annual report 2018 — 2019 2 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 3

Artwork by: Acknowledgement Josh Muir of Country Josh is a proud Yorta Yorta/ headspace would like to Gunditjmara man who holds his acknowledge Aboriginal and Torres culture strong and close to his Strait Islander peoples as Australia’s heart; it gives him his voice and his First People and Traditional identity. Muir’s artworks echo his Custodians. We value their cultures, culture in a contemporary setting, identities and continuing connection and his practice reflects his journey. to country, waters, kin and This piece captures values from the community. We pay our respects headspace vision for reconciliation: to Elders past and present and are Celebration, Country, Diversity, committed to making a positive Culture, Healing, Respect and Equity. contribution to the wellbeing of Aboriginal and Torres Strait Islander These values are the underlying young people, by providing services factors in what it takes to establish that are welcoming, safe, culturally the central Reconciliation icon: appropriate and inclusive. a Yarning circle, belonging and echoing throughout time as a ripple effect. Acknowledging our past, present and future with three spears. Wattle seed cornerstones support the piece to represent the importance of healing to reconciliation.

headspace Reconciliation Action Plan Artwork 2019 by Josh Muir, Yorta Yorta / Gundijtmara

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welcome to the 2018—2019 annual report

6 16 31 35 a message from headspace stories contents – consolidated consolidated statement the ceo financial statements of cash flows 8 18 32 36 a message from governance statement consolidated statement notes to the consolidated the board chair of profit or loss and other financial statements comprehensive income 10 20 33 56 headspace consolidated consolidated directors’ declaration snapshot financial report financial position 12 30 34 57 about headspace auditor’s independence consolidated statement independent auditor’s declaration of changes in equity report to members

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a message from the CEO

Thank you to everyone across Wait times programs, enables greater mental Thanks to partnerships with corporate Thank you health and wellbeing support for and community organisations like the Australia who helped almost A key priority area was to better Much of what has been achieved over educators, students and their families. National Rugby League (NRL) and 100,000 young people to visit a understand wait times in headspace the last year would not have been Riot Games, we were able to reach headspace centre, resulting in centres. In response to growing possible without the tremendous Stakeholder engagement even more young people. We are close to half a million visits over demand for services, headspace hard work, dedication and passion incredibly grateful to all our corporate the 2018 – 2019 financial year. undertook a national survey of Stakeholder engagement has been of headspace employees. Our partners, who enable us to amplify Despite the ongoing stigma headspace centres to uncover the another big focus as we developed people are our greatest asset our messages and resources. associated with mental health and level of demand and key factors and strengthened our relationships and thanks to them, headspace with key network partners, including seeking help, young people came perceived to affect wait times. The Advocating for headspace is a truly great place to work. primary health networks (PHNs), lead to headspace in record numbers release of this report helped inform I want to personally thank the talented because they see headspace a 2019 Federal Budget commitment agencies and consortium chairs, The last few months of this year have and hosted workshops for state- been dominated by representing and passionate headspace National as a brand they connect with of $152 million over six years to Executive team, who ensure that we and a safe place to share with help address these issues. We are based centre managers and clinical the value and role which headspace leads, GPs and the Aboriginal and plays in communities, with both work collaboratively and support someone they trust. Together with constantly seeking to ensure that all their committed teams to achieve the centre network and national young people can access headspace Torres Strait Islander staff network. the Federal Budget and Election providing opportunities for much our vision that all young Australians programs, we’ve worked towards services and we will be implementing We are committed to engaging public commentary. We are fortunate are supported to be mentally healthy reducing stigma and reached more new strategies over the coming year with Aboriginal and Torres Strait to enjoy long-term bipartisan support and engaged in their communities. young Australians in their local to strengthen opportunities so that Islander young people to support for our work, and we were pleased to communities than ever before. the right service is provided to the their social and emotional wellbeing. Finally, as always, thank you to see that mental health – particularly right young person at the right time. 7,691 young people who identified everyone from the national centre for young people – was a focus with Youth participation as Aboriginal and Torres Strait network – the centre teams, lead many commitments to the headspace Young people, their families and Accessing services Islander came to headspace centres agencies, PHNs and consortium network. We look forward to working friends, are integral to headspace We saw the headspace centre for 31,577 occasions of service. chairs – who bring headspace with the government, PHNs and and everything we do. It was a busy network grow by 14 new sites, Cultural safety and security is of high to life every single day in local the centre network to implement year for youth participation as we including one outreach, three importance to headspace as is the communities across Australia. and deliver on these investments. waved goodbye to our 2017 – 2019 satellites, four outposts and six support for more than 50 Aboriginal Jason Trethowan cohort of the headspace Youth centres. More than 50 per cent and Torres Strait Islander people We partnered with Orygen, the National Reference Group (hY NRG) of headspace centres are now working in headspace centres. National Centre of Excellence in CEO, headspace and said hi to the 2019-2021 group. operating in rural and regional areas. Youth Mental Health, on a joint Supporting priority groups submission to the Productivity hY NRG continue to have a profound As part of the headspace digital Commission’s Inquiry into the Social impact, contributing to campaigns, strategy and national infrastructure, We commissioned a nationally and Economic Benefits of Improving clinical governance and everything our development of new systems, representative survey of young Mental Health, and after consulting in between. During the year we upgrade of old ones, service people aged 12-25, asking about with young people, families and also established a new Australian enhancements and integration their mental health and wellbeing. friends, and headspace centres we Youth Ambassador program in across centre and online services are We discovered that nearly one in three developed a headspace submission partnership with other national mental driving support for end-to-end user young Australians were reporting high to the Royal Commission into health organisations. We remain journeys and care. For instance, the or very high levels of psychological Victoria’s Mental Health System. incredibly inspired by the voices and eheadspace service is now providing distress but as high as 35 per cent Both of these are a once-in-a- experience young people have in a wider range of service offerings to have never sought support from a generation opportunity for mental shaping the future of headspace. young people, families and friends. mental health professional. These insights formed the backbone of health reform and we will continue We made significant progress with many of our media and community to make a strong argument for early the implementation of the Be You awareness campaigns, including intervention and youth mental health. program in primary and secondary headcoach, a cyberbullying schools. This Beyond Blue initiative, initiative and headspace day. alongside our broader School’s

