2013 reforms the Government has removed the following funding streams: 1. The pre-entry leave arrangements withdrawn 2. The retentions on accommodation payments ceased 3. Dementia supplement halved 4. Payroll tax supplement removed.

• More emphasis on making providers pay for their own validations.

• Government Policy decisions continue to be made unilaterally The question is, if the era has gone, and unsustainability becomes a reality, how long before the vortex of disaster becomes steeper and faster?

Rosewood West Perth For a number of reasons the current operation has struggled to remain in surplus. Occupancy is the most critical fundamental of sustainability.

This becomes even more critical in a low bed number stand alone aging facility having to cope with higher levels of morbidity. The majority of the deficit is due to costs associated with implementing a more effective funding assessment and practice model, and the natural fallout of staff increases to meet the higher needs of residents.

Regardless of physical impediments the quality of care remains the facility’s most respected and recognised feature. Families continue to sing high praise for the staff and their attention to their loved ones. There can be no greater element than this to enhance the reputation of Rosewood.

Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

Chief Executive Officer’s Report 2015–2016

West Perth Redevelopment

Rosewood Leederville

Once the residents and staff leave for the new Leederville Facility in August 2017, over sixty years of care and services to the community at Cleaver Street will come to an end for only a short time. The current single level Legotype buildings will be replaced by a six level development incorporating 152 bed aged care facility, a community medical centre, a café and a day therapy centre. The building will be wrapped around the heritage listed cottage which will become part of the facility’s administration centre.

After a year of frustration, work on the basement re-commenced in April 2015 and finished in November the same year. Most of that time was spent unraveling bundles of red tape in the pursuit of new permits and approvals to start work again. The local authority became involved again as some of the neighbours became reenergised in their objection to the development. Some thought that the delay would result in a capitulation and consequently Rosewood would develop the site as a dog exercise destination.

The project team will be ready to lodge for a Development Application on the 18th November 2016. During the three month statutory assessment period (March 2017) Rosewood expects to meet the usual community backlash given the bulk and size of the building. The underlying principal was to ensure the development complied with all the codes and that an absolute minimum dispensation was sought for the retention of the cottage. This has been achieved.

The development programme shows demolition taking place in April 2018 with a twenty seven month construction period commencing July/August 2018.

Once out of the ground major works commenced almost immediately -20th November 2015. Since that day and in spite of a rather unfriendly winter the builder has maintained a steady pace. Lock up is scheduled for the 12th December 2016 with practical completion 11th May 2017.

Next years AGM will be the last for a number of years at Cleaver Street. From August 2017 the only occupants will be the Executive occupying the heritage cottage. Subsequent AGMs will be at the Leederville Facility.

Everyone from the Board to the Executive to the Care Staff is aware of the tasks facing the organisation in 2017. We are well prepared, and looking forward to the challenge.

Mario Zulberti Chief Executive Officer

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Treasurer’s Report 2015–2016

Trea sur er’s R eport Financial Performance Rosewood has had a challenging year from a finance perspective as the organisation prepares for the re-opening of the new Leederville facility whilst still managing the aging facilities at West Perth. Revenue for the year was $4.084m (2015: $5.164m) and expenditure was $4.385m (2015: $3.946m) to record a loss for the financial year of $0.301m (2014: profit of $1.218m). Revenue included $1.030m in fees from residents and $2.468 in subsidies received from the Government.

Expenditure included $0.241 in interest and finance charges on borrowings associated with the redevelopment of the Leederville and West Perth facilities.

Additional costs have also been incurred in salaries and wages as the level of acuity in residents has increased during the year. This should be offset by higher subsidies received from the government during the 2016/17 financial year.

Funding The Department of Social Services has granted Rosewood a Zero Real Interest Loan (ZRIL) for $8.5 million for the development of Leederville and a further $14.4 million for the redevelopment of West Perth. At 30 June Rosewood had drawn

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down $6.375m (2015:$6.375m) for Leederville and $3.6m (2015: $3.6m) for West Perth. The remaining $2.125m for Leederville and $10.8m for West Perth will be received as milestones in the building contracts are met. Repayments of interest on the Leederville loan commenced in January 2013, and Principal repayments commenced in January 2015. Repayments of interest for the West Perth loan commenced in July 2014 and principal repayments commenced in June 2016.

Rosewood also has a Construction Loan for $32.5m for the Leederville construction of which $6.733m has been drawn down as at June 2016.

Audit 2016 Auditors Grant Thornton has undertaken the financial audit for 2016.

The audit has been completed and issued as an “unqualified audit opinion.”

The Statement by the Board accompanying the audit has been signed by both the Chairman of the Board and the Treasurer.

Michael Hadfield Treasurer

Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

Treasurer’s Report 2015–2016

What we earned

What we spent

What we own

What we owe

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Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

ABN 47 687 603 507

ANNUAL REPORT 2015-2016

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Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

Independent Auditor’s Report

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Statement by Members of the Board

18

Statement of Profit or Loss and Other Comprehensive Income

19

Statement of Financial Position

20

Statement of Changes in Equity

21

Statement of Cash Flows

22

Notes to the Financial Statements

23

Statement of Income and Expenditure

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Level 1 10 Kings Park Road Level 1 West Perth WA 6005 10 Kings Park Road West Perth WA 6005 Correspondence to: PO Box 570 Correspondence to: West Perth WA 6872 PO Box 570 West WA 6872 T +61Perth 8 9480 2000

Independent Auditor’s Report To the Members of Rosewood Independent Auditor’s Report Care Group (Inc.) To the Members of Rosewood Care Group (Inc.)

F +61 8 9322 7787 T 8 9480 2000 E +61 info.wa@au.gt.com F +61 8 9322 7787 W www.grantthornton.com.au E info.wa@au.gt.com W www.grantthornton.com.au

We have audited the accompanying financial report of Rosewood Care Group (Inc.) (the ‘Association’), which comprises the statement of financial positionCare as atGroup 30 June(Inc.) 2016,(the and We have audited the accompanying financial report of Rosewood the statement of profitcomprises or loss and comprehensive of changes in ‘Association’), which theother statement of financialincome, positionstatement as at 30 June 2016, and equity and statement of cash flows for the year then ended, notes comprising a summary the statement of profit or loss and other comprehensive income, statement of changes in of significant and other information the financial report and equity and accounting statement ofpolicies cash flows for theexplanatory year then ended, notes to comprising a summary of the statement by the Members of the Board. significant accounting policies and other explanatory information to the financial report and the statement by the Members of the Board.

Responsibility of the Members of the Board for the financial report

The Members of the Board of the Association are responsible for the preparation Responsibility of the Members of the Board for the financial report and fair presentation report in accordance Australian Standards – The Membersofofthe thefinancial Board of the Association arewith responsible for Accounting the preparation and fair Reduced Disclosure Requirements, the Australian Charities and Not-for-profits presentation of the financial report in accordance with Australian Accounting Standards – Commission Act 2012 and the Associations Incorporations Act Not-for-profits 1987 (WA). This Reduced Disclosure Requirements, the Australian Charities and responsibility includes internal controlsIncorporations as the MembersAct of 1987 the Board are Commission Act 2012 such and the Associations (WA).determines This necessary to enable thesuch preparation the financial report to be from material responsibility includes internal of controls as the Members of free the Board determines are misstatement, whether to fraud of or the error. necessary to enable the due preparation financial report to be 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 Auditor’s responsibility conducted our audit with Australian Auditingreport Standards require to Our responsibility is in to accordance express an opinion on the financial basedwhich on our audit.us We comply with relevant requirements relating to audit engagements and plan andus to conducted our audit inethical accordance with Australian Auditing Standards which require perform the audit to obtain reasonable assurance whether the financial report is free comply with relevant ethical requirements relating to audit engagements and plan andfrom material misstatement. 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 dependabout on thethe auditor’s An audit involves performing procedures to obtainselected audit evidence amounts and judgement, including the assessment ofprocedures the risks ofselected materialdepend misstatement the financial disclosures in the financial report. The on the of auditor’s report, whether due to fraud or error. judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 Grant Thornton Audit Pty Ltd ACN 130 913 594 Thornton’ refers the brand under whichof theGrant Grant Thornton member firms provide assurance, tax and to their clients and/or refers to one or more member firms, as the a‘Grant subsidiary ortorelated entity Thornton Australia Ltd ABN 41advisory 127 services 556 389

context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. delivered member firms.member GTIL does provide services to GTIL and its member are and/or not agents obligate onefirms, another and ‘Grant Thornton’ refers to Services the brandare under which by thethe Grant Thornton firmsnot provide assurance, taxclients. and advisory services to theirfirms clients refersof,toand onedo ornot more member as the are not liable for one another’s acts or omissions. the Australian context only, theInternational use of the term ‘Grant Thornton’ refer to Grant Thornton Australia Limited ABN 41 127and 556each 389 member and its firm context requires.

Grant Thornton Australia Ltd is aInmember firm of Grant Thornton Ltd (GTIL).

GTIL and may the member firms are not a worldwide partnership.

GTIL Australian subsidiaries andServices related are entities.

GTILby is not Australian entitynot to Grant Thornton Limited. is a separate legal entity. delivered the an member firms.related GTIL does provide servicesAustralia to clients.

GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its

Liability limited by scheme Professional Australian subsidiaries andarelated entities.approved GTIL is not anunder Australian related entity to Standards Grant Thornton Legislation.

Australia Limited.Liability is limited in those States where a current scheme applies.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

In making those risk assessments, the auditor considers internal control relevant to the Association’s preparation and fair presentation of the financial report 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 Association’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the members, 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.

Independence

In conducting our audit, we have complied with the applicable independence requirements of the Accounting Professional and Ethical Standards Board and the Australian Charities and Not-for-profits Regulation 2013.

Auditor’s Opinion

In our opinion, the financial report of Rosewood Care Group Inc. i

presents fairly, in all material respects, the Association’s financial position as at 30 June 2016 and of its performance and cash flows for the year then ended ; and

ii

complies with Australian Accounting Standards - Reduced Disclosure Requirements and the relevant legislation including the Resident Care Subsidy Amendment Principles pursuant to the Aged Care Act 1997 (WA), the Associations Incorporations Act 1987 (WA), and the Australian Charities and Not-for-profits Commission Act 2012.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

C A Becker Partner - Audit & Assurance Perth, 28 October 2016

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Rosewood Care Group Inc. Financial Rosewood Report Care forGroup the Inc. Year Ended 30 June 2016 Financial Report for the Year Ended 30 June 2016

3

Statement by Members of the Board

In the opinion of the Board the financial report as set out on pages 4 to 19: 1.

Presents a true and fair view of the financial position of Rosewood Care Group Inc. as at 30 June 2016 and its performance for the year ended on that date in accordance with Australian Accounting Standards, other mandatory pronouncements of the Australian Accounting Standards Board and the Australian Charities and NotFor-Profits Commission Act 2012.

2.

At the date of this statement, there are reasonable grounds to believe that Rosewood Care Group Inc. will be able to pay its debts as and when they fall due.

This statement is made in accordance with a resolution of the Board and is signed for and on behalf of the Board by:

President

Treasurer

Dated this 28th day of October 2016

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Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

Rosewood Care Group Inc.

