2019€¦ · Purchased at $1.5M, the most recent professional valuation for security purposes established a valuation of $2.94M, almost doubling in value since acquisition. INC Invest

2019 Annual Report

Christian Outreach Centre Trading as International Network of Churches

“I glorified you on earth, having accomplished the work that you gave me to do” John 17:4

CONTENTChairman’s Report ................................................... 5

National Executive .................................................... 6

Operations Board and INC Invest .......................... 7

Solar Report............................................................... 9

Events and Collective Statistics ........................... 11

Church Health & Planting ..................................... 12

Financial Report 2018 ............................................ 13

Global Care .............................................................. 31

South Pacific ............................................................ 34

Education .................................................................. 35

5BORN FOR MORE.

CHAIRMAN’S REPORT

The National Executive were pleased with the financial results for 2018. We were also proud to roll out our new ministry leadership structure throughout Australia, representing our largest structural change since our foundation.

INC was birthed as a relational Movement and continues to thrive on our strength of connection. The move to Networks, away from geographical boundaries, has widened our connections. I am hearing great stories of our Pastors (new and “old”) getting to know peers outside of their region.

We have amazing people of faith, vision and deep love for His Kingdom across all our ministries in INC. Our continued focus on healthy churches is rolling through to healthy pastors, healthy ministries and healthy growth in attendance and finances.

I’d like to congratulate our education ministries of INC who have all grown in strength over the last few years. Your leadership and hard work to transform our communities is gratefully acknowledged.

Australia continues its love and support for our international family. Australian INC churches support works in over 46 countries. 2018 saw our International Chairs come together for a summit as part of our bi-annual conference. We look forward to again hosting the Chairs and family from around the world at our conference in July 2020 on the Gold Coast, Australia.

My call to all young leaders in our Movement is – lean into the strength and depth of wisdom within your local Senior Pastors, find peers in our Movement that you can develop deep authentic relationships with and keep your world big! Learn from everyone and everywhere – take opportunities to get outside your local context, see gold in His kingdom and bring it back to your local church.

Our Movement is strong when our young leaders are skilled, equipped and called to the work of the ministry.

Ps Ross Abraham

Chairman

OUR SHARED VISION

• Australia for Christ

OUR SHARED VALUES

• Faith with Stewardship• Growing Relationships with Results• Winning Souls and Influencing Communities• Learning with Equipping

OUR SHARED MISSION

• To make disciples, empower leaders and to multiply healthy churches across Australia

6 2019 ANNUAL REPORT. Christian Outreach Centre trading as International Network of Churches. 7BORN FOR MORE.

NATIONAL EXECUTIVE MEMBERS 2019

Ross Abraham ChairmanLead Pastor, Elevation Church, QLD, NSW, VIC, WA

Geoff Woodward Deputy ChairmanSenior Pastor, Metrochurch, WA

Craig Anderson National ExecutiveSenior Pastor, Infinity Church, VIC

Phil Campbell National ExecutiveSenior Pastor, Harbour Church, NSW

Suellen Holmes SecretaryChief Financial Officer, INC Office

Gary Hourigan National ExecutiveNational Director, Church Health & Planting

Peter Pilt National ExecutiveSenior Pastor, CityHOPE Church, QLD National Director, Global Care

Mark Ramsey National ExecutiveSenior Pastor, Citipointe Church, QLD, NZ, USA, EU

OPERATIONS BOARD & INC INVEST

In the 2018-19 reporting period, the Movement has acquired further assets including additional properties in Brisbane, Childers, Gympie, Mt Isa and Toowoomba.

The new property acquisitions include residential properties to serve as a manse, land banking and investment income for local churches, warehouse commercial facilities for Global Care operations and investment income and new land acquisition for future church facilities. Funding has also been provided for new construction in particular for educational facilities. We also celebrated the official opening of the Shellharbour Sprouts Early Learning Centre in October 2018 in addition to new administration and educational facilities at Victory College, Gympie and Highlands College, Toowoomba.

Congregations have been encouraged by significant transactions that have been providential. In negotiating the purchase for commercial facilities in Gympie for Global Care operations, the local owners and INC agreed on a purchase price, with the Church factoring in costs for new roofing. After shaking hands on the purchase price, a menacing hail storm tore through Gympie the following day and sufficiently damaged the roof requiring it to be fully replaced. In the aftermath, the owners explained to Ps George Miller of Victory Church, “you won’t believe this but the insurers will pay for a completely new roof”, saving the Church and Care Services ministry thousands of dollars.

Childers is another location where God has doubled-down on blessing the needs of the local community. Having received a $500K donation 18 months ago, the Childers congregation purchased land for a future worship facility which included a residential house that was subsequently renovated. With $250K leftover, the church drew up plans for a new worship facility with a cost of $1M plus. However, before plans could be submitted to Council, the adjoining Apple Creek Community Association with a large parcel of land and a 400 m2 facility, decided to wind-up and gift their property to the Church, saving the Church a $1M plus building cost and doubling the size of their property.

Joshua Usher

Daniel Joy

Michael Mulheran Chairperson

Peter Geizer Secretary


OPERATIONS BOARD & INC INVEST

Ps Nigel Allwood expressed his appreciation to the Association members for their generous gift. Having nothing to begin with 18 months ago when they started their building fund, the Childers congregation now have a church and community facility, a residential rental property, land for current and future needs and the support of the local community behind them.