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a message from the board chair

The headspace Board is proud care for young people with more Reconciliation Action Plan for young people and their mental health. During his time on the Board, to see headspace services severe and complex conditions, seek We were proud to launch the Ian saw and played a significant continue to grow throughout the longer term contracts for primary headspace Reconciliation Action role in the growth of headspace country, increasing access for health networks and implement Plan (RAP) this year. The launch as the Government’s preferred young people across Australia quality improvement initiatives. of the headspace RAP reflects youth mental health platform. to youth-friendly and culturally We are incredibly thankful to the our commitment to working with appropriate mental health support. Government for allocating funds community Elders, children, young The Board would also like to thank Expansion of the network to help reduce wait times as people and all First Nations people, headspace CEO Jason Trethowan, part of the Federal Budget. Their to be led by them and to play our whose strong leadership has enabled 2018 – 2019 saw vital expansion continued investment in headspace important role in closing the health the organisation to secure much of the headspace network, with 14 demonstrates both the value and gap for Aboriginal and Torres needed funding, the headspace new services opening in locations the need for headspace. We know Strait Islander people. Our vision Executive team and the entire team spanning Melton (VIC) through that increased investment in early for reconciliation is an equitable at headspace National for a year of to Mandurah (WA), ensuring intervention is key to supporting Australia where the 60,000 year old outstanding success in supporting headspace reaches young young people’s mental health cultures and continuing connection the mental health of young people. people right across Australia. and we thank the Government to Country of Aboriginal and Torres I would like to acknowledge my fellow We also continued to see high levels for its continued commitment Strait Islander peoples are respected Board Directors whose service helps of satisfaction across eheadspace to youth mental health. and celebrated. Thank you to the us to achieve the best mental health (83 per cent), headspace centres Aboriginal and Torres Strait Islander Board engagement outcomes for young people. Thank (86 per cent) and headspace Early team members at headspace and you to Professor Patrick McGorry Psychosis (92 per cent). We know As part of the Board’s engagement all the members of the working AO, Ms Anne Murphy Cruise, young people are seeing the benefits with the services and staff we are group who came together to design Dr Annette Carruthers, Ms Katina of the service with research revealing proud to govern, we were fortunate an outstanding piece of work. Law, Dr John Harvey, Ms Amelia 62 per cent of young people attending to have Board meetings hosted Walters and Mr Jarrad Hickmott. headspace get better. With increasing at headspace Bankstown (NSW), Youth participation satisfaction and positive impact Orygen, the National Centre of This year, I’ve been honoured The headspace Board is firmly of headspace comes a growing Excellence in Youth Mental Health to commence my role as Board dedicated to continuing its work with, demand for the headspace service. (VIC), and headspace Fremantle (WA). Chair – a position I’m both grateful and for, all young people to ensure Experiences such as this enable for, and incredibly proud to hold. they have access to youth-friendly, Wait times the Board to meet with staff and In a true demonstration of the innovative, culturally-appropriate and best practice mental health We acknowledge the barrier that young people and see services in headspace commitment to put services. We are honoured to govern wait times create to help-seeking action. During our time in Western youth participation at the very core headspace as a world-leading for young people and their families. Australia, we had the privilege of of the organisation, the Board also organisation in youth mental health; We also know that wait times are a hearing a panel discussion about welcomed the appointment of a role we are privileged to hold. period of high risk for young people. Aboriginal and Torres Strait Islander two new youth advisors – Amelia youth mental health in the context Walters and Jarrad Hickmott. Thanks to feedback from headspace Lisa Paul AO PSM centre managers in late 2018, we of rural and remote communities. Board Chair, headspace have a better understanding of the Panellists offered valuable insights Thank you level of demand and the key factors on the challenges working and On behalf of the headspace Board, that were perceived to affect wait living in regional and remote areas I would like to offer sincere thanks times. In addition to centre expansion, and also talked about the vital role and congratulations to Ian Marshman, we identified a need to increase that culture plays in improving the who finished up as Board Chair clinical workforce capacity, invest in mental health and wellbeing of this year. Ian, who held the position headspace digital and technology Aboriginal and Torres Strait Islander of Chair since 2016 and was a platforms, augment the existing young people, something of utmost Board member since 2009, is a headspace platform to provide better importance to headspace. tireless and dedicated advocate

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headspaceheadspace 2 ,957, 4022 ,957,524,800 402 524,800eheadspaceeheadspace 2018-2019 2018-2019 services have been providedservices to have beenyoung provided people have to accessedyoung people have accessed young people through centres,young people throughsupport centres,through centres,support through centres, since inceptionsince inceptiononline and phone services.online and phoneonline services. and phone services.online and phone services.Number of youngNumber people of young people Main issues Main issues accessing eheadspaceaccessing eheadspace 1% Vocational 1% Vocational

2% Alcohol or other drugs2% Alcohol or other drugs headspaceheadspace centres centres 2018-2019 2018-2019 6% Other 6% Other