Rosewood Care Group Inc. 4 Financial Report for the Year Ended 30 June 2016 Financial Report for the Year Ended 30 June 2016

Statement of Profit or Loss and Other Comprehensive income For the year ended 30 June 2016 Note

2016

2015 $

4,084,112

5,164,355

(2,743,744)

(2,425,619)

(297,245)

(284,342)

(180,298)

(178,628)

(97,086)

(94,808)

Occupancy Costs

(237,310)

(224,002)

Repairs and Maintenance

(121,812)

(172,879)

Finance Cost

(144,313)

(228,295)

Other Expenditure

(563,095)

(337,885)

Surplus/ (Deficit) before Income Tax

(300,791)

1,217,897

Revenue From Operations

2

Employee Benefits Expense Depreciation Expense

3

Food and Meals Insurance

Income Tax Expense Net Surplus/ (Deficit) after income tax

-

-

(300,791)

1,217,897

Other CoComprehensive Income/ (Loss), net of tax Asset Revaluation Total Comprehensive Income/ (Loss) for the year

-

7,811,627

(300,791)

9,029,524

The accompanying notes form part of these financial statements.

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Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Rosewood Care Group Inc. Rosewood Care Inc. 30 June 2016 Financial Report for theGroup Year Ended Financial Report for the Year Ended 30 June 2016

5

Statement of Financial Position Statement of Financial Position As at 30 June 2016 As at 30 June 2016 Current Assets Current Assets Cash and Cash Equivalents Cash andReceivables Cash Equivalents Trade and Other Trade and Other Receivables

Note 4 5

Note 4 5

Total Current Assets Total Current Assets Non-Current Assets Non-Current Assets Property, Plant & Equipment Property, Plant & Equipment

2016

2015 $

2015 $

5,580,694 8,066,457 5,580,694 453,886 8,066,457 615,681 615,681 453,886 6,196,375 8,520,343 6,196,375 8,520,343

6

6

43,119,890 31,053,640 43,119,890 31,053,640

Total Non-Current Assets Total Non-Current Assets

43,119,890 31,053,640 43,119,890 31,053,640

Total Assets Total Assets

49,316,265 39,573,983 49,316,265 39,573,983

Current Liabilities Current Trade and OtherLiabilities Payables Trade and Other Payables Provisions Provisions Borrowings Borrowings Accommodation Bonds Accommodation Bonds

7 8 9

7 8 9

Total Current Liabilities Total Current Liabilities Non-Current Liabilities Non-Current Liabilities Borrowings Borrowings Long Service Leave Long Service Leave

2,294,451 694,744 2,294,451 118,198694,744 166,712 1,479,340166,712 477,984118,198 1,479,340 9,095,560477,984 10,773,929 10,773,929 9,095,560 14,714,432 10,386,486 14,714,432 10,386,486

9 8

9 8

13,700,844 7,995,597 13,700,844 7,995,597 68,683 58,803 68,683 58,803

Total Non-Current Liabilities Total Non-Current Liabilities

13,769,527 8,054,400 13,769,527 8,054,400

Total Liabilities Total Liabilities

28,483,959 18,440,886 28,483,959 18,440,886

Net Assets Net Assets

20,832,306 21,133,097 20,832,306 21,133,097

Equity EquityFunds Accumulated Accumulated Funds Asset Revaluation Reserve Asset Revaluation Reserve

6,820,679 7,121,470 6,820,67914,011,627 7,121,470 14,011,627 14,011,627 14,011,627

Total Equity Total Equity

20,832,306 21,133,097 20,832,306 21,133,097

The accompanying notes form part of these financial statements.

The accompanying notes form part of these financial statements.

20

2016

Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

5

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

6 6

Statement of Changes in Equity Statement of Changes in Equity For the year ended 30 June 2016 For the year ended 30 June 2016 Accumulated Accumulated

Asset Revaluation

Funds Asset Revaluation Reserve

Funds

$

Reserve

$ Balance at 1 July 2015

7,121,470

$

$

14,011,627

21,133,097

7,121,470(300,791) 14,011,627

Total Comprehensive Loss Balance at 30 June 2016

(300,791)6,820,679

Balance at 30 June 2016

6,820,679

- 21,133,097(300,791)

14,011,627 14,011,627

5,903,573

Total

$

Balance at 1 July 2015 Total Comprehensive Loss

Balance at 1 July 2014

$

Total

6,200,000

(300,791) 20,832,306 20,832,306

12,103,573

Balance at 1 July 2014 Total Comprehensive Income

5,903,5731,217,897

6,200,0007,811,627 12,103,5739,029,524

Total Comprehensive Income Balance at 30 June 2015

1,217,8977,121,470

7,811,627 14,011,627

Balance at 30 June 2015

7,121,470

14,011,627

9,029,524 21,133,097 21,133,097

The accompanying notes form part of these financial statements.

The accompanying notes form part of these financial statements.

A NNU A L R E PO R T 2015-2016 | Rosewood Care Group Inc.

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Rosewood Care Group Inc. Financial Rosewood Report Care for Group the Year Ended 30 June 2016 Inc.

7

Financial Report for the Year Ended 30 June 2016

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

7

Statement of Cash Flows Statement of Cash Flows For the year ended 30 June 2016 For the year ended 30 June 2016 Note Cash Flows from Operating Activities Receipts from residents and customers Operating grant and subsidy receipts Cash Flows from Operating Activities Donations received Receipts from residents and customers Interest received Operating grant and subsidy receipts Payments to suppliers and employees Donations received Interest received Net Cash Provided By (Used In) Operating Activities Payments to suppliers and employees

2016 Note

11(b)

Cash Flows from Investing Activities Net Cash Provided By (Used In) Operating Activities Fixed asset purchases Proceeds on sale of fixed assets Cash Flows from Investing Activities Fixed asset purchases Net Cash (Used In) Investing Activities Proceeds on sale of fixed assets

11(b)

2016 2015 1,242,049 1,273,056 $ 2,468,431 2,173,131 16,614 20,809 1,242,049 1,273,056 321,628 282,892 2,468,431 2,173,131 (4,105,289) (3,390,165) 16,614 20,809 321,628 282,892 (56,567) 359,723 (4,105,289) (3,390,165) (10,774,295) 12,727

(56,567) 359,723 (5,531,585) 50,500

(10,774,295) (5,531,585) (10,761,568) (5,481,085) 12,727 50,500

Cash Flows from Financing Activities Net Cash (Used In) Investing Activities Proceeds from accommodation bonds Repayment of accommodation bonds Cash Flows from Financing Activities Loan funds received Proceeds from accommodation bonds Loan Principal Repaid Repayment of accommodation bonds Loan funds received Net Cash Provided by Financing Activities Loan Principal Repaid

(10,761,568) (5,481,085) 3,482,200 2,300,000 (1,748,138) (1,392,419) 7,083,310 3,482,200 2,300,000 (485,000) (212,500) (1,748,138) (1,392,419) 7,083,310 8,332,372 695,081 (485,000) (212,500)

Net Increase (Decrease) in Cash and Cash Equivalents Net Cash Provided by Financing Activities

(2,485,763) (4,426,281) 8,332,372 695,081

Cash and Cash Equivalents at the beginning of the financial year Net Increase (Decrease) in Cash and Cash Equivalents

8,066,457 12,492,738 (2,485,763) (4,426,281)

Cash and Cash Equivalents at the end of the financial year 11(a) Cash and Cash Equivalents at the beginning of the financial year

5,580,694 8,066,457 8,066,457 12,492,738

Cash and Cash Equivalents at the end of the financial year

11(a)

5,580,694

The accompanying notes form part of these financial statements.

22

2015 $

The accompanying notes form part of these financial statements.

Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

8,066,457

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

8

Notes to the financial statements For the year ended 30 June 2016 Note 1: Summary of Significant Accounting Policies This financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations – Reduced Disclosure Requirements, other authoritative pronouncements of the Australian Accounting Standards Board and the requirements of the Association’s Constitution, the Aged Care Act 1997 and the Australian Charities and Not-For-Profits Commission Act 2012.

The financial report covers the Rosewood Care Group Inc. as an individual not-for-profit entity. Rosewood Care Group Inc. is an Association incorporated in Western Australia under the Associations Incorporation Act 1987.

This financial report has been prepared on an accruals basis and is based on historical costs as modified by the revaluation of selected non current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

The following is a summary of material accounting policies adopted by the Association in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(a)

Income Tax

The Association is exempt from income tax under Section 50-5, item 1.1 of the Income Tax Assessment Act 1997. The Association is recognised as a Public Benevolent Institution by the Australian Taxation Office.

(b)

Property, Plant and Equipment

Each class of property, plant and equipment, with the exception of Land and buildings, are measured at historical cost less, where applicable, any accumulated depreciation.

Historical cost includes all expenditure that is directly

attributable to the acquisition of the item. Land and buildings are valued as per a valuation provided by M3 Property 2014.

Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Association and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred.

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23

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

9

Notes to the financial statements for the year ended 30 June 2016 Note 1: Summary of Significant Accounting Policies (Cont’d) (c)

Deprecation Land is not depreciated. Depreciation on other assets is calculated using the diminishing value method over the useful lives of the assets to the association commencing at the time the asset is held ready for use.

Leasehold improvements are amortised over the shorter of either the unexpired period of the lease or the estimated useful live of the improvements.

The deprecation rates used for each class of depreciable asset are: Class of Fixed Asset Leasehold Improvements Buildings Motor Vehicles Plant & Equipment Furniture & Fittings

(d)

Deprecation Rate 2% 2% 22.5% 10 – 40 % 10 – 20 %

Impairment of Non-Current Assets At each reporting date, the association reviews the carrying values of its non-current tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the profit or loss.

(e)

Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts. Trade receivables are due for settlement no more than 30 days from the date of recognition. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence that the Association will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The amount of the provision is recognised in the profit or loss.

(f)

Employee Benefits Provision is made for liability for employee benefits arising from services rendered by employees to reporting date. Employee benefits expected to be settled within one year together with benefits arising from wages and salaries and annual leave which will be settled after one year have been measured at their nominal amount.

Contributions are made by the association to employee superannuation funds and are charged as expense when incurred.

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Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

10

Notes to the financial statements for the year ended 30 June 2016 Note 1: Summary of Significant Accounting Policies (Cont’d) (g)

Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at-call with banks, other short term highly liquid investments with original maturities of six months or less, and bank overdrafts.

Bank

overdrafts are shown within borrowings in current liabilities on the statement of financial position.

(h)

Revenue Recognition Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent that it is probable that the economic benefits will flow to Rosewood Care Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Revenues from Aged Care Revenues from daily care fees from residents and personal care subsidies received from the Government is recognised when received or when services are provided, depending on accommodation type and level of care required.

An annual retention fee is charged to pre 1 July 2014 residents with bonds less than $500K. These annual fees are regulated by the Federal Government and are paid by a resident on departure. These fees are accrued during the resident’s period of occupancy.

Other government grants and subsidies are recognised as revenue when received.

All revenue is stated net of the amount of goods and services tax (GST).

(i)

Trade and other payables These amounts represent liabilities for goods and services provided to the Association prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(j)

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 Tax Office. In these circumstances the GST is recognised as part of the cost of the acquisition of the asset or as part of an item of the expense.

Receivables and payables in the statement of financial position are shown inclusive of GST.

(k)

Comparative Figures Where required, comparative figures have been adjusted to conform with changes in presentation for the current financial year.

A NNU A L R E PO R T 2015-2016 | Rosewood Care Group Inc.