In another remarkable event, Citipointe Church celebrated the addition of a new church and facility in Nashville, Tennessee earlier this year. Citipointe is excited with being given the responsibility of taking over a large and vibrant congregation previously named Oasis Church, in addition to land and building facilities valued at around $6M. In leading this growing congregation, Nashville becomes an exciting venture for expanding the music ministry of Citipointe as well as consolidating their USA ministry work.

While the property market remains subdued across Australia, revaluation of properties saw values mostly stable with modest asset growth, although some locations have dramatically improved. One such property being the Highpoint Business Complex on the busy M1 Pacific Highway at Springwood which was purchased as a distressed asset six years ago. Purchased at $1.5M, the most recent professional valuation for security purposes established a valuation of $2.94M, almost doubling in value since acquisition.

INC Invest Advisory Board reported all loans as at the end of December are in order. INC Invest continues its close association with long-standing business partners Westpac Institutional Banking Group, Data Action (software bureau services) in Adelaide and Indue Ltd (transactional processing services) based at Toowong, Brisbane.

Ashley Gullo

Gary Hourigan

INC HARNESSING THE SUN’S ENERGY

Over the last 12 months INC has been rolling out solar solutions for church and college locations with over 2,300 solar panels installed to date, amounting to over 700kW - almost the equivalent of a solar farm.

SOLAR REPORT

INC again thanks our Operations Board and the INC Invest Advisory Board Members for their valued contribution and for their ongoing financial supervision and management of the assets, finances and the related operations of the Movement.

Gideon Bosman


AUSTRALIANEW ZEALAND

EGYPTMALAYSIAVANUATU

FIJIPAPUA NEW GUINEA

SOLOMON ISLANDSISRAEL

COLOMBIA

ENGLANDARGENTINA

BRAZILCHILE

ALGERIAPAKISTAN

BANGLADESHSOUTH AFRICA

THAILANDSLOVENIA

250+Knowledge

Base Articles

8500+Knowledge Base Views

225+Posts in

the Forum

555+People Accessing

the Collective

5 Locations

490+ Attendees

105+Churches

89Set Aparts / Ordinations

ROADSHOW 2019

SOLAR REPORT

Highpoint Business Centre Complex

Victory College, Gympie

Victory Church, Maryborough

Seacoast Church, Ballina

Locations that have taken advantage of commercial solar systems over the last 12 months include Highlands Church and College, Toowoomba; Victory College, Gympie; Victory Church, Maryborough; Christian Heritage College; Citipointe West, Brisbane; Citybridge Church, Logan City; Seacoast Church, Ballina; INC Invest Highpoint Business Centre Complex and Networx Church, Springwood; with several other locations currently being assessed.

In most cases, churches and colleges have taken advantage of what is known as a purchasing power agreement (PPA) that allows locations to obtain solar without any outlay. According to INC Invest General Manager Peter Geizer, going solar is about ensuring: (i) a high-quality product in terms of solar panels and inverters that comes with long-term warranties; (ii) a professional commercial installation which is a higher technical standard to a domestic solar install, and; (iii) a funding model that factors in the seasonal performance of the solar system.

“PPAs are an agreement where solar providers install their solar system on an assessed property and then provide a discount on local power rates (generally around 20%). After the contract term, full ownership and 100% of the solar benefits revert to the property owner”.

Most industry PPA contracts are over a term of 10 to 15 years, however,

INC has been able to negotiate most contracts to five years or less depending on the location’s power use, electricity rate and power export approval, which mostly depends on the electrical infrastructure available in the local area.

The advantage of a PPA includes no cost outlay and the solar supplier carries the operational and performance risks for the contract period. In addition, free data plans are made available for monitoring of the site’s total power use and system output for the church or school.

In February 2019, Citipointe installed a 70kW solar system on their Inala facility. Citipointe used the PPA model on a five-year contract and monitoring of the system to date reveals a higher than expected output performance with current savings of $1,000 per quarter. Estimated savings is expected to balloon to $150,000 over the next 10 years.

The financial benefit to the INC Movement of all solar installed over the last 12 months, is estimated to be at least $1.2M over the next 10 years, not to mention the increased value of property assets.

The switch to solar also provides environmental benefits. The 700kW of solar installed in the last 12 months offsets 770 tonnes of CO2 per year. That is the equivalent of offsetting 100,000 litres of fuel per annum or planting 230,000 trees!

Citipointe West, Brisbane

inc conference 2018

1000 ATTENDEES

+

140 CHURCHES

+

20 COUNTRIES

+

88 SET APARTS / ORDINATIONS


Multiplying healthy local churches remains core to the mission of INC. We believe the most effective way of reaching nations with the Gospel of Jesus Christ is through the multiplication of healthy local churches. Our heart is to attract, equip, resource and mobilise, called and committed church leaders, supporting them to build healthy churches that influence their communities.

2018 saw the rollout of the new network structure for INC, which incorporated moving away from a geographic structure, to a demographic structure, whereby churches of similar sizes were networked together. One of the chief purposes behind this change was to ensure each

local church was resourced and equipped for health and growth, resulting in increased church planting.

At our 2019 Roadshows around the nation, our National Chairman, Ps Ross Abraham, reiterated the necessity for INC to increase its church planting efforts. We have established goals that over the next five years we would reach an annual planting rate of 5%. Once this is achieved, the goals will be increased to ensure future growth in INC through the planting of more churches.

In 2019 Elevation Church planted a new location in Byron Bay, NSW. Goodlife Church is well underway with its plans to plant in Auckland, NZ, in early 2020, and more are on the drawing board.