7% Stress related 7% Stress related There are 110 centres acrossThere Australiaare 110 centres in metro, across regional Australia in metro, Mainregional issues Main issues and rural areas. We alsoand have rural a number areas. Weof satellite, also have outpost a number of satellite, outpost NT NT and outreach services. and outreach services. 235 235 27% 27% 5% Anger 5% Anger QLD QLD Stress related Stress related Situational Situational 5% 5% WA WA 5,710 5,710 2% Sexual health 2% Sexual health 3,082 3,082 30% 30% 2% Alcohol or other drugs2% Alcohol or other drugs 2 2 NT NT Anxiety Anxiety 2% Vocational 2% Vocational SA SA 1,073 1,073 2% Other 2% Other 2,321 2,321 3,816 21 QLD 3,816 21 QLD 23% 23% 2% Physical health 2% Physical health NSW NSW 20% 20% 22,022 22,022 Anxiety Anxiety 9,172 14%9,172 Other 14%Depression Other Depression 13 WA 13 WA 88,479 88,479 14% 14% 10% 10% mental health mental health 9,783 9,783 Situational Situational ACT ACT 9 SA 9 36SANSW 36 NSW 26% Other26% mental health Other mental health and behaviour and behaviour 39,964 39,964 724 conditions724 conditions 6,181 6,18128,625 28,625 Depression andDepression behaviour and behaviour 27,462 27,462130,784 130,784 conditions conditions VIC VIC 9,045 9,045 1 ACT 1 ACT TAS TAS 26 26 1,507 1,507 Unknown LocationsUnknown = 958 Locations = 958895 895 VIC 5,795VIC 5,795 Age Age Satisfaction Satisfaction Number of centres/satellitesNumber 27,259of centres/satellites2 TAS 27,259 2 TAS 116,604 116,604 Priority groupsPriority groups Number of young peopleNumber who of young people3,442 who 3,442 12–14 8% 12–14 8% 13,231 13,231 accessed headspace centresaccessed headspace centres Aboriginal and Aboriginal and 9% 9% 32,142 32,14282,722 82,722 Number of services providedNumber of services provided Torres Strait Islander Torres Strait Islander young people young peopleservices provided services15–17 provided 28%15–17 28% Culturally and Culturally and accessed online and accessedto onlineyoung andpeople to young people 10% 10% Linguistically Diverse Linguistically Diverse phone counselling phone counselling 18–20 28%18–20 28% 99,892 99,892426,135 426,135 LGBTIQA+ LGBTIQA+ 24% 24% 21–23 20% 21–23 20% young people young peopleservices provided services provided accessed headspace accessedto headspaceyoung people to young people 24–25 9% 24–25 9% centres centres Gender Gender 25+ 7% 25+ 7% Age Age Satisfaction Satisfaction 85%85% Gender Gender 18% 18% 12–14 30%12–14 30% Male Male Priority groupsPriority groups 38% 38% 15–17 32%15–17 32% Male Male Aboriginal and Aboriginal and 78% 78% 4% 4% 18–20 18–20 Torres Strait Islander Torres4% Strait Islander 4% 21% 21% Female Female Gender diverse Gender diverse 2% 2% or undisclosed or undisclosed Culturally and Culturally and 60% Gender60% diverse Gender diverse 21–23 13% 21–23 13% Linguistically Diverse Linguistically6% Diverse 6% Female Femaleor undisclosed or undisclosed 24–25 4% 24–25 4% LGBTIQA+ LGBTIQA+ 15% 15%

NB: Above data reflective of services formallyNB: Above announced data reflective and open of asservices at 30 June formally 2019 announced and open as at 30 June 2019 87%87%

headspace Schoolsheadspace Schools headspace Workheadspace Work headspace Earlyheadspace Psychosis Early Psychosis Career mentoring withCareer mentoring with 2018-19 2018-19 and Study 2018-19and Study 2018-19 work and study work and study 2018-19 2018-19 4,395 4,395 school principals, leadershipschool and principals, leadership and wellbeing staff supportedwellbeing and trained staff supported and trained

35,905 35,9052,828 2,828 1,567 5671,567 56788% 88% 160 16097% 97%3,077 3,077296,539 296,53994% 94% students engaged studentsschool engaged principals school principalseducators and educatorsyoung people and youngsatisfaction people satisfactionyoung people youngsatisfaction people satisfactionyoung people youngservices people provided servicessatisfaction provided satisfaction and leadership and leadershipwellbeing staff wellbeingaccessed staff the service accessed the service accessed the service accessed the service accessed the service accessedto young the people service to young people

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about headspace At headspace, we believe in the power of youth. Our vision is that all young Australians are supported to be mentally healthy and engaged in their communities.

Each year, headspace provides early headspace centre network intervention mental health services A national network of 110 to 12 – 25 year olds. Since 2006, headspace centres operates across headspace has provided nearly three metropolitan, regional and rural areas million services and supported more of Australia, along with a range of than half a million young Australians satellites, outreach and support. to strengthen their wellbeing and manage their mental health. In 2018 eheadspace – 2019 alone, headspace supported eheadspace is our online and phone over 130,000 young people. counselling service and is available The headspace model understands for young people seven days a 110headspace centres that adolescence and early week. eheadspace supports young adulthood is a critical time in a people who are not able to access a person’s life. Research highlights headspace centre or would prefer to that more than 75 per cent of mental get help online. Providing a secure health disorders begin before the and anonymous place to talk to a age of 25. headspace provides a professional means many young holistic approach to supporting people who wouldn’t ordinarily young people early in life through seek help at a face-to-face service four core areas: mental health, are getting the help they need. physical (including sexual) health, work and study support, and alcohol and other drug services.

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headspace Telehealth headspace Early Psychosis “It’s great to headspace Telehealth provides The headspace Early Psychosis see not only 12 – 25 year olds, in eligible regional program supports young people and rural areas, access to highly- experiencing, or at risk of developing, young people skilled psychiatrists via video psychosis. Based on evidence but community consultations. These psychiatrists are developed by Orygen; the National experts in youth mental health and Centre of Excellence in Youth members of all have experience working with young Mental Health, the program is ages welcoming people from various backgrounds. delivered by select headspace headspace. centres and focuses on early headspace Work and Study intervention, providing young We’ve already headspace vocational programs people and their families with timely been able to offers free and confidential support access to specialist support. for young people needing help with support lots of work and study, career mentoring young people.” with industry professionals and Individual Placement Support, which – Cate Chaiyot, Centre integrates employment and vocational Manager, Wonthaggi services with clinical mental health. headspace Schools headspace Schools supports, engages and partners with education and health sectors across Australia, to build the mental health literacy and capacity of workforces, children, young people, their families and wider school communities. Their programs and initiatives include primary and secondary school service delivery partner for Be You, School Suicide Prevention Activities, School staff and Principal Mental Health and Wellbeing, and various programs, training and professional development packages.