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Rosewood Care Group Inc. Financial Rosewood Report Care forGroup the Inc. Year Ended 30 June 2016 Rosewood Care Group Inc. Rosewood Care Group Financial Report Report for the theInc. Year Ended Ended 30 30 June June 2016 2016 Rosewood Care Inc. Financial for Year Rosewood Care Group Group Inc. Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Financial Report for the Year Ended 30 June Rosewood Care Group Inc. Financial Report Report for the theInc. Year Ended Ended 30 30 June June 2016 2016 Rosewood Care Group Financial for Year 2016 Rosewood Care Group Inc. Rosewood Care Group Financial Report Report for the theInc. Year Ended Ended 30 30 June June 2016 2016 Financial for Year Financial Report for the Year Ended 30 June Financial Report for the Year Ended 30 June 2016 2016

Notes to Notes to the the financial financial statements statements for for the the year year ended ended 30 30 June June Notes Notes to to the the financial financial statements statements for for the the year year ended ended 30 30 June June Notes to the financial statements for the year ended 30 June Notes to the financial statements for the year ended 30 Notes to the financial statements for the year ended 30 June June Notes to the financial statements for the year ended 30 June Note 1: Summary of Significant Accounting Policies (Cont’d) Notes to the financial statements for the year ended 30 June Note 1: Summary of Significant Accounting Policies (Cont’d) Notes to the financial statements for the year ended 30 June Notes to the financial statements for the year ended 30 June Note 1: 1: Summary Summary of of Significant Significant Accounting Accounting Policies Policies (Cont’d) (Cont’d) Note Note 1: Summary of Significant Accounting Policies (Cont’d) Note 1: Summary of Significant Accounting Policies (Cont’d) Note 1: Summary of Significant Accounting Policies (Cont’d) Note Note 1: 1: Summary Summary of of Significant Significant Accounting Accounting Policies Policies (Cont’d) (Cont’d) Note Summary Significant Accounting Policies (Cont’d) (l) Refundable Accommodation Deposits (RADs) Note 1: 1:Accommodation Summary of ofBonds/ Significant Accounting Policies (l) Accommodation Bonds/ Refundable Accommodation Deposits (Cont’d) (RADs) (l) (l) (l) (l) (l) (l) (l) (l) (l)

26

11 11 11 11 11 11 11 11 11 11 11

2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016

Accommodation Bonds/ Refundable Accommodation Deposits (RADs) Accommodation Bonds/ Refundable Accommodation Deposits (RADs) Accommodation Bonds/ Refundable Accommodation Deposits (RADs) Accommodation RADs are at amount less Accommodation Bonds/ Refundable Accommodation Deposits Accommodation bonds/ bonds/ RADs are measured measured at the the principal principal amount(RADs) less retention retention amounts. amounts.

Accommodation Bonds/ Refundable Accommodation Deposits Accommodation bonds/ bonds/ RADs are measured measured at the the principal principal amount(RADs) less retention retention amounts. amounts.

Accommodation RADs are at amount less Accommodation Bonds/ Refundable Accommodation Deposits (RADs) Accommodation bonds/ RADs are measured at the principal amount less Accommodation Bonds/ Refundable Accommodation Deposits (RADs) Accommodation bonds/ bonds/ RADs are measured measured at the the principal principal amount(RADs) less retention retention amounts. amounts.

Accommodation Bonds/ Refundable Accommodation Deposits (RADs) Accommodation RADs are at amount less retention amounts.

Accommodation Bonds/ Refundable Accommodation Deposits Accommodation bonds/ RADs are measured at principal amount less retention amounts. bonds/ RADs are measured at the the principal amount less retention amounts.

Accommodation bonds/ RADs are non interest bearing liabilities and the net amount due Accommodation bonds/ RADs are measured at the principal amount less retention amounts.

Accommodation bonds/ bonds/ RADs RADs are aremeasured non interest bearing liabilities and theretention net amount due is is repayable repayable on on at the principal amount less amounts.

Accommodation bonds/ bonds/ RADs RADs are are non non interest interest bearing liabilities and the net net amount amount due is is repayable repayable on on Accommodation bearing liabilities and the due Accommodation bonds/ RADs are non interest bearing liabilities and the net amount due is repayable on demand.

The fair value of accommodation deposits is not less than the amount payable on demand.

Accommodation bonds/ RADs are non interest bearing liabilities and the net amount due is repayable demand.

The fair value of accommodation deposits is not less than the amount payable on demand.

Accommodation bonds/ RADs are non interest bearing liabilities and the net amount due is repayable on on demand.

The fair value of accommodation deposits is not less than the amount payable on demand. demand.

The fair value of accommodation deposits is not less than the amount payable on demand.

Accommodation bonds/ RADs are non interest bearing liabilities and the net amount due is repayable demand.

The fair fairbonds/ value of of accommodation deposits is not notliabilities less than thanand thethe amount payabledue on demand. demand.

Accommodation bonds/ RADs are non non interest bearing liabilities and the net amount amount due is repayable repayable on on demand.

The value accommodation deposits is less the amount payable on Accommodation RADs are bearing net is on demand.

The fairbonds/ value of accommodation deposits is notliabilities less thanand thethe amount payabledue on demand.

Accommodation RADs are non interest interest bearing net amount is repayable on demand.

The fair value of accommodation deposits is not not less than than the amount amount payable on ondoes demand. demand.

The fair value of accommodation deposits is less the payable demand.

Accommodation bonds/ RADs are classified as current liabilities because the Association not have demand. The The fair fairbonds/ value of of accommodation is less the payable demand.

Accommodation RADs are classifieddeposits as current liabilities because the Association not have an an demand. value accommodation deposits is not not less than than the amount amount payable on ondoes demand.

Accommodation bonds/ RADs are classified as current liabilities because the Association does not have an Accommodation bonds/ RADs are classified as current liabilities because the Association does not an Accommodation bonds/ RADs are classified classified asperiod current liabilities because the Association does not have have an unconditional right to defer settlements for a greater than twelve months.

History shows that, on Accommodation bonds/ RADs are as current liabilities because the Association does not have an unconditional right to defer settlements for aasperiod greater than twelve the months.

History shows that, on Accommodation bonds/ RADs are classified current liabilities because Association does not have an unconditional right to defer settlements for a period greater than twelve months.

History shows that, on unconditional right to defer settlements for a period greater than twelve months.

History shows that, on Accommodation bonds/ RADs are classified as current liabilities because the Association does not have an unconditional right to defer settlements for a period greater than twelve months.

History shows that, on Accommodation bonds/ RADs are classified as current liabilities because the Association does not have an average, a a resident resident indefer an aged care facility will stay greater 3liabilities years.than The Association refunded accommodation unconditional right to settlements for a period twelve months.

History shows that, on Accommodation bonds/ RADs are classified as current because the Association does not have an average, in an aged care facility will stay 3 years.

The Association refunded accommodation unconditional right toindefer settlements for aas period greater than twelve months.

History shows that, on Accommodation bonds/ RADs are classified current liabilities because the Association does not have an average, a resident an aged care facility will stay 3 years.

The Association refunded accommodation average, a resident in an aged care facility will stay 3 years.

The Association refunded accommodation unconditional right to defer settlements for a period greater than twelve months.

History shows that, on average, a in an care stay 3 years.

The Association refunded accommodation unconditional righttoto defer settlements for a period greater than twelve months.

History shows that, on bonds amounting during the (2015: which was funded by reserves average, a resident resident indefer an aged aged care facility facility will stay greater 3$1,392,419) years.than The Association refunded accommodation unconditional right to$1,748,138 defer settlements foryear awill period greater than twelve months.

History shows that,and on bonds amounting toto $1,748,138 during the year (2015: $1,392,419) which was funded by cash cash reserves and average, a resident in an aged care facility will stay 3 years.

The Association refunded accommodation unconditional right settlements for a period twelve months.

History shows that, on bonds amounting to $1,748,138 during the year (2015: $1,392,419) which was funded by cash reserves and average, a resident in an aged care facility will stay 3 years.

The Association refunded accommodation bonds amounting to $1,748,138 during the year (2015: $1,392,419) which was funded by cash reserves and average, a resident in an aged care facility will stay 3 years.

The Association refunded accommodation bonds amounting to $1,748,138 during the year (2015: $1,392,419) which was funded by cash reserves and contributions from to incoming residents. average, a resident in an aged care facility will stay 3 years.

The Association refunded accommodation bonds amounting $1,748,138 during the year (2015: $1,392,419) which was funded by cash reserves and contributions from incoming residents. average, a resident in an aged care facility will(2015: stay 3$1,392,419) years. Thewhich Association refunded accommodation bonds amounting to $1,748,138 during the year was funded by cash reserves and contributions from to incoming residents. contributions from incoming residents. bonds $1,748,138 during the year (2015: $1,392,419) contributions from incoming residents. bonds amounting amounting $1,748,138 during the the year year (2015: (2015: $1,392,419) $1,392,419) which which was was funded funded by by cash cash reserves reserves and and contributions from to incoming residents. bonds to $1,748,138 during contributions from incoming residents. bonds amounting amounting to $1,748,138 during the year (2015: $1,392,419) which which was was funded funded by by cash cash reserves reserves and and contributions from incoming residents. contributions from from incoming incoming residents. residents. contributions Accommodation RADs are contributions frombonds/ incoming residents.

Accommodation bonds/ RADs are de-recognised de-recognised when when the the obligation obligation under under the the liability liability is is discharged. discharged.

Accommodation bonds/ bonds/ RADs RADs are are de-recognised de-recognised when when the the obligation obligation under under the the liability liability is is discharged. discharged.

Accommodation Accommodation bonds/ RADs are de-recognised when the obligation under the liability is discharged.

Accommodation Accommodation bonds/ bonds/ RADs RADs are are de-recognised de-recognised when when the the obligation obligation under under the the liability liability is is discharged. discharged.

Accommodation bonds/ RADs and are de-recognised de-recognised when the the obligation obligation under under the the liability liability is is discharged. discharged.

Accommodation bonds/ RADs are when (m) Critical Accounting Estimates Judgements Accommodation bonds/ RADs are de-recognised when the obligation under the liability is discharged. (m) Critical Accounting Estimates Judgements when the obligation under the liability is discharged.

Accommodation bonds/ RADs and are de-recognised (m) Critical Accounting Estimates and Judgements (m) Critical Accounting Estimates and Judgements (m) Critical Accounting Estimates and Judgements The members evaluate estimates and (m) Critical Accounting Estimates Judgements The Board Board members evaluate and estimates and judgements judgements incorporated incorporated into into the the financial financial report report based based on on (m) Critical Accounting Estimates and Judgements The Board members evaluate estimates and judgements incorporated into the financial report based on (m) Critical Accounting Estimates and Judgements The Board members evaluate estimates and judgements incorporated into the financial report based on (m) Critical Accounting Estimates and Judgements The Board members evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. (m) Critical Accounting Estimates and Judgements The Board members evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. (m) Critical Accounting Estimates and Judgements The Board members evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available available current information. historical knowledge and best current information.

The Board members evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information.

The Board members evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available available current information.

The Board members evaluate estimates and incorporated historical best information.

The Boardknowledge members and evaluate estimatescurrent and judgements judgements incorporated into into the the financial financial report report based based on on historical knowledge knowledge and best best available available current information. historical and current information.

Estimates assume a reasonable expectation of future events and are based on current trends and historical knowledge and best available current information.

Estimatesknowledge assume a reasonable expectation of information. future events and are based on current trends and historical and best available current Estimates assume assume a a reasonable reasonable expectation expectation of of future future events events and and are are based based on on current current trends trends and and Estimates Estimates assume a reasonable expectation of future events and are based on current trends and economic obtained both and the association.

Estimates data assume a reasonable reasonable expectation of future future events and are are based based on on current current trends trends and and economic data obtained both externally externally and within within theevents association.

Estimates assume a expectation of and economic data obtained both externally and within the association. economic data obtained both externally and within the association.

Estimates assume a reasonable expectation of future events and are based on current trends and economic data data obtained both externally externally and within within theevents association.

Estimates assume a reasonable reasonable expectation of future future events and are are based based on on current current trends trends and and economic obtained both and the association.

Estimates assume a expectation of and economic data obtained both externally and within theevents association.