In addition to church plants, we continue to see the successful transition of established churches to a new generation of leaders. Amongst these are Resonate Church Taree NSW, Heart Church Roma QLD, Metro Church Mandurah WA, The Vines Church Weston & Musswellbrook NSW, Turningpoint Church Gunnedah NSW, Lighthouse Church Ayr QLD, Life Church Tamworth NSW and Go Church Cairns QLD.

We believe we are yet to see all that God has for us and for Australia. There will always be more disciples to make, leaders to be empowered, churches to be planted and communities to be reached.

CHURCH HEALTH & PLANTING

Winning souls and influencing communities

FINANCIAL REPORT 2018


Christian Outreach Centre

1

FINANCIAL REPORT 31 DECEMBER 2017

CONTENTS Page

Consolidated income statement 2 Consolidated statement of comprehensive income 3

Consolidated statement of financial position 4

Consolidated statement of changes in funds 5

Consolidated statement of cash flows 6

Notes to the consolidated financial statements 7

Declaration by the National Executive 15 Independent auditor’s report to the members

16

FINANCIAL REPORT

31 DECEMBER 2018

CONTENTS Page

Consolidated income statement 15

Consolidated statement of comprehensive income 16

Consolidated statement of financial position 17

Consolidated statement of changes in funds 18

Consolidated statement of cash flows 19

Notes to the consolidated financial statements 20

Declaration by the National Executive 28

Independent auditor’s report to the members 29


2

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2018

Notes 2018

$'000 2017 $'000

Revenue from continuing operations 4 120,062 111,669

Other income 5 1,882 1,817

Salaries and related expenses 6(a) (72,203) (68,069)

General operational expenses (11,714) (9,965)

Facilities management and maintenance (8,953) (6,904)

Trade purchases (2,964) (2,781)

Utilities and outgoings (3,972) (3,782)

Donations and mission giving (2,662) (1,708)

Net loss on loans & investments 6(b) - (111)

Other expenses from ordinary activities (7,849) (8,739)

Earnings before interest, tax, depreciation and amortisation 11,627 11,427

Depreciation and amortisation expenses (6,270) (6,494)

Interest expense 7 (953) (1,581)

Net surplus before income tax 4,404 3,352

Income tax expense 2(g) - -

Net surplus for the year 4,404 3,352 The above consolidated income statement should be read in conjunction with the accompanying notes.



3

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


Notes 2018

$'000 2017 $'000

Net surplus for the year 4,404 3,352

Other comprehensive income

Items that will not be reclassified to surplus or deficit Gain/(loss) on property revaluation 16 2,817 (1,574) Other adjustments 16 423 538 Other comprehensive income for the year 3,240 (1,036)

Total comprehensive income for the year 7,644 2,316

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.


4

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2018

Note 2018 $'000

2017 $'000

ASSETS CURRENT ASSETS Cash and cash equivalents 8 7,257 6,537 Trade and other receivables 9 2,793 4,403 Prepayments 1,362 1,112 Inventories 1,095 1,232 TOTAL CURRENT ASSETS 12,507 13,284 NON-CURRENT ASSETS Property, plant and equipment 10 203,165 195,033 Amounts receivable over 12 months 654 188 TOTAL NON-CURRENT ASSETS 203,819 195,221 TOTAL ASSETS 216,326 208,505 LIABILITIES CURRENT LIABILITIES Borrowings 11 16,059 14,129 Trade and other payables 12 8,897 9,403 Provisions 13 7,015 6,722 TOTAL CURRENT LIABILITIES 31,971 30,254 NON-CURRENT LIABILITIES Borrowings 14 21,206 22,940 Provisions 15 1,360 1,166 TOTAL NON-CURRENT LIABILITIES 22,566 24,106 TOTAL LIABILITIES 54,537 54,360 NET ASSETS 161,789 154,145 FUNDS Reserves 79,451 76,634 Retained earnings 82,338 77,511 TOTAL FUNDS 161,789 154,145

The above consolidated statement of financial position should be read in conjunction with the accompanying notes



5

CONSOLIDATED STATEMENT OF CHANGES IN FUNDS


The above consolidated statement of changes in funds should be read in conjunction with the accompanying notes.

Reserves Retained Earnings

Total Funds

Notes $'000 $'000 $'000

Balance at 1 January 2017 78,208 73,621 151,829

Surplus for the year

- 3,352 3,352

Other comprehensive income for the year 16 (1,574) 538 (1,036)

Total comprehensive income for the year (1,574) 3,890 2,316

Balance at 31 December 2017 76,634 77,511 154,145

Balance at 1 January 2018 76,634 77,511 154,145

Surplus for the year - 4,404 4,404

Other comprehensive income for the year 16 2,817 423 3,240

Total comprehensive income for the year 2,817 4,827 7,644

Balance at 31 December 2018 79,451 82,338 161,789


6

CONSOLIDATED STATEMENT OF CASH FLOWS - FOR THE YEAR ENDED 31 DECEMBER 2018

Notes 2018 $’000

2017 $’000

Operating Activities

Surplus before taxation 4,404 3,352

Adjustment for:

Depreciation 6,270 6,494

Bad and doubtful debts 353 216

Loss of sale of assets 6(b) - 111

Interest income 5 (180) (166)

Interest expense 953 1,581

Adjustment to prior years 16 16 (182)

11,816 11,406

(Increase)/ Decrease in trade and other receivables 894 (397)

Decrease/(increase) in inventories 137 (149)

Increase in employee provisions 488 767

(Decrease) in trade and other payables (506) (588)

Cash generated from operations 12,829 11,039

Interest paid 7 (953) (1,581)

Net cash flows from operating activities 11,876 9,458

Cash Flows From Investing Activities

Payments for property, plant and equipment (10,924) (7,998)

Interest received 5 180 166

Net cash flows used in investing activities (10,744) (7,832) Financing Activities

Proceeds/(repayment) of borrowings 624 (4,436)

Proceeds/(repayment) of lease liabilities (428) (712)

Net cash flows used in financing activities (196) (5,148) Net increase in cash and cash equivalents 720 (3,522)

Cash and cash equivalents at 1 January 8 6,537 10,491 Cash and cash equivalents at 31 December 8 7,257 6,537

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.