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“My daughter was cyberbullied by a former friendship group at ann’s her school when she identified james’s niharika’s the relationships as unhealthy for her, and tried to amicably story break away from them. The story story bullying took place in a number “I really want to give back to Ann Gallagher, of online forums and platforms, James Bush, a Niharika Hiremath, was organisations like headspace. a mum from the and very quickly got out of hand. member of our a member of our 2017 – While I’m in this position, I want headspace Family 2017 – 2019 2019 headspace Youth “The cyberbullying had a young people to know that having and Friends Reference significant impact on my headspace Youth National Reference open and honest conversations Group, experienced daughter’s mental health and National Reference Group (hY NRG), who has about mental health is ok. It’s firsthand the impacts her ability to attend school. Group (hY NRG), talks since been appointed the right path for reducing of cyberbullying, We had to work really hard for about when he as a commissioner to stigma and help seeking.” and the challenges months with the school and started to question the National Mental that young people, police to find an outcome that his sexuality. Health Commission. kept her safe and enabled her parents and schools erika’s time and space to recover. “It was kind of hard talking “I provide advice to Government have in responding to about my sexuality with on ways to continuously improve these experiences. “Fortunately, my daughter story my family as I grew up youth mental health and suicide opened up to me about the in a small town and also prevention. I also help the experience quite early on so I “I signed up to headspace because my family were quite Commission with input and could be there for her and work Career Mentoring because conservative. I turned to my translating the outcomes of with the school to try and help, I was unsure about what friends first and they really the Productivity Commission’s but I know this isn’t always the to do next in my work helped me figure everything Inquiry into Mental Health, and case. I would encourage parents journey. I wanted to speak out and gave me the courage advise on the delivery of the to be aware of what goes on so with someone who had to talk to my family. Government’s youth mental health they can be there for their kids.” experience and qualifications “For a while, I struggled to and suicide prevention plan. in my field of interest. watch some of my friends “Together we worked on my and family not know what to cover letter, resume writing, do or how to act around me. interview presentation and But I really believe that my skills at work including family and I have become a expectation setting and lot stronger after I opened mike’s story report writing. She helped up about questioning my brandon’s story me with my confidence – gender and when I said I Mike Anderson, 2019 – “Unfortunately, I didn’t really I have a stutter and she wanted to begin transitioning. One of Australia’s for me to look after my physical reach out for any support at the encouraged me to meet with and mental health. I prioritise 2020 headspace Youth “When people got my leading professional time, other than to mention it to an advertising executive sleep, exercise, healthy eating National Reference pronouns wrong, initially esports players, my friends. I feel I probably who also has a stutter. and positive relationships with Group (hYNRG) member, should have reached out to it hurt a lot, even if people Brandon Holland, joined family and friends in order to “She was very encouraging shares his experience my parents or a trusted adult, didn’t mean it, it made me us in our headcoach not only do my job, but enjoy a and helped me to see things of cyberbullying. and kind of wished I did. If I feel sick in a way because campaign to help well-balanced, happy, healthy from a different perspective had, maybe the online threats that’s just not who I was. educate young men lifestyle and state-of-mind.” “When I left primary school, – more glass half full. Now, it’s a lot better because the easiest way to stay in touch would have stopped and on how to maintain a caused me less anxiety.” “Having worked with a mentor, I know that a lot of the time was Facebook. Messaging my it’s just honest mistakes. healthy headspace. friends was a good way to keep I now feel more confident “A passion for gaming doesn’t the connection and stay up to applying for work. It’s the “If there’s one piece of advice have to be at the exclusion of all date on how their life was going. first time I’ve secured a job that I could give other young through applying and not people who might be going other pastimes, interests and “My friend got into a relationship through networking. Before through something similar it’s relationships. Professional gamers and I was super happy for her this I’d always relied on that you’re not alone. There take their combined physical and but her new boyfriend didn’t networking as I was doubtful is always someone out there mental wellbeing just as seriously like that we still kept in touch of my actual abilities. to support you whether it’s as professional athletes. Like and he began threatening any hobby or interest, gaming “This is the first time I’ve your family, friends, someone me on social media. online or someone in the should be treated as just one passed probation. The element of a balanced lifestyle.” “I genuinely felt scared and advice my mentor gave LGBTIQA+ community – was made to feel like I was doing me was actual industry you’ve always got someone “In order to sustain the mental something wrong, but I knew experience and I liked you can turn to and talk to.” alertness required to master I wasn’t, I simply just wanted that we met regularly on the complex strategies behind to talk to my friend. a structured basis.” many video games, it is critical