Estimates assume a reasonable expectation of future and are based on current trends and (i) Long Service Leave economic data obtained both externally externally and and within within the the association. association. (i)economic Long data Service Leaveboth economic data obtained both obtained externally and within the association. (i) Long Service Leave economic data obtained both externally and within the association. (i) Long Service Leave (i) Long Service Leave liability for service (i)The Long Service Leave The Long liabilityService for long longLeave service leave leave is is recognized recognized and and measured measured at at current current rates, rates, based based upon upon estimates estimates of of (i) The liability for long service leave is recognized and measured at current rates, based upon estimates of The liability for long service leave is recognized and measured at current rates, based upon estimates of (i) Long Service Leave The liability for long service leave is recognized and measured at current rates, based upon estimates of (i) Long Service Leave attrition rates and probabilities of employees reaching eligible length of service.

The liability for long service leave is recognized and measured at current rates, based upon estimates of (i) Long Service Leave attrition rates and probabilities of employees reaching eligible length of service.

The Long liability forand long service leave is recognized and measured at current rates, based upon estimates of (i)attrition Service Leave rates probabilities of employees reaching eligible length of service. attrition rates and probabilities of employees reaching eligible length of service.

The liability for long service leave is recognized and measured at current rates, based upon estimates of attrition rates probabilities of employees reaching eligible length of service.

The liability liability forand long service leave is recognized and measured measured at current current rates, based based upon upon estimates estimates of of attrition rates and probabilities of employees reaching eligible length of service.

The for long service leave is recognized and at rates, attrition rates probabilities of employees reaching eligible length of service.

The liability forand long service leave is recognized and measured at current rates, based upon estimates of (ii) Useful of assets attrition rateslives and probabilities probabilities of employees employees reaching eligible eligible length length of of service. service. (ii)attrition Useful lives of depreciable depreciable assets attrition rates and of reaching rates and probabilities of employees reaching eligible length of service. of depreciable assets (ii) Useful lives attrition rateslives and probabilities of employees reaching eligible length of service. (ii)Management Useful of depreciable assets (ii) Useful of depreciable assets reviews its of (ii)Management Useful lives lives of depreciable depreciable assets reviews its estimate estimate assets of the the useful useful lives lives of of depreciable depreciable assets assets at at each each reporting reporting date, date, based based (ii) Useful lives of Management reviews its estimate of the useful lives of depreciable assets at reporting date, Management reviews its estimate of the useful lives of depreciable assets at each each reportingobsolescence date, based based (ii) Useful lives of depreciable assets Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based (ii) Useful lives of depreciable assets upon the expected utility of the assets.

Uncertainties in these estimates relate to technical Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based (ii) Useful lives of depreciable assets upon the expected utility of the assets.

Uncertainties in these estimates relate to technical obsolescence Management reviews its estimate of theUncertainties useful lives of depreciable assets at each reportingobsolescence date, based (ii)upon Useful lives ofutility depreciable assets to the expected of the assets. in these estimates relate technical uponmay the change expected utility ofof the assets.

Uncertainties in these estimates estimates relate to technical technical obsolescence Management reviews its estimate estimate of the the usefuland lives of depreciable assets at each each reportingobsolescence date, based upon the expected utility of the assets.

Uncertainties in these relate to Management reviews its of useful lives of depreciable assets at reporting date, based that the utility certain software IT assets. upon the expected utility of the assets.

Uncertainties in these estimates relate to technical obsolescence Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based that the utility certain software ITof assets. uponmay the change expected utility ofof the assets.

Uncertainties in these estimates relate to technical Management reviews its estimate of the usefuland lives depreciable assets at each reportingobsolescence date, based that the utility certain software and assets. that may may change the utility of certain software and IT IT in assets. upon the change expected utility ofof the assets.

Uncertainties in these estimates estimates relate relate to to technical technical obsolescence obsolescence that may change the utility of certain software and IT assets. upon the expected utility of the assets.

Uncertainties these that may change the utility of certain software and IT assets. upon the expected utility of the assets.

Uncertainties in these estimates relate to technical obsolescence that may the utility certain software and IT in assets. upon the change expected utility ofof the assets.

Uncertainties these estimates relate to technical obsolescence (n) Financial that may mayInstruments change the the utility utility of of certain certain software software and and IT IT assets. assets. (n) Financial Instruments that change that may change the utility of certain software and IT assets. (n) Financial Instruments that may change the utility of certain software and IT assets. (n) Financial Instruments (n) Financial Instruments Recognition, initial (n) Financial Instruments Recognition, initial measurement measurement and and derecognition derecognition (n) Financial Instruments Recognition, initial measurement and derecognition Recognition, initial measurement and the derecognition (n) Financial Instruments Recognition, initial measurement and derecognition (n) Financial Instruments Financial liabilities are recognized when Association Recognition, initial measurement and derecognition (n) Financial Instruments Financial liabilities are recognized when the Association becomes becomes a a party party to to the the contractual contractual provision provision of of Recognition, initial measurement and derecognition (n) Financial Instruments Financial liabilities are recognized when the Association becomes a a party party to to the the contractual contractual provision provision of of Financial liabilities are recognized when the Association becomes Recognition, initial measurement and derecognition Financial liabilities are recognized when the Association becomes a party to the contractual provision of Recognition, initial measurement and derecognition the financial instrument, and are measured initially at fair value adjusted by transaction costs, except for Financial liabilities are recognized when the Association becomes a party to the contractual provision of Recognition, initial measurement and derecognition the financial instrument, and are measured initially at fair value adjusted by transaction costs, except for Financial liabilities are recognized when Association becomes a partybytotransaction the contractual provision of Recognition, initial measurement and the derecognition the financial instrument, and are measured initially at fair value adjusted costs, except for the financial financial instrument, and are initially at value adjusted costs, except for Financial liabilities are recognized when or theloss, Association becomes a party partyby totransaction the contractual provision of the instrument, and are measured measured initially at fair fair value adjusted byto transaction costs, except for for Financial liabilities are recognized when the Association becomes a to the contractual provision of those carried at fair value through profit which are initially measured at fair value.

Subsequent the financial instrument, and are measured initially at fair value adjusted by transaction costs, except Financial liabilities are recognized when the Association becomes a party the contractual provision of those carried at fairare value through profit which are initially measured at fair value.

Subsequent the financial instrument, and are measured initially at fair value adjusted costs, except for Financial liabilities recognized when or theloss, Association becomes a partybytotransaction the contractual provision of those carried at fair value through profit or loss, which are initially measured at fair value.

Subsequent those carriedinstrument, at fair valueand through profit or which initially measured at Subsequent the financial instrument, and are measured measured initially at fair fair value adjusted by transaction transaction costs, except for for those carried at value through profit or loss, loss, which arevalue initially measured at fair fair value. value.

Subsequent the financial are initially at adjusted by costs, except measurement offair financial liabilities is described described below .are those carried at fair value through profit or loss, which are initially measured at fair value.

Subsequent the financial instrument, and are measured initially at fair value adjusted by transaction costs, except for measurement of financial liabilities is below . those carriedinstrument, at fair valueand through profit or loss, which arevalue initially measured at fair value.

Subsequent the financial are measured initially at fair adjusted by transaction costs, except for measurement of financial is those carried at at fair value liabilities through profit profit or loss, loss, below which ...are are initially initially measured measured at at fair fair value. value. Subsequent Subsequent measurement offair financial liabilities is described described below those carried value through or which measurement of financial liabilities is below those carried value through or which measurement offair financial liabilities is described described below those carried at at fair value liabilities through profit profit or loss, loss, below which ..are are initially initially measured measured at at fair fair value. value. Subsequent Subsequent measurement of financial is described measurement of measurement of financial financial liabilities liabilities is is described described below below ..

Loans measurement of Loans and and receivables receivables measurement of financial financial liabilities liabilities is is described described below below ..

Loans and receivables Loans and receivables Loans and receivables Loans Loans andreceivables receivablesare Loans and and receivables are non-derivative non-derivative financial financial assets assets with with fixed fixed and and determined determined payments payments that that are are Loans and receivables Loans and receivables are non-derivative financial assets with fixed and determined payments that are Loans and receivables are non-derivative financial assets with fixed and determined payments that are Loans and receivables Loans and receivables are non-derivative financial assets with fixed and determined payments that are Loans and receivables not quoted in an active market.

After initial recognition, they are measured at amortised cost using the Loans and receivables are non-derivative financial assets with fixed and determined payments that are Loans and receivables not quoted in an active are market.

After initialfinancial recognition, they arefixed measured at amortised cost using Loans and non-derivative assets with and determined payments thatthe are Loans andreceivables receivables they arefixed measured at amortised amortised cost using using not quoted in an market.

After initialfinancial recognition, not quoted quoted in an an active active market.

After recognition, they are measured at cost the Loans and receivables are non-derivative assets with and determined payments thatthe are not in active market.

After initial initial recognition, they arefixed measured at amortised amortised cost using the Loans and receivables are non-derivative financial assets with fixed and determined payments that are effective interest method, less provision of impairment.

Discounting is omitted where the effect of not quoted in an an active active market.

After initial recognition, they are measured at cost using the Loans and receivables are non-derivative financial assets with and determined payments that are effective interest method, less provision offinancial impairment.

Discounting is omitted where payments thecost effect of not quoted in market.

After initial recognition, they are measured at amortised using the Loans and receivables are non-derivative assets with fixed and determined that are effective interest method, less provision of Discounting is where the effect of effective interest method, less provision of impairment. impairment.

Discounting is omitted omitted where thecost effect of the not quoted inisan an active market.

After initial initial recognition, they are measured measured at amortised amortised cost using the effective interest method, less provision of Discounting is where the effect of not quoted in active market.

After recognition, they are at using discounting immaterial.

The association’s cash equivalents, trade and most other receivables effective interest method, less provision of impairment. impairment.

Discounting is omitted omitted where thecost effect of the not quoted in active market.

After initial recognition, they are measured at amortised using discounting isan immaterial.

The association’s cash and and cash cash equivalents, trade and most other receivables effective interest method, less provision of impairment.

Discounting is omitted where the effect of not quoted in an active market.

After initial recognition, they are measured at amortised cost using the discounting is immaterial.

The association’s cash and cash equivalents, trade and most other receivables effective interest method, less provision of impairment.

Discounting is omitted where the effect of discounting is immaterial.

The association’s cash and cash equivalents, trade and most other receivables effective interest method, less provision of impairment.

Discounting is omitted where theother effectreceivables of discounting is The cash equivalents, trade most fall category of instruments. effective interest method, less provision of Discounting is where the effect of discounting is immaterial. immaterial.

The association’s association’s cash and and cash cash equivalents, trade and and most other receivables fall into into this this category of financial financial instruments. effective interest method, less provision of impairment. impairment.

Discounting is omitted omitted where theother effectreceivables of discounting is immaterial.

The association’s cash and cash equivalents, trade and most fall into this category of financial instruments. fall into this category of financial instruments. discounting is immaterial.

The association’s cash and cash equivalents, trade and most other receivables fall of instruments. discounting is immaterial.

The association’s cash and cash cash equivalents, trade trade and most most other receivables receivables fall into into this this category category of financial financial instruments.cash discounting is The fall into this category of financial instruments. discounting is immaterial. immaterial.

The association’s association’s cash and and cash equivalents, equivalents, trade and and most other other receivables fall into into this this category category of of financial financial instruments. instruments. fall fall into category of instruments.

The was authorised for on fallreport into this this category of financial financial The financial financial report was authorised for issue issueinstruments. on 28 28 October October 2016 2016 by by the the board board members. members.

The financial report was authorised authorised for for issue issue on 28 October 2016 by the board members.

The financial report was on 28 October 2016 by the board members.

The financial report was authorised for for issue issue on 28 October 2016 by the board members.