7

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1. Corporate Information Christian Outreach Centre is incorporated under Letters Patent issued pursuant to the Religious Education and Charitable Institutions Act 1861-1967 on 9th September, 1976. The organisation is a not for profit entity established to pursue charitable purposes only and must apply its income in promoting those purposes. Christian Outreach Centre has a registered trading name of International Network of Churches which is now in common use for the organisation. The address of the registered office of Christian Outreach Centre is:

3374 Pacific Highway, Springwood QLD 4127

The National Executive is of the view that the Group is a going concern. The Group has a reported working capital deficit of $19.464 million as at 31 December 2018. External banking facility agreements are in place with Westpac Banking Corporation (Westpac) to manage the Group's cash movement needs. The Group also manages loan facilities with Westpac with multiple revolving cash advance facilities. As at 31 December 2018, $12.7 million of this facility was classified as a current liability as it is on an annual renewal agreement. At the date of signing of the Financial Statements, this facility has been renewed for a further twelve months. Also included in the working capital deficit is $2 million in Members' investment funds held. It is unlikely that all of the funds would be withdrawn and not replaced in the 2019 financial year. The Group maintains sufficient margin in its multi-option credit agreement with Westpac to cover all Member investments at any given time should the investment funds be called upon. The working capital deficit also includes accrued long service leave entitlements of $5.67 million. In the normal course of operations it is unlikely that this would need to be paid out in full in any one year. Note 2. Summary of Significant Accounting Policies (a) Basis of Preparation The National Executive has determined that Christian Outreach Centre is not a reporting entity. The financial report is a special purpose financial report, which has been prepared in accordance with the requirements of the Australian Charities and Not-for-Profits Commission Act 2012 and the following Australian Accounting Standards:

AASB 10 Consolidated Financial Statements AASB 101 Presentation of Financial Statements AASB 107 Statement of Cash Flows AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors AASB 110 Events After the End of the Reporting Period AASB 1048 Interpretation of Standards AASB 1054 Australian Additional Disclosure

The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($000) unless otherwise stated.

8

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (b) Basis of Consolidation The consolidated financial statements comprise the financial statements of Christian Outreach Centre and its subsidiaries and special purpose entities (the Group) as at 31 December 2018. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. Specifically, the Group controls a subsidiary if and only if the Group has: i) Power over the subsidiary (i.e. existing rights that give it the current ability to direct the relevant

activities of the subsidiary); ii) Exposure, or rights, to variable returns from its involvement with the subsidiary; and iii) The ability to use its power over the subsidiary to affect its returns. When the group has less than a majority of the voting or similar rights of a subsidiary, the Group considers all relevant facts and circumstances in assessing whether it has power over a subsidiary including: i) The contractual arrangement with the other vote holders of the subsidiary ii) Rights arising from other contractual arrangements iii) The Group's voting rights and potential voting rights All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. (c) Revenue All income is recognised on an accruals basis consistent with the provision of the relevant religious and educational services. Fees, grants and other educational related income are recognised on an accruals basis consistent with the position of the relevant educational source. Revenue from the sale of goods is recognised upon delivery of goods to customers. Donations are recognised as revenue when received. The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group's activities as described below. The Group bases its estimates on historical results, taking into consideration the type of activity, the type of transaction and the specifics of each arrangement. All revenue is stated net of the amount of goods and services tax (GST). (d) Pastors and Employee Benefits Provision is made for the Group's liability for employee benefits arising from services rendered by employees to reporting date. Employee benefits expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows based on Australian corporate bonds at the reporting date. Contributions are made by the Group to employees' superannuation funds and are charged as expenses when incurred. The long service leave fund is managed by the office of Christian Outreach Centre for the benefit of participatory administrative and ancillary staff and pastors of Christian Outreach Centres and Global Care. The Colleges manage the long service leave for their staff.


9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (e) Leases Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses on a straight line basis over the lease term. Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to the Group, are classified as finance leases. Finance leases are capitalised by recording an asset and a liability equal to the present value of the minimum lease payments, including any guaranteed residual values. Leased assets are amortised on a straight line basis over their estimated useful lives where it is likely that the Group will obtain ownership of the asset or over the term of the lease. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. (f) Impairment of Assets Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. As a not-for-profit entity, value in use of property, plant and equipment and intangible assets at cost includes depreciated replacement cost. (g) Income Tax Christian Outreach Centres is exempt from income tax under section 50-5 of the Income Tax Assessment Act 1997. (h) Cash and Cash Equivalents Cash and cash equivalents in the statement of financial position comprise cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less, and overdrafts. Bank overdrafts are shown within short term borrowings in current liabilities on the statement of financial position. (i) Trade and Other Receivables Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets. Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provisions for impairment. Refer to note 2(f) for further discussion on the determination of impairment losses. (j) Property, Plant and Equipment Property, plant and equipment is carried at cost less, when applicable, any accumulated depreciation and impairment loss, and is depreciated on a basis and rates designed to write off the cost of the assets over their useful lives, commencing from the time the asset is ready for use. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the statement of comprehensive income. Land and buildings are revalued by independent externally qualified valuations on a selective basis in agreement with the Group’s lender, Westpac Banking Corporation. Depreciation Items of property, plant and equipment (other than land) are depreciated over their useful lives to the Group commencing from the time the asset is held ready for use. Depreciation is calculated on a straight line basis over the expected useful economic lives of the assets as follows:

10

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CATEGORY RATE (%) RATE

(%) Freehold buildings 0.5 - 5.0 Plant and equipment 5.0 - 25.0 Furniture and fittings 7.5 - 25.0 Computer equipment 25.0 - 33.3 Motor vehicle 10.0 - 25.0 Library resources 20.0 - 50.0

(k) Trade and Other Payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. (l) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the Australian Taxation Office (ATO). In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the ATO, are presented as operating cash flows. (m) Critical Accounting Estimates and Judgements The National Executive evaluates estimates and judgements incorporated into the financial report based on historical knowledge and best available information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. (n) Reclassification Prior period amounts are reclassified in order to conform to the current period’s presentation. (o) Accounting Standards Issued Not Yet Effective At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Group. Management anticipates that all of the relevant pronouncements will be adopted in the Group’s accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group’s financial statements is provided below. Management have assessed all standards and amendments to standards that have been issued but are not yet effective for the year ended 26 December 2018 and do not believe any will have a material impact on the group’s financial statements and have therefore not early adopted any of these standards. Note 3. Significant accounting judgments, estimates and assumptions The preparation of the Group's consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.


11


Note 4. Revenue 2018 $'000

2017 $'000

Government Grants – Recurring 40,699 38,612 Government Grants – Non-recurring 832 805 Tuition revenue 37,133 34,657 Tithes and offering 18,442 16,812 Donations 10,644 9,442 Sales 6,128 5,426 Fund raising 1,875 2,971 Rental of premises 2,819 1,931 Departmental income 1,092 425 Events 258 316 Conferences 69 224 Management fees 71 48 Revenue 120,062 111,669 Note 5. Other Income Other income 1,552 1,651 Interest 180 166 Profit on Sale of Assets 150 - Other Income 1,882 1,817 Note 6. Expenses (a) Salaries and related expenses Operating salaries and related expenses 65,085 61,795 Defined contribution superannuation expense 6,062 5,229 Long service leave expense 1,056 1,045 72,203 68,069 (b) Net loss on investments Loss on sale of assets - 111 - 111 Note 7. Interest Expense Interest expense – Westpac Banking Corporation 739 735 Interest expense - Members & Related Parties 56 770 Interest expense – Other 158 76 Interest Expense 953 1,581

12


Note 8. Current Assets – Cash and Cash Equivalents

2018 $'000

2017 $'000

Cash at bank 7,068 6,343 Term deposits 88 151 Cash on hand 101 43 7,257 6,537 Note 9. Current Assets – Trade and Other Receivables Trade receivables 2,404 3,675 Less: Provision for impairment of trade receivables (920) (899) Other receivables 1,309 2,894 2,793 5,670 Note 10 – Non-Current Assets – Property, Plant and Equipment Land and buildings 215,069 204,201 Less: Accumulated depreciation (28,665) (26,183) 186,404 178,018 Plant and equipment – at cost 20,031 19,164 Less: Accumulated depreciation (14,543) (12,654) 5,488 6,510 Furniture and fittings – at cost 13,245 10,596 Less: Accumulated depreciation (9,663) (7,346) 3,582 3,250 Computer Equipment – at cost 7,885 6,427 Less: Accumulated depreciation (5,053) (3,928) 2,832 2,499 Motor Vehicle – at cost 10,216 10,163 Less: Accumulated depreciation (5,357) (5,407) 4,859 4,756 Total property, plant and equipment 203,165 195,033


13


Note 11. Current Liabilities – Borrowings

2018 $'000

2017 $'000

Funds from members & related parties 1,994 2,600 Lease liabilities 935 1,027 Bank loans and overdrafts 13,130 10,434 Other borrowings - 68 16,059 14,129

As at 31 December 2018, the Group has a $50 million non-current facility with Westpac to cover all member investments at any given time should the funds from members and related parties be called upon (refer to Note 1).

Note 12. Current Liabilities – Trade and other payables Trade payables 6,085 6,290 Accrued expenses 2,812 3,113 8,897 9,403 Note 13. Current Liabilities – Provisions Employee benefits – long service leave 5,671 5,489 Employee benefits – annual leave 1,344 1,233 7,015 6,722 Note 14. Non-Current Liabilities – Borrowings Bank loans 20,000 20,900 Lease liabilities 1,206 1,542 Other borrowings - 498 21,206 22,940 Note 15. Non-Current Liabilities – Provisions

Employee benefits – long service leave 1,360 1,166 1,360 1,166

14


Note 16. Analysis of amounts recognised in other comprehensive income

Reserves $’000

Retained Earnings

$’000

Total $’000

Year to 31 December 2018 Asset revaluation 3,224 - 3,224 Movement in reserves (423) 423 - Adjustments to prior years 16 - 16 2,817 423 3,240 Year to 31 December 2017 Asset revaluation (854) - (854) Movement in reserves (387) 387 - Adjustment to prior years (333) 151 (182) (1,574) 538 (1,036)