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headspace National Youth Mental Health Foundation ‹‹ Is the primary representative of the Board in ‹‹ Keeping the Board and funding agencies informed ‹‹ Notice shall be given of General Meetings Ltd (headspace) is a company limited by guarantee dealings between government and headspace. about any developments with a material impact according to the provisions specified in the established for the purpose of promoting the improved ‹‹ Oversees the CEO performance review on headspace Groups performance. headspace Groups’ constitutions. health and mental health outcomes for young together with the Board. ‹‹ Managing day to day operations of the headspace people in Australia, including through the funding Board Committees ‹‹ Oversees and guides the participation Group in accordance with agreed standards for of early intervention and prevention programs. of Youth Advisors to the Board. social, ethical and environmental practices. The Board may establish and terminate Board headspace is classified as a health promotion committees under clause 13.19 of the Constitution charity and is endorsed as a deductible gift Role of Individual Directors Board Primary Functions and advisory committees under clause 17 of the recipient and tax concession charity. and Responsibilities Constitution and set the terms of reference and Directors have a duty to question, request information, appoint the members of such committees. The Commonwealth of Australia through the raise any issue which is of concern to them, fully canvass ‹‹ Ensure compliance with the objects, purposes and Department of Health is the principal source all aspects of any issue confronting the company values of the headspace Group, and with its Constitution. The Board will establish committees to assist of funding for headspace operations. and cast their vote on any resolution according to ‹‹ Set or approve policies, plans and budgets to achieve the Board in exercising its authority. The headspace Group Governance Charter and the their own judgement. Directors will keep confidential objectives, and monitor performance against them. The Board has established the following following three documents form the foundations Board discussions, deliberations and decisions. ‹‹ Ensure that the organisation complies with all relevant standing committees: for the internal governance of headspace: Confidential information received by a director in the laws, regulations and regulatory requirements. ‹‹ Finance and Audit Committee (Board committee) course of the exercise of their duties remains the ‹‹ (a) The headspace Constitution Review the organisation’s budget, monitor ‹‹ Quality and Clinical Governance (b) The Members Agreement property of the company and it is improper to disclose management and financial performance to Committee (Board committee) it, or allow it to be disclosed, unless that disclosure ensure the solvency, financial strength and (c) The Commonwealth Grant Agreement ‹‹ has been properly authorised, or is required by law. good performance of the organisation. Remuneration Committee (All Board Members). “Youth Mental Health: headspace National” ‹‹ Consider and approve annual financial statements Board Evaluation The Board will regularly review the Governance Role of Youth Advisors to the Board and required reports to government. The Chair will, on an annual basis, facilitate a discussion Charter to ensure that it remains appropriate Each year, up to two young people who have served ‹‹ Set and maintain a framework of and evaluation of the Board’s performance. This will to the needs of headspace as it matures as a as members of the headspace Youth National delegation and internal control. company and to the community that it serves. include discussion both collectively and individually about: Reference Group will be invited to attend meetings ‹‹ Planning for Board, CEO and executive succession. of the Board. Youth Advisors participate in meetings ‹‹ The Board’s role, processes and performance; The Governance Charter will be publicly available ‹‹ Determine CEO and senior management remuneration. and posted on the headspace website. of the Board but are not directors of the Board. ‹‹ The Board’s group dynamics and skills set; and ‹‹ Set key accountabilities and performance ‹‹ Other relevant issues. Role of the Board Role of the Chief Executive Officer measures for the CEO and undertake, at least annually, a formal review of the CEO’s performance The Chair will consider the commissioning The role of directors is to collectively ensure the Accountable to the Board, the CEO is responsible against agreed performance measures. of an independent evaluation of the Board’s for managing the operations of the headspace delivery of the organisation’s objectives, to set strategic ‹‹ Review and monitor the effectiveness of risk performance at least every two years. Group to address key management and operational direction, and to uphold its values. Directors should management and compliance in the headspace Group issues within the direction and the policies laid collectively be responsible and accountable for ensuring and agree or ratify all policies and decisions on matters Conflicts of Interest and monitoring that the organisation is performing well, down by the Board. Responsibilities include: which might create significant risk, financial or otherwise. Directors have duties under section 425.25 ACNC is solvent, and is complying with all its legal, financial ‹‹ Acting as the primary spokesperson for the organisation. ‹‹ Consider the social, ethical and environmental and ethical obligations. The role of the Board includes: Regulation (governance standard 5 – duties of responsible ‹‹ Developing and implementing organisational impact of all activities and operations and entities), general law and the Constitution in relation ‹‹ Determine strategic direction of organisation. strategies and making recommendations to the ensure that these are acceptable. to conflicts of interest. In applying these provisions, Board on significant strategic initiatives. ‹‹ Appointment/dismissal of CEO. ‹‹ Continue to evaluate and improve the directors must also have regard to the findings and ‹‹ Monitor organisational performance. ‹‹ Setting and demonstrating the values and performance of headspace Group Boards. recommendations of the headspace probity advisor ‹‹ Manage risk. culture that underpin achievement of the and the conflict of interest requirements in any funding headspace vision and mission. agreement with the Commonwealth of Australia. ‹‹ Liaise and engage with stakeholders. Board Meetings ‹‹ Making the appointment of key management ‹‹ Demonstrate the value of headspace and ‹‹ The Board will hold not less than six meetings a A director’s interest in a matter involves a personal personnel in consultation with the Board, appointment monitor the culture of the organisation. year and such additional meetings as the directors interest of some real substance (Interest). and removal of other staff, determining terms of agree in order to perform its functions. Whether an Interest real or perceived exists depends Role of the Chair appointment, evaluation of performance, and developing and maintaining succession plans for staff. ‹‹ A quorum consists of more than half the number of directors. on the context. It may be a direct or indirect interest, a pecuniary interest or a non-pecuniary interest such The Chair: ‹‹ Providing leadership for the development of ‹‹ Wherever possible, 10 working days’ notice shall be as reputation, the opportunity to gain non-pecuniary ‹‹ Provides leadership to the Board. professional excellence and high standards given of the date, time and place of Board meetings. rewards such as expertise, knowledge or the opportunity of conduct for headspace Group staff. Where urgent matters arise, shorter notice may be given. ‹‹ Sets the agenda for Board meetings to influence policy decisions that may subsequently in consultation with the CEO. ‹‹ Developing the annual budget and managing ‹‹ Notice shall be given of meetings of any Board committees as laid out in the Terms of provide a pecuniary or non-pecuniary benefit. ‹‹ Chairs Board meetings. day to day operations within the budget. Reference, or (where this has not been specified ‹‹ Maintaining an effective risk management framework. ‹‹ Is the major point of contact between in the Terms of Reference) at the discretion the Board and the CEO. of the Chairs of those committees.