The financial report was authorised on 28 October 2016 by the board members.

The financial report was authorised for issue on 28 October 2016 by the board members.

The financial financial report report was was authorised authorised for for issue issue on on 28 28 October October 2016 2016 by by the the board board members. members.

The | 28 Rosewood Care Groupfor ANNUAL R Eby PO RT 2015-2016 The financial was issue October the board members.

The financial report report was authorised authorised forInc. issue on on 28 October 2016 2016 by the board members.

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

12

Notes to the Financial Statements for the year ended 30 June 2016 Note 2: Revenue

Note REVENUE Operating Activities: Accommodation Bond Retentions Board & Lodgings Interest on Unpaid Bonds Subsidies Other Income Non-operating Activities: Donations Interest Rental Income Finance Income

2016

2015 $

38,127 1,029,756 210,859 2,468,431 25,337

70,333 943,304 202,873 2,173,131 72,346

16,614 202,579 92,409 -

20,809 337,516 55,123 1,288,920

4,084,112

5,164,355

Note 3: Profit/ (Loss) from Ordinary Activities Profit/ (Loss) from ordinary activities has been determined after: Expenses Remuneration of auditor Depreciation Buildings Plant & Equipment Motor Vehicles Furniture & Fittings

24,883

22,010

106,632 69,537 79,089 41,987

95,898 80,994 68,530 38,920

322,128

306,352

(94,553) 1,436 11,138 2,759,596 253 2,902,824

64,681 1,436 474,057 3,795,901 109,114 814,238 2,807,030

5,580,694

8,066,457

Note 4: Cash and Cash Equivalents

Cheque Accounts Petty Cash NAB ZRIL Accounts National Australia Bank Term Deposits Bond Account Bendigo Bank Term Deposit St George Bank Term Deposits

A NNU A L R E PO R T 2015-2016 | Rosewood Care Group Inc.

27

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

13

Notes to the Financial Statements for the year ended 30 June 2016 Note 5: Trade and Other Receivables

Note

2016

2015 $

Current Accrued Interest Receivable Receivables Less Provision for Doubtful Debts GST Receivable SEC Deposit

39,589 145,071 (35,830) 466,843 8

158,788 304,521 (35,830) 26,399 8

615,681

453,886

2016

Other receivables Total

Gross Amount

Past due and impaired

$

$

$ <30

$ 31-60

$ 61-90

$ >90

145,079 145,079

35,830 35,830

30,611 30,611

-

-

114,468 114,468

Note 6: Property, Plant and Equipment

Past due but not impaired (days overdue)

Note

Within initial trade terms $ -

2016

2015 $

Land At Fair Value Buildings At fair value Capital Works In Progress Less: Accumulated Depreciation Plant & Equipment At cost Less: Accumulated Depreciation Motor Vehicles At cost Less: Accumulated Depreciation Office Furniture and Equipment At cost Less: Accumulated Depreciation Total Property, Plant & Equipment

28

Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

15,620,600 15,620,600

15,620,600 15,620,600

6,062,378 21,895,909 (1,042,088) 26,916,199

6,056,318 9,659,635 (935,455) 14,780,498

943,367 (723,134) 220,233

916,656 (653,597) 263,059

360,842 (219,957) 140,885

314,551 (156,358) 158,193

573,467 (351,494) 221,973

540,798 (309,508) 231,290

43,119,890

31,053,640

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

14 14

Notes to the Financial Statements for the year ended 30 June 2016 Notes to the Financial Statements for the year ended 30 June 2016 Note 6: Property, Plant and Equipment (cont’d) Note 6: Property, Plant and Equipment (cont’d) Revaluation/ Impairment Testing Revaluation/ Impairment In July/ August 2011, the FreeholdTesting Land and Buildings were independently valued by Tim Anderson, F.A.P.I Certified In July/ August the Freehold were Valuers independently valued

by Tim of Anderson, F.A.P.I Certified Practising Valuer2011, (Licensed Valuer No.Land 471)and fromBuildings Egan National (WA) for the purposes identifying a fair value for Practising Valuer (Licensed Valuer No. 471) Egan National Valuersto(WA) the purposes of identifying a fair value the for Land owned

by Rosewood Care Group.

A from subsequent amendment the for Australian Valuation Standards allowed Land owned

by Rosewood Care Street Group.land A subsequent the Australian Valuation Standards allowed the valuation of Rosewood’s Cleaver and buildingsamendment to be valuedtoaccording to its “Best Alternate Use” and as such valuation of Rosewood’s Street 2014 land and buildings to bethe valued according to its “Best Alternate Use” and as such land has been revalued asCleaver at December to $9,200,000 and buildings to $3,750,000. land has been revalued as at December 2014 to $9,200,000 and the buildings to $3,750,000.

Movements in carrying amounts Movements in carrying Movement in the carrying amountsamounts for each class of property, plant and equipment between the beginning and the end of the Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the financial year. financial year.

Land Carrying amount as at 30 June 2015 Carrying amount as at 30 June 2015 Additions Capital Works In Progress Additions Disposals Cost Capital Works In Progress Disposal Accumulated Disposals Cost Depreciation Disposal Accumulated Depreciation expense Depreciation Depreciation expense Carrying amount as at 30 June 2016 Carrying amount as at 30 June 2016

Note 8: Provisions Note 8: Provisions Current Provision for Long Service Leave Current Provision for Long Service Leave Non Current Provision for Long Service Leave Non Current Provision for Long Service Leave

Office Furniture & Office Equipment Furniture & Equipment

Motor Vehicles Motor Vehicles

TOTAL

Land

Buildings

15,620,600

14,780,498

263,059

158,193

231,290

31,053,640

15,620,600 -

14,780,498 6,060 12,236,274 6,060 12,236,274 (106,633) (106,633)

263,059 26,711 26,711 (69,537) (69,537)

158,193 78,065 78,065 (31,774) (31,774) 15,490 (79,089) 15,490 (79,089)

231,290 32,670 32,670 (41,987) (41,987)

31,053,640 143,506 12,236,274 143,506 (31,774) 12,236,274 (31,774) 15,490 (297,246) 15,490 (297,246)

15,620,600

26,916,199

220,233

140,885

221,973

43,119,890

15,620,600

26,916,199

220,233

140,885

221,973

43,119,890

Note 7: Trade and Other Payables Note 7: Trade and Other Payables Current Trade Creditors Current Accrued Expenses Trade Creditors Accrued Wages Accrued Expenses Accrued Annual Leave Accrued Wages Accrued Annual Leave

Buildings

Plant & Equipment Plant & Equipment

TOTAL

2016

2015

2016

$ 2015

1,921,071 80,750 1,921,071 19,315 80,750 273,315 19,315 273,315 2,294,451

$ 304,928 32,733 304,928 46,260 32,733 310,823 46,260 310,823 694,744

2,294,451

694,744

$

$

$ 166,712

$ 118,198

166,712

118,198

68,683

58,803

68,683 235,395

58,803 177,001

235,395

177,001

A NNU A L R E PO R T 2015-2016 | Rosewood Care Group Inc.

29

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Rosewood Care Group Inc. RosewoodReport Care Group Financial for theInc. Year Ended 30 June 2016 Financial for theInc. Year Ended 30 June 2016 RosewoodReport Care Group Rosewood Care Group Inc. Financial for theInc. Year Ended 30 June 2016 RosewoodReport Care Group Financial Report for the Year Ended 30 June 2016 Financial Report for the Year Ended 30 June 2016

15 15 15 15 15

Notes to the Financial Statements for the year ended 30 June 2016 Notes to the Financial Statements for the year ended 30 June 2016 Notes to the Financial Statements for the year ended 30 June 2016 Notes the Notes9:to toBorrowings the Financial Financial Statements Statements for for the the year year ended ended 30 30 June June 2016 2016 Note Note 9: Borrowings As part 9: of the redevelopment of the facility at 5 Britannia Rd Leederville, Rosewood secured a Zero Real Interest Loan for Note Borrowings As part 9: of the redevelopment of the facility at 5 Britannia Rd Leederville, Rosewood secured a Zero Real Interest Loan for Note Borrowings Note 9: Borrowings $8,500,000 from the Department of Social Services. During 2013/ 2014 Rosewood also secured a Zero Real Interest Loan

As part of the redevelopment of the facility at 5 Britannia Rd Leederville, Rosewood secured a Zero Real Interest Loan for $8,500,000 from the Department of Social During 2014 Rosewood secured a Zero Real Interest Loan As part of the redevelopment of the facility Services. at 5 Britannia Rd2013/ Leederville, Rosewoodalso secured a Zero Real Interest Loan for As part of the redevelopment of the facility at West 5 Britannia Rd2013/ Leederville, Rosewood secured a Zero Real Interest Loan for for $14,400,000 for redevelopment of the Perth facility.

As at 30 June 2016 Rosewood received $6,375,000 $8,500,000 from thethe Department of Social Services.

During 2014 Rosewood also secured ahad Zero Real Interest Loan for $14,400,000 redevelopment of the West Perth facility. at 30 June 2016 $6,375,000 $8,500,000 from for thethe Department of Social Services.

During 2013/ As 2014 Rosewood alsoRosewood secured ahad Zeroreceived Real Interest Loan $8,500,000 from the Department of Social Services.

During 2013/ 2014 Rosewood also secured a Zero Real Interest Loan from DSS for Leederville and $3,600,000 for West West Perth Perth.facility.

The remaining for Leederville $10,800,000 for for $14,400,000 for the redevelopment of the As at 30 $2,125,000 June 2016 Rosewood had and received $6,375,000 from DSS for Leederville and $3,600,000 for West West Perth Perth.facility.

The remaining for Leederville $10,800,000 for for $14,400,000 for the redevelopment of the As at 30 $2,125,000 June 2016 Rosewood had and received $6,375,000 for $14,400,000 for the redevelopment of the West Perth facility.

As at 30 June 2016 Rosewood had received $6,375,000 West Perth will be received as milestones in the building contracts are met.

Repayments of interest on the Leederville loan from DSS for Leederville and $3,600,000 for West Perth. The remaining $2,125,000 for Leederville and $10,800,000 for West DSS Perthfor willLeederville be received as $3,600,000 milestones in building are met.$2,125,000 Repayments interest onand the $10,800,000 Leederville loan from and forthe West Perth.contracts The remaining forofLeederville for from DSS and $3,600,000 for West Perth.

The remaining $2,125,000 forofLeederville for commenced inLeederville January 2013, Principalin repayments commenced January 2015. Repayments of and interest for the West West Perthfor will be received asand milestones the building contracts areinmet.

Repayments interest on the $10,800,000 Leederville loan commenced in January 2013, and Principal repayments commenced in January 2015.

Repayments of interest for the West West Perth will be received as milestones in the building contracts are met. Repayments of interest on the Leederville loan West be received milestones the building contracts are Repayments of interest the loan Perth Perth loan will commenced in as July 2014 andinrepayments principal repayments commenced in June 2016.

As on at interest 30 Leederville June the commenced in January 2013, and Principal commenced inmet.

January 2015.

Repayments of for 2016 the West Perth loan commenced in July and repayments principal repayments commenced in June 2016. As of at interest 30 June the commenced in January 2013, and2014 Principal commenced in January 2015.

Repayments for 2016 the West commenced in January 2013, and Principal repayments commenced in January 2015.

Repayments of interest for the West Association $12,925,000 of unused Perth loan had commenced in July 2014 facilities. and principal repayments commenced in June 2016. As at 30 June 2016 the Association had $12,925,000 of unused facilities.

Perth loan commenced in July 2014 and principal repayments commenced in June 2016. As at 30 June 2016 the Perth loan had commenced in July 2014 facilities. and principal repayments commenced in June 2016. As at 30 June 2016 the Association $12,925,000 of unused Association had $12,925,000 of unused facilities.