Note 17. Contingent Liabilities The educational institutions in the group providing P-12 education receive grants from both the Australian and Queensland Governments. Under the arrangements entered into between Christian Outreach Centre and the Australian and Queensland Governments there are conditions which if breached in a 20-year period can result in having to repay any grant monies. The National Executive are of the opinion that the educational institutions will continue in their current capacities and therefore the liability is unlikely to eventuate. Note 18. Events Occurring After the Reporting Period Since 31 December 2018 a claim for unspecified damages was lodged and is in the early stages of investigation at the time of signing. Legal advice obtained indicates that it is unlikely that any significant liability will arise with current information available

Note 19. Auditor Remuneration

2018 $'000

2017 $'000

Audit and review of Group Financial Statements (including Component Auditors) 234 245


15

Financial Statements For

the Year Ended 31 December 2018

DECLARATION BY THE NATIONAL EXECUTIVE

The National Executive have determined that Christian Outreach Centre trading as International Network of Churches is not a reporting entity and that these special purpose consolidated financial statements should be prepared in accordance with the accounting policies described in Note 1 to the financial statements.

The National Executive of Christian Outreach Centre trading as International Network of Churches declare that in the National Executive’s opinion:

1. The financial statements, comprising the statement of comprehensive income, statement of financial position, and accompanying notes, are in accordance with the Associations Incorporation Act 1981 and:

a. comply with Accounting Standards as described in Note 1 to the financial statements; and

b. give a true and fair view of the Group’s financial position as at 31 December 2018 and of its performance for the year ended on that date in accordance with the accounting policies described in Note 1 to the financial statements.

2. There are reasonable grounds to believe that the Group will be able to pay all of its debts, as and when they become due and payable.

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

Chairman: Secretary: Dated: 29 November 2019


GLOBAL CARE FINANCIALS

GLOBAL CARE PERFORMANCEFOR THE YEAR ENDED 31 DECEMBER 2018

2018$’000

2017$’000

Revenue Of Total Revenue Of Total Revenue

Trading Income 2,550 54% 2,545 60%

Donations 1,483 31% 1,035 24%

Grants (Government & Other) 162 3% 270 6%

Fundraising 214 5% 244 6%

Other Income 298 6% 133 3%

Interest 12 - 19 -

Total Revenue 4,719 100% 4,246 100%

The above Global Care information is an extract of consolidated information and does not form part of the audited financial statements.

Expenditure Of Total Expenses

Program Expenses

Trade Purchases 1,249 27% 1,137 27%

Operational Expenses 291 6% 549 13%

Donations and Giving 618 13% 332 8%

Total Program Expenses 2,158 46% 2,018 48%

Salaries and Related Expenses 880 19% 874 21%

Facilities Management and Maintenance 400 9% 617 15%

Operational Expenses 840 18% 289 7%

Interest Expense 175 4% 175 4%

Depreciation and Amortisation Expenses 127 3% 118 3%

Utilities and Outgoings 123 3% 93 2%

Total Expenditure 4,703 100% 4,184 100%

Net surplus for the year 16 62

Assets

Cash & Cash Equivalents 988 1,157

Other Current Assets 462 183

Fixed Assets 4,286 3,701

Other Non Current Assets - 109

Total Assets 5,736 5,150

Liabilities

Trade & Other Payables 99 527

Current Employee Provisions 32 12

Other Current Liabilities 233 262

Non Current Loans 3,191 3,246

Other Non Current Liabilities 25 86

Total Liabilities 3,580 4,133


GLOBAL CARE

The Power of Kind

Global Care is a kindness movement and as Global Care continues to grow, more people around the world are being touched by the life changing power of kindness.

The champions of this kindness movement are the thousands of men and women who voluntarily, every day of the week, get up and put on their blue shirts, ready to change someone’s world.

Throughout 2018/2019 Global Care has been incredibly active around Australia and the world. From purchasing multiple road trains of hay for drought affected farmers in Northern NSW, to mobilising teams and resources to help the flood victims of North Queensland, to building an orphanage in Uganda, to expanding rapidly across South America, to microenterprise projects in multiple nations.

In Australia, the work of 85 local Global Cares working through INC churches is very diverse. It includes feeding programs, support programs, acts of kindness, ops shops, low cost food stores, outreaches into the community and helping wherever help is needed. In Australia alone there are 2,500 volunteers that show up every week to assist people. This number is outstanding and shows the passion within the Global Care community to help people. A big shout out to all the people who are Global Care Volunteers.

Mates Helping Mates.

GLOBAL CARE


SOUTH PACIFIC - INTERNATIONAL UPDATE

In March 2019, we farewelled Ps Ashley and Ruth Schmierer as our International President for the last 10 years.

For almost 35 years, Ashley and Ruth have been extensively involved in international church work through INC and they will continue as friends and mentors of those they have put in ministry across the world. One of their goals as International President was to help establish and recognise apostolic bases in world regions.

Today we have many great apostolic leaders in INC around the world and we are grateful to Ashley and Ruth for their role in this. We look forward to celebrating them at our 2020 INC Conference.

Over the past year we have seen some changes in the South Pacific including new administration at the SPM office, new Chairmen of both Fiji and Vanuatu National Executive and Elevation Church have recently taken over administration responsibility of the Balasuna Ministry School.