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directors’ report for the year ended 30 June 2019 consolidated The directors of headspace National Youth Mental Health Mission: headspace collaborates to design and Foundation Ltd (“the Company”) present their report deliver innovative ways of working with young people financial on the consolidated entity (referred to hereafter as “the to strengthen their mental health and wellbeing. Group”), consisting of headspace National Youth Mental The Group’s 2017–2020 strategy to achieve Health Foundation Ltd and the entities it controlled at these goals is described below: the end of, or during, the year ended 30 June 2019. report Our Approach Directors We create innovative models that enable young for the year ended 30 June 2019 The names of each person who has been a director people to seek help early to support their mental of the Company part of or during the whole of the health and wellbeing. Our approach evolves through financial year and up to the date of this report are: youth participation, best practice and evaluation. ‹‹ Ian Marshman AM (resigned 28 November 2018) Objectives: ‹‹ Patrick McGorry AO ‹‹ headspace provides a consistent experience for young ‹‹ Annette Carruthers people, family and friends aligned with our approach. headspace National ‹‹ Anne Murphy Cruise ‹‹ headspace service models and brand are Youth Mental Health innovative, youth friendly and high quality. ‹‹ Lisa Bjorksten (resigned 22 August 2018) Foundation Limited ‹‹ headspace seeks to reduce barriers for young people ‹‹ Katina Law ABN: 26 137 533 843 who are at a greater risk and less likely to seek help. ‹‹ John Harvey (appointed 7 May 2018) ‹‹ Lisa Paul AO PSM (appointed 8 October 2018) Our Services We are a trusted national brand delivering accessible Company Secretary services in centres, online and in schools to The following people held the position of young people, their family and friends. Company Secretary at the end of the year: Objectives: ‹‹ Shengnan (Diana) Liu: MCom CPA ‹‹ headspace centres and online services (resigned 7 November 2018) are high quality and accessible. ‹‹ Kerry Costanzo (appointed 28 November ‹‹ headspace builds the mental health literacy of the 2018, resigned 21 March 2019) community in places where young people are. ‹‹ Christopher Adam Holmes CPA ‹‹ headspace is a trusted provider of youth mental health (appointed 22 March 2019) services to schools and the education sector.

Principal Activities, Objectives and Our People Measures of Performance We value our people as our greatest asset. We attract The principal activities of the Group during the financial and retain great people who use their skills to make a year consisted of delivering mental health and vocational difference to the health and wellbeing of young people. services to young people in headspace centres, Objectives: online and to schools. We continued our national role ‹‹ headspace is a truly great place to work. which included licencing, accreditation and support ‹‹ headspace attracts and retains great role for the headspace centres, enhancing workforce people who make a difference. development, translating the evidence base through the headspace network, undertaking stigma reduction ‹‹ headspace enables our people to flourish and grow. awareness campaigns and improving health and ‹‹ headspace actively seeks to embed the perspectives mental health outcomes for young people in Australia. and practices of Australia’s First Peoples in all it does. The Group continued to administer service delivery at headspace Adelaide and the collocated headspace Adelaide Youth Early Psychosis Program through its wholly owned subsidiary headspace Services Limited. The vision of the Group is “all young Australians are supported to be mentally healthy and engaged in their communities.”

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 22 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 23 directors’ report directors’ report (continued) (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Our Partners Significant Changes in the State of Affairs Information on Directors We foster collaborative partnerships to improve In January 2019 the Commonwealth Government The following information is current as at the date of this report: mental health outcomes for young people announced an extension to funding for headspace’s and create positive system change. principal program for a further three years to 2023 Objectives: equating to $45 million. The eheadspace contract was Special ‹‹ headspace contributes to maintaining youth also extended for a further two years and a number Name Qualifications and Experience Responsibilities mental health as a key national priority. of smaller time limited projects were funded. ‹‹ headspace builds relationships to enhance The Commonwealth Government Department of Lisa Paul AO PSM ‹‹ Board member since 8 October 2018. Chair of Board services, increase access and drive innovation. Social Services announced two year funding from (appointed ‹‹ Lisa has been the Secretary of Federal Government ‹‹ headspace has a national network that 1 July 2019 of $2.4 million for the headspace Work 8 October 2018) departments between 2004 and 2016. She was first is connected and engaged. and Study program. This program was originally appointed Secretary of the Department of Education, funded as a pilot by the Department of Employment Science and Training by Prime Minister John Howard. Operating Results under the Empowering Youth Initiatives. She was reappointed Secretary of the Department of Education, Employment and Workplace Relations by The operations of the Group for the financial year The headspace Adelaide and headspace Adelaide Prime Minister Rudd, and reappointed by Prime Ministers resulted in a gain / loss of $956,229 (2018: loss Youth Early Psychosis Program services operated Julia Gillard, Tony Abbott and Malcolm Turnbull. $23,589,525). The surplus was mainly due to the timing by headspace Services Limited during the year were around the recognition of income versus program transferred to a third party Lead Agency at 30 June 2019. ‹‹ Lisa has joined the Boards of two listed companies, one expenses for non-government funded programs. No other significant changes in the Group’s state private company and the Federal Government’s Naval of affairs occurred during the financial year. Shipbuilding Advisory Board. She holds an Enterprise Contributions on Winding Up Professorship part-time at the University of Melbourne, is Matters Subsequent to the end a Counsellor of Bond University, and sits on the Boards of The Company is a not-for-profit organisation of the Financial Period several not-for-profits including Social Ventures Australia. incorporated as a company limited by guarantee. ‹‹ Lisa is a National Fellow of the Institute of Public If the Company is wound up, the liability of each There were no other matters or circumstances which Administration Australia, an Australian National University member is limited to a maximum of $100 towards have arisen since the end of the financial year which Policy Fellow, a Fellow of the Australian Institute of Company meeting any outstanding obligations of the Company. have significantly affected, or may significantly affect, Directors, a Fellow of the Australian Council for Educational The Company is precluded by its constitution from the operations of the Group, the results of those operations, Leaders, a Fellow of the Australian Institute of Management, recommending payment of any dividend. or the state of affairs of the Group in future financial years. a member of Chief Executive Women and a Fellow of the Australian and New Zealand School of Government. Review of Operations Likely Developments and Expected Results of Operations ‹‹ In 2011, Lisa was made an Officer of the Order of Australia During the financial year, the Group conducted its (AO). In 2003, Lisa was awarded a Public Service Medal activities in accordance with its funding agreement with There are no likely developments in the operations of the for coordinating the Federal Government’s domestic the Commonwealth of Australia through the Department Group which have not been disclosed within this report. response to the Bali bombings. In 2011, Lisa was awarded of Health. In addition, the Group has conducted a number Federal Government leader of the year by the Institute to of other programs, funded by both the Commonwealth of Environmental Regulation of Chartered Accountants. In both 2005 and 2007, Lisa’s Australia and other fund providers such as the Victorian The Group’s operations are not regulated by any Departments won the Australian Human Resource Institute’s and Queensland Governments and Beyond Blue. significant environmental regulation under a law of national award for excellence in people management. The Group is funded directly to operate programs such the Commonwealth or of a State or Territory. ‹‹ In May 2019, Lisa was appointed to the Board of Future as the Youth Online and Telephone Counselling Program Battery Industries Cooperative Research Centre. (eheadspace), headspace Work and Study and Be You service delivery as well as being the lead agency for one headspace centre and one headspace Youth Early Psychosis Program (hYEPP) service. headspace is a service delivery partner for Beyond Blue’s Be You initiative.