2016 2015 Association had $12,925,000 of unused facilities.

2016 2015 Current Loan Liability - ZRIL 1,129,340 477,984 2016 2015 Current Loan Liability ZRIL 1,129,340 477,984 Bond Liquidity Line Utilised - NAB 350,000 2016 2015 2016 2015 Bond Liquidity Line Utilised 350,000 Current Loan Liability - ZRIL- NAB 1,129,340 477,984 1,479,340 477,984 Current Loan Liability ZRIL 1,129,340 477,984 1,479,340 477,984Bond Liquidity Line Utilised 350,000 Current Loan Liability - ZRIL- NAB 1,129,340 Bond Liquidity Line Utilised - NAB 350,000 1,479,340 477,984-Bond Liquidity LineLiability Utilised- -ZRIL NAB 350,000 Non-Current Loan 6,967,534 7,995,597 1,479,340 477,984 Non-Current - ZRIL 6,967,534 7,995,597 1,479,340 477,984Non-Current Loan Loan Liability Liability – NAB Construction Loan 6,733,310 Non-Current Loan Liability – NAB Construction Loan 6,733,310 - ZRIL 6,967,534 7,995,597 13,700,844 7,995,597 Non-Current Loan Loan Liability Liability – - ZRIL 6,967,534 7,995,59713,700,844 7,995,597 Non-Current NAB Construction Loan 6,733,310 - ZRIL 6,967,534 7,995,597 Non-Current Loan Liability – NAB Construction Loan 6,733,310 13,700,844 7,995,597 Non-Current Loan Liability – NAB Construction Loan 6,733,310 Total Loan Liability 15,180,184 8,473,58113,700,844 7,995,597 Total Loan Liability 15,180,184 8,473,581 13,700,844 7,995,597 Total Loan Liability 15,180,184 8,473,581 Total Loan Liability 15,180,184 8,473,581 Total Loan Liability 15,180,184 8,473,581

Note 10: Segment Reporting Note 10: Segment Reporting Rosewood Group only operates in one market segment, being Residential Aged Care. The operations take place in Note 10:Care Segment Reporting Rosewood Care Group only operates in one market segment, being Residential Aged Care. The operations take place in Note 10: Segment Reporting Note 10: Segment Reporting one location, 67 Cleaver Street, West Perth.

Rosewood Care Group only operates in one market segment, being Residential Aged Care. The operations take place in one location, 67 Cleaver Street, West Perth.

Rosewood Care Group only operates in one market segment, being Residential Aged Care. The operations take place in Rosewood Care Group only operates in one market segment, being Residential Aged Care. The operations take place in one location, 67 Cleaver Street, West Perth. one location, 67 Cleaver Street, West Perth. one location, 67 Cleaver Street, West Perth.

Note Note Note Note Note

11: 11: 11: 11: 11:

Cash Cash Cash Cash Cash

Flow Flow Flow Flow Flow

Information Information Information Information Information

(a) Reconciliation of Cash (a) Reconciliation of Cash As per Statement of of Financial (a) Reconciliation Cash Position As Statement of of Financial (a) per Reconciliation Cash Position (a) per Reconciliation of Cash Position As Statement of Financial Total Cash and Cash Equivalents As perCash Statement of Financial Position Total and Cash Equivalents As per Statement of Financial Position Total Cash and Cash Equivalents (b) Reconciliation of Net Cash from Operating TotalReconciliation Cash and Cash (b) ofEquivalents Net Cash from Operating Total and Cash Equivalents Profit/Cash (Loss) from Ordinary Activities Profit/ (Loss) from Ordinary Activities (b) Reconciliation of Net Cash from Operating Profit/ (Loss) from ordinary (b) Reconciliation of Netactivities Cash from Operating Profit/ (Loss) ordinary Profit/ (Loss)from from Ordinary Activities (b) Reconciliation ofretentions Netactivities Cash from Operating Accommodation bond Profit/(Loss) (Loss)from from Ordinary Activities Accommodation bond retentions Profit/ ordinary activities Profit/ (Loss) from Ordinary Activities Finance charge/ (revenue) Profit/ (Loss) from ordinary activities Finance charge/ (revenue) Accommodation retentions Profit/ (Loss) frombond ordinary activities Depreciation Accommodation bond retentions Depreciation Finance charge/ (revenue) Accommodation bond retentions (Profit)/ Loss on sale of assets FinanceLoss charge/ (revenue) (Profit)/ on sale of liabilities assets Depreciation Finance charge/ (revenue) Change in assets and Depreciation Change in decrease assets and liabilities (Profit)/ Loss on sale of sundry assets debtors Depreciation (Increase)/ in (Profit)/ Loss on sale of sundry assets debtors (Increase)/ decrease in Change in assets and (Profit)/ Loss on sale of liabilities assets Increase in sundry creditors & accruals Change in assets and liabilities Increase in sundry creditors & accruals (Increase)/ decrease in sundry debtors Change in assets and liabilities Increase in provision for employee entitlements (Increase)/ decrease in sundry debtors Increase in provision for employee entitlements sundry creditors & accruals (Increase)/ decrease in sundry debtors Increase in sundry creditors & accruals Increase in provision for employee entitlements sundry creditors & accruals Net cashinprovided in) operating activities Increase provisionby for(used employee entitlements Net cashinprovided in) operating activities Increase provisionby for(used employee entitlements Net cash provided by (used in) operating activities (c) Credit Standby Arrangements with Banks Net cash provided by (used in) operating activities (c) Credit Standby with Banks Net cash provided by (used in) operating activities Construction Loan Arrangements Construction Loan Arrangements with Banks (c) Credit Standby (c) Credit Standby Arrangements with Banks Construction Loan (c) Credit Standby Arrangements with Banks Credit Facility - Overdraft Construction Loan Credit Facility Overdraft Construction Loan Amount Utilised Amount Utilised Credit Facility - Overdraft Credit Facility - Overdraft Amount Utilised Credit Facility - Overdraft Line of Credit – Bonds Amount Utilised Line of Credit – Bonds Amount Utilised Amount Utilised Line of Credit – Bonds Line of Credit – Bonds Amount Utilised Line ofGuarantee Credit – Bonds Bank Amount Utilised Bank Guarantee Amount Utilised Redevelopment public art obligation Redevelopment public art obligation Bank Guarantee Bank Guarantee Redevelopment public art obligation Bank Guarantee Redevelopment public art obligation Redevelopment public art obligation

30

$ $ $ $ 5,580,694 $ 5,580,694

Activities Activities Activities Activities Activities

to to to to to

Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

5,580,694 5,580,694 5,580,694 5,580,694 5,580,694 5,580,694 5,580,694 (300,791) (300,791) (38,127) (38,127) (300,791) 108,294 (300,791) 108,294 (38,127) (300,791) 297,245 (38,127) 297,245 108,294 (38,127) 25,835 108,294 25,835 297,245 108,294 297,245 25,835 297,245 2,737 25,835 2,737 25,835 (210,154) (210,154) 2,737 58,394 2,737 58,394 (210,154) 2,737 (210,154) 58,394 (210,154) (56,567) 58,394 (56,567) 58,394 (56,567) (56,567) (56,567) 32,500,000 32,500,000 32,500,000 100,000 32,500,000 100,000 32,500,000 94,553 94,553 100,000 100,000 94,553 100,000 2,000,000 94,553 2,000,000 94,553 350,000 350,000 2,000,000 2,000,000 350,0002,000,000 350,000350,000 34,600,000-34,600,00034,600,000 34,600,000 34,600,000

$ $ $ $ 8,066,457 $ 8,066,457

8,066,457 8,066,457 8,066,457 8,066,457 8,066,457 8,066,457 8,066,457 1,217,897 1,217,897 (70,333) (70,333) 1,217,897 (1,288,920) 1,217,897 (1,288,920) (70,333) 1,217,897 284,342 (70,333) 284,342 (1,288,920) (70,333) (9,153) (1,288,920) (9,153) 284,342 (1,288,920) 284,342 (9,153) 284,342 (46,062) (9,153) (46,062) (9,153) 224,556 224,556 (46,062) 47,396 (46,062) 47,396 224,556 (46,062) 224,556 47,396 224,556 359,723 47,396 359,723 47,396 359,723 359,723 359,723 32,500,000 32,500,000 32,500,000 100,000 32,500,000 100,00032,500,000 100,000100,000100,000 2,000,000 2,000,000-2,000,0002,000,0002,000,000 119,000119,000119,000 34,719,000 119,000 34,719,000 119,000 34,719,000 34,719,000 34,719,000

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Rosewood Care Group Inc. RosewoodReport Care Group Financial for theInc. Year Ended 30 June 2016 Financial Report for the Year Ended 30 June 2016

16 16

Notes to the Financial Statements for the year ended 30 June 2016 Notes to the Financial Statements for the year ended 30 June 2016 Note 11: Cash Flow Information (Cont’d) Note 11: Cash Flow Information (Cont’d) Facility is summarised as follows: Facility is summarised as follows: The Association has a bank facility for the construction of the Leederville facility of $32,500,000 and bond line of credit of The Association has a At bank facilitydate for $1,650,000 the construction the Leederville of $32,500,000 and also bondhas linean of overdraft credit of $2,000,000 with NAB. balance of theofbond liquidity linefacility was unused.

Rosewood $2,000,000 At balance of the bondatliquidity linedate. was Interest unused. rates Rosewood also has overdraft facility with with NABNAB. of $100,000, of date which$1,650,000 $5,447 was unused balance are variable andansubject to facility with NAB of $100,000, of which $5,447 was unused at balance date. Interest rates are variable and subject to adjustment. adjustment.

Note 12: Financial Risk Management Note 12: Financial Risk Management Overview Overview Rosewood Care Group (Inc) has exposure to the following risks from its use of financial instruments: Rosewood Care Group (Inc) has exposure to the following risks from its use of financial instruments: • •

Credit Risk; Credit Risk;

• •

Liquidity Risk; and Liquidity Risk; and

• •

Market Risk.

Market Risk.

This note presents This note presents and processes for and processes for report. report.

information about Rosewood Care Group’s exposure to each of the above risks, its objectives, policies information about Rosewood Care Group’s exposure to each of the above risks, its objectives, policies measuring and managing risk. Further quantitative disclosures are included throughout this financial measuring and managing risk. Further quantitative disclosures are included throughout this financial

Rosewood Care Group (Inc)’s principal financial instruments comprise receivables, payables, bank overdraft, resident bonds, Rosewood Care Group (Inc)’s principal financial instruments comprise receivables, payables, bank overdraft, resident bonds, cash and term deposits. cash and term deposits.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Risk The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Risk management policies are established to identify and analyse the risks faced by Rosewood Care Group, to set appropriate management policies are established to identify and analyse the risks faced by Rosewood Care Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and Rosewood Care Group’s activities. Rosewood Care Group, through its regularly to reflect changes in market conditions and Rosewood Care Group’s activities. Rosewood Care Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. which all employees understand their roles and obligations.

The Finance Committee The Finance Committee policies and procedures policies and procedures Rosewood Care Group.

Rosewood Care Group.

oversees how management monitors compliance with Rosewood Care Group’s risk management oversees how management monitors compliance with Rosewood Care Group’s risk management and reviews the adequacy of the risk management framework in relation to the risks faced by and reviews the adequacy of the risk management framework in relation to the risks faced by

Credit Risk Credit Risk Credit Risk Credit Risk to meet its to meet its assets. assets.

is the risk of financial loss to Rosewood Care is the risk of financial loss to Rosewood Care contractual obligations and arises principally contractual obligations and arises principally

Group of Group of from the from the

a customer or counterparty to a financial instrument fails a customer or counterparty to a financial instrument fails group’s receivables from customers and other financial group’s receivables from customers and other financial

A NNU A L R E PO R T 2015-2016 | Rosewood Care Group Inc.