Some highlights include: Balasuna had 31 graduates from four nations in 2018, with 26 new students from two nations beginning studies in 2019. A total of 41 boxes of graded spectacles have reached five nations, approximately 6,000 people now better sighted, with another 24 boxes still to go out. We held a successful first South Pacific Mission Summit and created an INC South Pacific Missions Facebook page and group, which is serving us well and hosting contributions from all over the South Pacific. We have received reports from all South Pacific nations of growth in numbers of members and new church plants and Pastor Murray Townsend has visited four of our five South Pacific nations.

EDUCATION


CHRISTIAN HERITAGE COLLEGE

At CHC, we integrate biblical truth not just into “spiritual” aspects of the college but throughout the academic experience. We are committed to the development of our students’ moral and spiritual formation as well as professional competence. Our graduates play a redemptive and restorative role as teachers, business people, counsellors, ministers, parents and members of the communities God places them in around the world.

Recently we have expanded our course offerings online including a Masters in Teaching, Bachelor of Education and Graduate Certificate in Neuroscience. In 2019, we had a number of great events that included a regional business conference for business professionals in partnership with 96.5 FM and a national Research Symposium (Christian Education: Reason and Relevance) with the Australian Christian Higher Education Alliance (ACHEA).

We are planning to seek Self Accreditation Authority (SAA) along with our re-registration with TEQSA, our national accreditor, in 2020. This will enable us to self-accredit our courses. CHC’s scores on the National Student Experience Survey (SES) for 2018 are the highest of all Queensland higher education institutions and the 9th highest rated NUHEI (non-university higher education institutions) nationally with overall satisfaction of 90.6 for our undergraduate courses.

HIGHER EDUCATION - LEARNING WITH EQUIPPING

“CHC has been instrumental in shaping me into the teacher and person I am today. My degree has given me greater confidence in my ability to connect with children in a meaningful way and powerfully impact each student’s life for Christ.” Rebecca (Education)

“CHC has given me a strong foundation for my career, changed the way I think about the world…given me skills in logic, critical thinking and collaborative problem-solving.” Helen (Liberal Arts)

“I have seen both my personal and ministry life go from strength to strength. CMC-CHC has been the perfect balance of both theological and practical education which has resulted in real life transformation.” Isaac (Ministries)

“Wherever I go in life, who I have become has been because of the integrity and care that is flowing from this great and impacting college.” Wendy (Counselling)

“CHC gave me the building blocks to think strategically and plan complex projects with confidence and efficiency. I always appreciated the communication channels, willing guidance and thoughtful advice I received from my lecturers.” Jordan (Business)

COLLEGES - LEARNING WITH EQUIPPING

Five students were awarded OP 1 (4.5% of the OP-eligible cohort) and 95 students were awarded OP 1 -15 (86% of the eligible cohort) in 2018.

One of our OP 1 international students was awarded the Highest Achieving International student in the state.

Primary School was ranked 18th in the State of Queensland according to the BetterSchools website.

In 2018 over 400 decisions or recommitments to Christ were made by students through camps, chapels, assemblies and spiritual focus week.

Our International College was awarded a NEAS Premium Product Endorsement for our 12-week program for Japanese students. Only five institutions such as University of Queensland had previously been granted such an award. Our International College was one of the first schools.

The College celebrated its 40th anniversary in 2018 and Ps Ron Woolley retired at the end of 2017 after 33 years of faithful service. Ps Brian Mulheran commenced as Principal of the College on the 1st January 2018.

2019 commenced with the highest mainstream total enrolments on record 1671 students with an overall total of 1702 students.

Many sporting achievements such as Secondary School 2018 South District Swimming Carnival and District Athletics – Field Events champions, year nine boys’ volleyball team 2018 state champions, Primary School 2018 CSSA Track and Field champions, and junior girls’ soccer team 2018 CSSAQ Football champions.

CITIPOINTE CHRISTIAN COLLEGE


Enrolments - Victory College has continued to grow from 523 in 2017, 583 in 2018, to 611 at the start of 2019. The College, due to demand, had to introduce a third stream in high school. (21 on the waiting list in October 2018 for year 7).

The College won the 2018 People’s Choice award from the Gympie Chamber of Commerce for the Business of the Year. We were also runner-up Educator of the Year.

STEM students began to showcase their skills and were competing in regional robotics and drone competitions.

One Year 12 student received an OP 1 (one of only five students in the Gympie region to do so), she is now studying Medicine.

A year 12 student was selected by the Gympie Regional Gallery to be one of two students in Gympie to be given a six-month internship course and a gallery exhibition.

Our Opti-Minds students, in only their second year of competition, made the state finals.

Our equestrian team won the Maryborough Schools Equestrian Competition beating 61 schools and winning by over 200 points.

Some of our students have won the National Pleasure Horse Contest, represented Queensland in show jumping and Australia in Barrel racing.

Cert 1 and 2 in hospitality were introduced in 2018. As part of the course, students put on a luncheon for the Mayor and Councillors.

An equestrian roof was completed to give Victory College the only roofed equestrian centre for a school in Queensland.

VICTORY COLLEGE

COLLEGES - LEARNING WITH EQUIPPING COLLEGES - LEARNING WITH EQUIPPING

Celebrated 40th year of operation in 2018.

An extensive College-wide waste streaming system was implemented which by mid-year had resulted in a reduction of approximately half the waste we send to landfill each week, which includes redirecting all organic waste to our own on-site composting apparatus (OSCA).

Over 50 students and staff joined our missions teams in 2018, travelling to Thailand and Outback Queensland once again to work with our long term partners.

A new home-grown pastoral care program known as ARISE was implemented across Primary School to great success, with its focus on restorative practices and character growth.