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 24 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 25 directors’ report directors’ report (continued) (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Information on Directors Information on Directors The following information is current as at the date of this report: The following information is current as at the date of this report:

Special Special Name Qualifications and Experience Responsibilities Name Qualifications and Experience Responsibilities

Ian Marshman AM ‹‹ Board member since 5 June 2009. Prior Chair of Board Patrick ‹‹ Board member since 5 June 2009. Member Quality (reappointed ‹‹ BA (Honours), LLB. Prior Member Quality McGorry AO ‹‹ AO, MD, BS, PhD, FRCP, FRANZCP, FAA, FASSA. and Clinical Governance 30 August 2016 ‹‹ LLD (Hons). and Clinical (reappointed ‹‹ Australian of the Year 2010. and resigned 28 Governance 30 August 2016) Committee ‹‹ Senior Advisor at the University of Melbourne. From ‹‹ Patrick is the Executive Director of Orygen, Professor November 2018) Committee 1999 to July 2015, he was the Senior Vice-Principal of Youth Mental Health at The University of Melbourne, at the University of Melbourne. In this role he was Prior Member and a Founding Director of the National Youth Mental Health accountable for the overall management and administration Finance and Audit Foundation (headspace). He is a world-leading researcher of the University. Ian had specific responsibilities Committee in the area of early psychosis and youth mental health. for planning and budgeting, major projects, audit, He has been directly involved in research and clinical care compliance and external reporting accountabilities. for homeless people, refugees and asylum seekers. ‹‹ Ian’s career began as an Administrator in the Australian ‹‹ Patrick’s work has played a critical role in the development Public Service in Canberra. He has held senior positions of safe, effective treatments for and innovative research in health at Commonwealth and State Government levels. into the needs of young people with emerging mental ‹‹ He was Chair of the Management Committee for Victorian disorders, notably psychotic and severe mood disorders. Tertiary Admissions Centre for 15 years until 2014. He has also played a major part in the transformational reform of mental health services to better serve the ‹‹ He was Chair of the Management Committee for Victorian needs of young people with mental ill health. Tertiary Admissions Centre for 15 years until 2014. ‹‹ Patrick was a key architect of the headspace model ‹‹ Ian is a current member of the Melbourne Theatre Company Board and chairs its Finance and Risk Committee. He serves and has been successful in advocating for its national as Chair of the Melbourne Teaching Health Clinics Ltd expansion. He has also led the design of and successfully and is President of the Queen’s College Council. He has advocated for the establishment of a national early previously served on the boards of several health services psychosis programme based on the Early Psychosis agencies and of a number of higher education companies. Prevention and Intervention Centre model. He is frequently asked to advise on early intervention and youth mental ‹‹ In 2017 Ian was appointed a Member of the Order of Australia. health policy both nationally and internationally. ‹‹ Chair of the Yea and District Memorial Hospital Board. ‹‹ Patrick has published over 800 scientific papers and eight books, and serves as Editor-in-Chief of the international journal Early Intervention in Psychiatry. He is a Fellow of the Australian Academy of Science, the Academy of the Social Sciences in Australia, and the Australian Academy of Health and Medical Science. He is the current President of the International Association of Youth Mental Health, and past President of the Society for Mental Health Research (2013-2017) and the Schizophrenia International Research Society (2016-2018).

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 26 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 27 directors’ report directors’ report (continued) (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Information on Directors Information on Directors The following information is current as at the date of this report: The following information is current as at the date of this report:

Special Special Name Qualifications and Experience Responsibilities Name Qualifications and Experience Responsibilities