31

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Rosewood Care Group Inc. Rosewood Rosewood Care Care Group Group Inc. Inc. Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Financial Report for the Year Rosewood Care Group Inc. Rosewood Care Group Financial Report for theInc. Year Ended Ended 30 30 June June 2016 2016 Financial Report Report for for the the Year Year Ended Ended 30 30 June June 2016 Financial Financial Report for the Year Ended 30 June 2016 2016

17 17 17 17 17 17

Notes to the Financial Statements for the year Notes to Notes to the the Financial Financial Statements Statements for for the the year year Notes Notes to to the the Financial Financial Statements Statements for for the the year year Note 12: Financial Risk Management (Cont’d) Note 12: Financial Risk Management (Cont’d) Note 12: Financial Risk Management (Cont’d) Note Note 12: 12: Financial Financial Risk Risk Management Management (Cont’d) (Cont’d) Trade Trade Trade Trade Trade

and and and and and

other other other other other

ended ended ended ended ended

30 30 30 30 30

June June June June June

2016 2016 2016 2016 2016

receivables receivables receivables receivables receivables

Rosewood Care Group’s exposure to collectability of debts is influenced mainly by the individual characteristics of each Rosewood Rosewood Care Care Group’s Group’s exposure exposure to to collectability collectability of of debts debts is is influenced influenced mainly mainly by by the the individual individual characteristics characteristics of of each each Rosewood Care Group’s exposure to collectability of debts is influenced mainly by the individual characteristics of each Rosewood Care Group’s exposure to collectability of debts is influenced mainly by the individual characteristics of Rosewood Care Group’s exposure to collectability of debts is influenced mainly by individual characteristics of each each customer.

Rosewood Care Group’s customers primarily consist of the residents of the aged care facilities. customer.

Rosewood Care Group’s customers primarily consist of the residents of the aged care facilities. customer. Rosewood Care Group’s customers primarily consist of the residents of the aged care facilities. customer. customer. Rosewood Rosewood Care Care Group’s Group’s customers customers primarily primarily consist consist of of the the residents residents of of the the aged aged care care facilities. facilities. customer.

Rosewood Care Group’s customers primarily consist of the residents of the aged care facilities.

Losses have occurred occurred Losses Losses have have occurred Losses have have occurred occurred Losses Losses have occurred are not collectible. are not collectible. are not collectible. are not collectible. are are not not collectible. collectible.

very very very very very very

Other Other Other Other Other

assets assets assets assets assets

financial financial financial financial financial

infrequently. infrequently. infrequently. infrequently. infrequently. infrequently.

An An An An An An

allowance allowance allowance allowance allowance allowance

for for for for for for

impairment impairment impairment impairment impairment impairment

is is is is is is

recognised recognised recognised recognised recognised recognised

when when when when when when

it it it it it it

is is is is is is

expected expected expected expected expected expected

Rosewood Care Group limits its exposure to credit risk by only investing in liquid securities with Rosewood Rosewood Care Care Group Group limits limits its its exposure exposure to to credit credit risk risk by by only only investing investing in in liquid liquid securities securities with with Rosewood Care Group limits its exposure to credit risk by only investing in liquid securities with Rosewood Care Group limits its exposure to credit risk by only investing in liquid securities with Rosewood Care Group limits its exposure to credit risk by only investing in liquid securities with reputable counterparties.

Management does not expect any counterparty to fail to meet its obligations. reputable reputable counterparties. counterparties. Management Management does does not not expect expect any any counterparty counterparty to to fail fail to to meet meet its its obligations. obligations. reputable counterparties. counterparties. Management Management does does not not expect expect any any counterparty counterparty to to fail fail to to meet meet its its obligations. obligations. reputable reputable counterparties. Management does not expect any counterparty to fail to meet its obligations.

Liquidity Liquidity Liquidity Liquidity Liquidity

that that that that that that

well well well well well well

any any any any any any

receivables receivables receivables receivables receivables receivables

established established established established established established

and and and and and and

Risk Risk Risk Risk Risk

Liquidity risk is the risk that Rosewood Care Group will not be able to meet its financial obligations as they fall due.

Liquidity Liquidity risk risk is is the the risk risk that that Rosewood Rosewood Care Care Group Group will will not not be be able able to to meet meet its its financial financial obligations obligations as as they they fall fall due. due.

Liquidity risk risk is is the the risk risk that that Rosewood Rosewood Care Care Group Group will will not not be be able able to to meet meet its its financial financial obligations obligations as as they they fall fall due. due.

Liquidity Liquidity risk is the risk that Rosewood Care Group will not be able to meet its financial obligations as they fall due.

Rosewood Rosewood Care Care Group Group has has a a documented documented Liquidity Liquidity Management Management Rosewood Care Group has a documented Liquidity Management Rosewood Care Group has a documented Liquidity Management Rosewood Care Group has a documented Liquidity Management requirements of the Aged Care Act 1997 by determining requirements of the Aged Care Act 1997 by determining the the level level requirements of the Aged Care Act 1997 by determining requirements of of bond the Aged Aged Care Act fall 1997 by determining determining the the level level requirements the Care Act 1997 by the level accommodation refunds as they due. accommodation bond refunds as they fall due. accommodation accommodation bond bond refunds refunds as as they they fall fall due. due. accommodation bond refunds as they fall due.

Rosewood Care Group’s objective Rosewood Rosewood Care Group’s objective Rosewood Care Group’s objective Rosewood Care Group’s objective Rosewood Care Group’s objective Cash or or liquid Term deposits.

Cash Cash or liquid liquid Term Term deposits. deposits.

Cash or or liquid liquid Term Term deposits. deposits.

Cash Cash or liquid Term deposits.

currently currently currently currently currently currently

is is is is is is

to to to to to to

maintain maintain maintain maintain maintain maintain

a a a a a a

Strategy Strategy which which Strategy which Strategy which Strategy which of funding of funding that that of funding of funding funding that that of that

minimum minimum minimum minimum minimum minimum

of of of of of of

50% 50% 50% 50% 50% 50%

of of of of of of

assists assists assists assists assists will will be be will will be be will be

total total total total total total

the the Group Group the Group the the Group Group required required to to required required to to required to

Accommodation Accommodation Accommodation Accommodation Accommodation Accommodation

in in meeting meeting the the in meeting the in meeting the in meeting the meet expected meet expected meet expected meet expected expected meet

Bond Bond Bond Bond Bond Bond

Liabilities Liabilities Liabilities Liabilities Liabilities Liabilities

in in in in in in

Accommodation bonds less retention retention amounts.

Accommodation bonds are are measured measured at at the the principal principal amount amount less Accommodation bonds are measured at the principal amount less retention amounts. amounts.

Accommodation bonds bonds are are measured measured at at the the principal principal amount amount less less retention retention amounts.

Accommodation Accommodation bonds are measured at the principal amount less retention amounts. amounts.

Accommodation bonds bearing and and the net net amount Accommodation bonds are are non-interest non-interest bearing amount is is repayable repayable on on demand. demand. Accommodation Accommodation bonds bonds are are Accommodation bonds are non-interest bearing and the the net amount is repayable on demand.

Accommodation bonds are Accommodation bonds are non-interest bearing and the net amount is repayable on demand.

Accommodation bonds are Accommodation bonds are non-interest bearing and the net amount is repayable on demand.

Accommodation bonds Accommodation bonds are non-interest bearing and theGroup net amount is repayable on demand. Accommodation bonds are arefor classified as as current current liabilities because Rosewood Rosewood Care Group does not not have an an unconditional unconditional right to defer settlements for classified liabilities because Care does have right to defer settlements classified as current liabilities because Rosewood Care Group does not have an unconditional right to defer settlements for classified as current liabilities because Rosewood Care Group does not have unconditional right to defer for classified as 12 current liabilities because Rosewood Care an Group does not have an an unconditional right to years. defer settlements settlements for classified as current liabilities because Rosewood Care Group does not have an unconditional right to defer settlements for greater than months.

History shows that on average aged care resident will stay for about three Based on these greater than 12 months. History shows that on average an aged care resident will stay for about three years. Based on these greater than 12 months.

History shows that on average an aged care resident will stay for about three years.

Based on these greater than 12 months.

History shows that on average an aged care resident will stay for about three years.

Based on these greater than 12 months.

History shows that on average an aged care resident will stay for about three years.

Based on these historical historical trends, trends, Rosewood Rosewood Care Care Group Group expects expects to to pay pay approximately approximately $3,027,200 $3,027,200 (2014: (2014: Value Value per per 2014 2014 Financials Financials is is historical trends, Rosewood Group expects to pay approximately $3,027,200 (2014: Value per Financials historical trends, Rosewood Care Care Group expects to pay approximately $3,027,200 (2014:from Value per 2014 2014 Financials is is historical trends, Rosewood Care Group expects to pay approximately $3,027,200 (2014: Value per 2014 Financials is $3,302,600) of accommodation bonds in the next 12 months which will be largely funded incoming residents. $3,302,600) of accommodation bonds in the next 12 months which will be largely funded from incoming residents. $3,302,600) $3,302,600) of of accommodation accommodation bonds bonds in in the the next next 12 12 months months which which will will be be largely largely funded funded from from incoming incoming residents. residents. $3,302,600) of accommodation bonds in the next 12 months which will be largely funded from incoming residents.

Resident accommodation bonds are derecognised when the obligation under the Resident the liability Resident accommodation bonds are derecognised when the obligation under the liability is is discharged. discharged.

Resident accommodation bonds are derecognised when the obligation the Resident accommodation bonds areand derecognised whenon themanagement obligation under under the liability liability is is discharged. discharged.

Resident accommodation bonds are derecognised when the obligation under the liability is discharged.