A high point for the whole College was the unveiling of three stunning murals as part of our annual Reconciliation Week. The murals were produced in partnership with the local Gubbi Gubbi people.

The strategic appointment in 2018 of an Instructional Designer for P-12 Digital Technologies has led to a comprehensive technologies program with powerful and vibrant learning for students. BeeBots, robotics, Spheros, maker-spaces, podcasts, Codeapillars, Ozobots and drones are among the tools students use to learn programming and coding from Prep to Year 9.

SUNCOAST CHRISTIAN COLLEGE


COLLEGES - LEARNING WITH EQUIPPING

Highlands Christian College grew by nearly 10% in 2018.

After 36 years of Christian Outreach College Toowoomba, the decision was made to rebrand as Highlands Christian College. The response from our community was overwhelmingly positive and we are experiencing a sense of school pride amongst our students that has not been present for a long time.

In 2018 we focused strategically on community building and included a Twilight Festival that was hugely successful. Our annual community events such as our Pink Breakfast celebrating our women to coincide with International Women’s Day, College BBQ and Grandparents Day were all taken to the next level.

We travelled to the Philippines for our first mission trip partnering with Compassion – the first school to establish this type of partnership. The trip was hugely impacting for our students and staff.

HIGHLANDS CHRISTIAN COLLEGE

CHILDCARES - LEARNING WITH EQUIPPING

SPROUTS EARLY LEARNING, SHELLHARBOUR

Sprouts official day of opening was on the 15th October 2018. After our first week of being open we partnered with Shellharbour Community Church to celebrate the achievement of FINALLY opening our doors and seeing a nine-year dream come to fruition. It was a short 10 weeks for 2018 but it was exciting to get started. The educators and staff that came to Sprouts all shared the same vision, believing that Sprouts would be a place where we could share God’s love for children and families. Through word of mouth and parents’ praise, Sprouts quickly filled and by the end of the year we were three quarters full.

We finished the year excited and ready to embrace what God had in store for Sprouts in 2019.

HIGHLANDS KINDY & EARLY LEARNING

Since the transition mid-July 2014 to a Long Day Care model from a Kindergarten model that had been operating for 27 years, there has been much restructuring, renovating, establishing and growth for our Centre. Within five years, we moved from three rooms and six staff to now seven rooms and 40 staff across our Kindy & Early Learning and OSHC and over 300 students benefiting from these services. Every step of the growth journey has been strategic, not only for the benefit of our Centre but also the larger vibrant and amazing Highlands campus that we belong.

With the sixth and final room being certified and operational at the end of 2018, the Centre is now in an exciting phase and well positioned to further refine our systems to see what God has planned for us in the future.


CITIPOINTE CHILDCARE

Opening in April 2018, Citipointe Childcare Pine Rivers has slowly built consistent growth in the service. Offering extensive educational programs within a loving environment, we have had open days and focused events for our families and extended community to attend. Our biggest event to date was Easter that saw many new people from the community walk through our doors to experience our service and wonderful staff for the first time. A memorable day for all in attendance, the Easter event and other family events held at our service have created a great connection with families that haven’t been associated with a church before.

We are proud of our beautiful facility that welcomes our families with its fresh decor and offers a large playground based around nature itself.

MYKINDY AT VICTORY

This year, MyKindy has seen some beautiful changes to our outdoor areas, emphasising our love for learning in nature and the benefits this holds for children. We built an exciting stage area for the children to use as a fantasy area for many games promoting the use of our vivid imaginations. A new nature play space was created with native gardens, a wooden tee pee, a sand pit yarning circle, a mud kitchen with water pump and a trough for mixing our own mud. A real sensory experience for the children. In the nature garden we also have our very own archaeological dig site where we are able to dig for dinosaur bones.

Our Victory College agricultural students helped extend the horse paddock so that we can now also enjoy visits from the horses.


SUNCOAST LITTLE LEARNERS

2019 marks 10 years of operation for Little Learners and we had many highlights over the past year. Our Service underwent Assessment & Rating over two days and achieved a MEETING rating. We commenced monthly visits to Sundale Retirement Village, celebrated Early Educators Day and our Bush Kindy Program continues to support our philosophy of nature play.

We achieved and held 92% occupancy rate and increased capacity in our Kindergarten class in 2019 to cater for our waitlist.

FAMILY LINK CENTRE, COFFS HARBOUR

During September 2018, educators at Family Link Centre issued a demolition order on the old cubby house. Children love cubby houses, and each of our yards has always had one. This made us think, ‘Why just one?’ So with a lot of consultation involving children; a community of cubby houses was decided upon. A construction site was established, with construction rules and safety gear required. This was possibly the most exciting event of the season! The children were allowed to ‘pull something apart’. With educators at the ready, equipped with safety gear and instructions, children tore down the existing cubby with glee. Children followed direction, and nobody was hurt in the de-construction of the work site! Once safely demolished, the new site had to be prepared for the new VILLAGE. The little street of houses emerged just as a house on their own street corner may have. Now, the houses are filled with many children – talking through their windows, checking out their mail boxes, and much opening and closing of doors.

It provides a wealth of different play ideas, from make-believe to real-life scenarios.


International Network of Churches

Tel: + 61 7 5506 5100

Business Office PO Box 6917 Tweed Heads South NSW 2486 Australia

Registered Office 3374 Pacific Highway Springwood QLD 4127 Australia

Web: inc.org.au

2019€¦ · Purchased at $1.5M, the most recent professional valuation for security purposes established a valuation of $2.94M, almost doubling in value since acquisition. INC Invest

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