Maturity analysis of financial assets liabilities based expectation: Maturity analysis of financial assets and liabilities based on management expectation: Maturity analysis of financial assets and liabilities based on management expectation: Maturity analysis analysis of of financial financial assets assets and and liabilities liabilities based based on on management management expectation: expectation: Maturity Maturity analysis of financial assets and liabilities based on management expectation: Year ended 30 June 2016 Year Year ended ended 30 30 June June 2016 2016 Year ended ended 30 30 June June 2016 Year Year ended 30 June 2016 2016 Financial assets Financial Financial assets assets Financial assets Cash & cash equivalents Cash & cash equivalents Financial assets Financial assets Cash & cash equivalents Cash cash equivalents Loans Loans and receivables Cash & &and cashreceivables equivalents Cash & cash equivalents Loans and receivables Loans and receivables Sub Total Sub Loans and receivables receivables Loans and Sub Total Total Sub Total Total Sub Sub Total Financial Liabilities Financial Financial Liabilities Liabilities Financial Liabilities Trade & other payables (at Trade payables Financial Liabilities Financial Liabilities Trade & & other other payables (at (at Trade & other other payables (at (at amortised cost) amortised cost) Trade & payables Trade & other amortised cost)payables (at amortised Borrowings (ZRIL) Borrowings (ZRIL) amortised cost) cost) amortised cost) Borrowings (ZRIL) Borrowings Other Other Borrowings (ZRIL) (ZRIL) Borrowings (ZRIL) Other Borrowings Other Accommodation bonds (at cost) Accommodation Borrowings Other Borrowings Otherbonds Accommodation bonds (at (at cost) cost) Accommodation bonds (at (at cost) cost) Sub Total Sub Total Accommodation bonds Accommodation bonds (at cost) Sub Total Sub Total Sub Total Total Sub Net maturity Net Net maturity maturity Net Net maturity maturity Net maturity

32

< 6 < <6 6 <6 6 months months < <6 months months $ $ months months $ $ $ $ 5,580,694 5,580,694 5,580,694 5,580,694 615,681 615,681 5,580,694 5,580,694 615,681 615,681 6,196,375 6,196,375 615,681 615,681 6,196,375 6,196,375 6,196,375 6,196,375

6 – 12 6 6– – 12 12 6– – 12 months months 6 6 – 12 12 months months $ $ months months $ $ $ $ ------

1 –5 years 1 1– –5 5 years years 1 $ $ 1– –5 5 years years 1 – 5 years $ $ $ $ ------

> 5 > >5 5 >5 5 years years > >5 years years $ $ years years $ $ $ $ ------

Total Total Total Total $ Total Total $ $ $ $ 5,580,694 5,580,694 5,580,694 5,580,694 615,681 615,681 5,580,694 5,580,694 615,681 615,681 6,196,375 6,196,375 615,681 615,681 6,196,375 6,196,375 6,196,375 6,196,375

2,294,451 2,294,451 2,294,451 2,294,451 564,670 564,670 2,294,451 2,294,451 564,670 564,670 350,000 350,000 564,670 564,670 350,000 350,000 1,795,655 1,795,655 350,000 350,000 1,795,655 1,795,655 5,004,776 5,004,776 1,795,655 1,795,655 5,004,776 5,004,776 5,004,776 5,004,776 1,191,599 1,191,599 1,191,599 1,191,599 1,191,599 1,191,599

-564,670 564,670-564,670 564,670--564,670 1,795,655 1,795,655 1,795,655-1,795,655 2,360,325 2,360,325 1,795,655 1,795,655 2,360,325 2,360,325 2,360,325 2,360,325 (2,360,325) (2,360,325) (2,360,325) (2,360,325) (2,360,325) (2,360,325)

-4,517,360 4,517,360-4,517,360 4,517,360--4,517,360 6,464,357 6,464,357 6,464,357-6,464,357 10,981,717 10,981,717 6,464,357 6,464,357 10,981,717 10,981,717 10,981,717 10,981,717 (10,981,717) (10,981,717) (10,981,717) (10,981,717) (10,981,717) (10,981,717)

-2,450,174 2,450,174-2,450,174 2,450,174--2,450,174 718,262 718,262 718,262-718,262 3,168,436 3,168,436 718,262 718,262 3,168,436 3,168,436 3,168,436 3,168,436 (3,168,436) (3,168,436) (3,168,436) (3,168,436) (3,168,436) (3,168,436)

2,294,451 2,294,451 2,294,451 2,294,451 8,096,874 8,096,874 2,294,451 2,294,451 8,096,874 8,096,874 350,000 350,000 8,096,874 8,096,874 350,000 350,000 10,773,929 10,773,929 350,000 350,000 10,773,929 10,773,929 21,515,254 21,515,254 10,773,929 10,773,929 21,515,254 21,515,254 21,515,254 21,515,254 (15,318,879) (15,318,879) (15,318,879) (15,318,879) (15,318,879) (15,318,879)

Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016 Notes Statements for the year ended 30 June Notes to to the the Financial Financial Notes to the Financial Statements Statements for for the the year year ended ended 30 30 June June Notes Notes to to the the Financial Financial Statements Statements for for the the year year ended ended 30 30 June June

2016 2016 2016 2016 2016

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Rosewood Care Group Inc. Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016 Financial Report for the Year Ended 30 June 2016

18 17

Notes to the Financial Statements for the year ended 30 June 2016 Note 12: Financial Risk Management (Cont) Note 12: Financial Risk Management (Cont’d) Year ended June 2015 Trade and30other receivables

<6 6 – 12 >5 1 – 5 years Total months months years $ $ $ Rosewood Care Group’s exposure to collectability$ of debts is influenced mainly by $the individual characteristics of each Financial assets customer. Rosewood Care Group’s customers primarily consist of the residents of the aged care facilities.

Cash & cash equivalents 8,066,457 8,066,457 Loans and receivables 453,886 453,886 Sub Total 8,520,343 8,520,343 Losses have occurred very infrequently. An allowance for impairment is recognised when it is expected that any receivables are not collectible.

Financial Liabilities Trade & other payables (at 694,744 694,744 amortised cost) Borrowings (ZRIL) assets 238,992 238,992 4,580,000 3,415,597 8,473,581 Other financial Accommodation bonds (at cost) 1,515,927 1,515,927 5,305,743 757,963 9,095,560 Sub TotalCare Group limits its exposure 2,449,663 1,754,919 9,885,743 4,173,560 18,263,885 Rosewood to credit risk by only investing in liquid securities with well established and reputable counterparties. Management does not expect any counterparty to fail to meet its obligations.

Net maturity 6,070,680 (1,754,919) (9,885,743) (4,173,560)

(9,743,542)

Liquidity Risk Market Risk Liquidity risk is the risk that Rosewood Care Group will not be able to meet its financial obligations as they fall due.

Market risk is the risk that changes in market prices such as how foreign exchange rates, interest rates and equity prices will Rosewood Care Care Group has aincome documented Liquidity Management which assists the Group meetingof the affect Rosewood Group’s and expenses or the value of its Strategy holdings of financial instruments.

Theinobjective requirements of the Aged isCare Act 1997 determining theexposures level of funding that will be required while to meet expected market risk is management to manage andby control market risk within acceptable parameters optimising accommodation bond refunds as they fall due. return.

Rosewood Care Group’s objective currently is to maintain a minimum of 50% of total Accommodation Bond Liabilities in Currency risk Cash or liquid Term deposits.

Rosewood Care Group is not exposed to currency risk.

Accommodation bonds are measured at the principal amount less retention amounts.

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 Accommodation bonds are bearing fluctuate due to changes in non-interest market interest rates.and the net amount is repayable on demand. Accommodation bonds are classified as current liabilities because Rosewood Care Group does not have an unconditional right to defer settlements for greater 12 months.

History that on average anassets aged care resident will for about three years.

BasedIntereston these Interest than rate risk arises from the shows interest-bearing financial and liabilities thatstay Rosewood Care Group utilises. historical trends, Rosewood Care Group expects to pay approximately $3,027,200 (2014: Value per 2014 Financials is bearing financial assets are generally short-term liquid assets. $3,302,600) of accommodation bonds in the next 12 months which will be largely funded from incoming residents.

2016

2015

$ Resident accommodation bonds are derecognised when the obligation under the liability is discharged.

Maturity of financial assets and liabilities based on management expectation: Cash andanalysis cash equivalents

$

5,580,694

8,066,457

Year ended 30 June 2016 <6 6 – 12 >5 1 – 5 years Total months months years The following sensitivity analysis is based on the $interest rate risk $exposures in existence at the balance sheet date:$ $ $

Financial assets AtCash 30 June 2016, if interest rates had moved, as illustrated in the table below, with all profit and & cash equivalents 5,580,694 - other variables- constant, 5,580,694 equity been affected as follows: Loanswould and have receivables 615,681 615,681 Sub Total

6,196,375

Judgement of reasonably possible movements Financial Liabilities Trade & other payables (at 2,294,451 amortised cost) Borrowings (ZRIL) 564,670 Borrowings Other 350,000 Accommodation bonds (at cost) 1,795,655 + 1%Total Sub 5,004,776 - 1% Net maturity

1,191,599

-

Profit Higher/ (Lower) 2016 564,670 - $

1,795,655 55,807 2,360,325 (55,807)

(2,360,325)

-

-

Equity Higher/ (Lower) 4,517,360 2015 2,450,174 $ 6,464,357 718,262 80,665 3,168,436 10,981,717 (80,665) (10,981,717)

(3,168,436)

6,196,375

2,294,451 8,096,874 350,000 10,773,929 21,515,254 (15,318,879)

A NNU A L R E PO R T 2015-2016 | Rosewood Care Group Inc.

Notes to the Financial Statements for the year ended 30 June 2016

33

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

Rosewood Care Group Inc. Financial Report for the Year Ended 30 June 2016

19

Notes to the Financial Statements for the year ended 30 June 2016 Note 13: Key Management Personnel Name

Position Held

Board Members - Voluntary Alan Ross Michael Hadfield Dale Haldane Barbara Horner John Pirie Fiona Barclay

President Treasurer Board Member Board Member Board Member Board Member

Executive Mario Zulberti Graham Lee Philippa Hinton

Chief Executive Officer Commercial Manager Executive Manager Care Services

The aggregate compensation of key executive management personnel is as follows: Short-Term Benefits Salary & Fees $

Superannuation $

Non-Cash Benefits $

2016 Total Compensation

388,071

37,967

2015 Total Compensation

317,685

32,385

Post Employment Benefits Other $

Total $

27,999

-

454,037

23,861

-

373,971

Note 14: Events occurring after balance date In August 2016 Rosewood received a Notice of Non Compliance from the Health Department relating to approved uses of Accommodation Deposit funds, governance policy issues and records standards. In October 2016 the Department, after examination of submissions from Rosewood, were satisfied that Rosewood had returned to compliance on the issue of approved uses of Accommodation Deposit funds and issued a Notice to Remedy the breaches of the governance and record keeping standards. Rosewood believe they have remedied the issues and expect to receive a Notice of No Further Action, but as of the date of this report have not received the Notice.

Note 15: Association Details The principal place of business of the association is: 67 Cleaver Street WEST PERTH WA 6005

34

Rosewood Care Group Inc. | ANNUAL R E PO R T 2015-2016

Rosewood Care Group Inc.

Rosewood Care Group Inc. 20 Financial Report for the Year Ended 30 June 2016 Financial Report for the Year Ended 30 June 2016

Detailed Income and Expenditure Statement For the Year Ended 30 June 2016 INCOME Accommodation bond drawdown Board and lodging Donations Interest received Interest on unpaid bonds Miscellaneous income Finance Revenue Profit on sale of assets Subsidies â&#x20AC;&#x201C; lodging

2016

2015 $

38,127 1,029,756 16,614 202,579 210,859 117,746 2,468,431 4,084,112

70,333 943,304 20,809 337,516 202,873 118,316 1,288,920 9,153 2,173,131 5,164,355

16,184 24,883 3,171 38,224 64,052 180,298 297,245 95,066 54,543 97,086 108,294 143,765 25,835 33,904 20,115 6,284 48,048 4,680 16,376 30,744 121,812 34,341 4,652 7,257 13,488 2,743,744 41,798 21,683 87,331 4,384,903 (300,791)

17,963 22,003 3,558 35,589 2,651 178,628 284,342 93,435 73,838 94,808 224,557 30,912 17,063 5,000 45,069 3,180 14,685 12,943 172,879 33,205 3,872 5,914 14,739 2,425,619 30,274 23,162 76,570 3,946,458 1,217,897

Expenditure Advertising Auditing Bank charges Cleaning Consultants Cost of Food Depreciation Electricity & Gas General Expenses Insurance Finance Charge Interest on Loans Loss on disposal of assets Laundry & Dry Cleaning Motor vehicle expenses Occupational Therapy Services Pharmacy/medical Podiatry Expenses Printing, Stationery & Postage Rates & Taxes Repairs & Maintenance Security Sponsorship Subscriptions Telephone Wages & Employee Benefits Water Corporation Waste Disposal IT Costs Profit from ordinary activities

A NNU A L R E PO R T 2015-2016 | Rosewood Care Group Inc.

35

67 Cleaver Street, West Perth, Western Australia 6005 P (08) 9328 5822, (08) 9328 5154 F (08) 9328 2417 E information@rosewoodcare.org.au www.rosewoodcare.org.au