Annette ‹‹ Board member since 30 August 2016. Chair Quality Katina Law ‹‹ Board member since 30 August 2016. Chair Finance and Carruthers ‹‹ MBBS (Honours), FRACGP, FAICD, GradDipAppFin. and Clinical (appointed ‹‹ B Com, CPA, MBA, GAICD. Audit Committee Governance (appointed ‹‹ Annette is an experienced non-executive director in financial 30 August 2016) ‹‹ Raised in the Kimberley region of Western Australia, Committee 30 August 2016) services, health, infrastructure and aged care. Current Katina is a finance and general management executive appointments include Director of Little Company of Mary and has worked extensively in executive roles Healthcare Ltd, Director of Catercare Pty Ltd and part-time across the mining sector in Australia, Asia, Africa, Member of the Superannuation Complaints Tribunal. Annette the United Kingdom and the United States. has qualifications in finance, superannuation and corporate ‹‹ Katina has wide-ranging board experience working governance and has a special interest in risk management. extensively with both large and small companies. ‹‹ Previous directorships include ASX listed nib Holdings, Katina currently serves as Chair of ASX listed AMP Capital’s Aged Care Investment Trust, Hunter Ardea Resources and Yandal Resources. Infrastructure and Investment Advisory Board, ‹‹ She is also an entrepreneur who has co-founded several National Heart Foundation (NSW Division), Hunter award winning Indigenous businesses including IPS Medicare Local, Hunter Area Health Service and the Management Consultants and Dutjahn Sandalwood NSW Board of the Medical Board of Australia. Oils. Katina is an active advocate with government and ‹‹ Medically trained, Annette continues to work part-time as corporates on behalf of Indigenous businesses. a General Practitioner. Her medical interests include clinical ‹‹ Katina also mentors Indigenous business people to risk management and quality improvement in health services. increase participation in the mainstream economy and is passionate about improving the lives of Indigenous people. Anne Murphy ‹‹ Board member since 30 August 2016. Member Finance Cruise ‹‹ LLB (Honours), MA (Honours), Dip. Ed (Honours), and Audit John Harvey ‹‹ Board member since 7 May 2018. Member Quality Committee (appointed BA (Honours), admitted as a Barrister and Solicitor (appointed ‹‹ MBA, PhD, BSc (Hons) Genetics, BSc, FAICD. and Clinical 30 August 2016) of the Supreme Court of Victoria. Governance 7 May 2018) ‹‹ John has had an extensive career as a board director Committee ‹‹ Anne is a senior lawyer at Macquarie Capital, specialising and brings a broad range of generalist skills and and Member in equity capital markets transactions. Prior to this Anne was experiences to the headspace boardroom. in private practice and has extensive experience in corporate Finance and Audit ‹‹ A scientist by trade, John worked as a researcher in governance, legal compliance and general corporate matters. Committee the health and agriculture sectors prior to managing ‹‹ Before commencing her career in the law, Anne was the Australian wine industry’s national research and a foreign language teacher at a number of Victorian development corporation as Executive Director. senior schools, teaching French and German. ‹‹ John is currently Chair of Adelaide based Can:Do Group ‹‹ Anne is also involved in sector mentoring across which provides services to children and young people various age groups and divisions at Macquarie who are vision or hearing impaired. He is Chair of Studio and participates in the diversity program and the Nine Architects, Deputy Chair of Rural Business promotion of young women in the workforce. Support, Non-Executive Director of the Australian Wine Research Institute and Revenir Winemaking as well as a Trustee for the Winston Churchill Memorial Trust (SA) and owner of his own wine company. He is also Advisory Board Chair of Stellan Capital.

There were no loans made to directors by the Group.

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 28 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 29 directors’ report directors’ report (continued) (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Meetings of Directors Auditor’s Independence Declaration The number of meetings of the Company’s Board of Directors and of each Board committee held The auditor’s independence declaration as required under section 307C of during the year ended 30 June 2019, and the number of meetings attended by each director were: the Corporations Act 2001 is set out immediately after the Directors’ Report. This report is made in accordance with a resolution of directors, pursuant headspace National to section 298(2) (a) of the Corporations Act 2001. Quality and Clinical Youth Mental Health Finance and Audit Board meetings Governance Committee Foundation Ltd Committee meetings meetings Director (Note 1)

Eligible Eligible Eligible Attended Attended Attended to attend to attend to attend

Lisa Bjorksten 0 1 n/a n/a n/a n/a

Lisa Paul AO PSM Katina Law Annette Carruthers 6 6 n/a n/a 4 4 Chair on behalf of the Directors Chair Finance and Audit Committee John Harvey 6 6 3 3 4 4 Wollongong NSW Wollongong NSW

Katina Law 6 6 5 5 n/a n/a

Ian Marshman AM 2 2 1 2 1 1 Dated this 16th day of October 2019

Patrick McGorry AO 6 6 n/a n/a 3 4

Anne Murphy Cruise 6 6 5 5 n/a n/a

Lisa Paul AO PSM 6 6 n/a n/a n/a n/a

Attendance at only the in camera section of a meeting is considered to be attendance by that director.

Non-Audit Services The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditors’ expertise and experience with the Group are important. There were non-audit services including cyber security training during the year. Details of the amounts paid or payable to the auditor (RSM Australia Partners) for audit services provided during the year are also set out in Note 17 to the financial report.

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contents

Financial Statements Page

Consolidated Statement of Profit or Loss and Other Comprehensive Income 32 Consolidated Statement of Financial Position 33 Consolidated Statement of Changes in Equity 34 Consolidated Statement of Cash Flows 35 Notes to the Consolidated Financial Statements 36 Directors’ Declaration 56 Independent Auditor’s Report to Members 57

Registered office Principal place These financial statements Level 2, 485 La Trobe Street of business are the consolidated financial Melbourne VIC 3000 Level 2, 485 La Trobe Street statements of the Group consisting Melbourne VIC 3000 of headspace National Youth Mental Health Foundation and its subsidiary, headspace Services Ltd. The financial statements are presented in the Australian currency, which is the Group’s functional and presentational currency. The Group is a not-for-profit unlisted public entity limited by guarantee, incorporated and domiciled in Australia. A description of the nature of the Group’s operations and its principal activities is included in the review of operations and activities in the Directors’ Report, which is not part of the financial statements. The financial statements were authorised for issue by the directors on 16 October 2019. The directors have the power to amend and reissue the financial statements.

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 32 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 33 consolidated statement consolidated of profit or loss and other financial position comprehensive income for the year ended 30 June 2019 for the year ended 30 June 2019

Continuing Operations Note 2019 2018 Note 2019 2018 $ $ Assets $ $ Revenue Current assets Revenue from services and Government grants 37,607,119 26,400,501 Cash assets 12,351,896 15,253,970 Interest 697,066 681,336 Other financial assets 4 22,606,360 22,147,881 Fundraising 1,349,015 773,926 Trade and other receivables 5 1,049,265 8,189,664 Other revenues from operating activities 7,404,449 1,157,438 36,007,521 45,591,515 Revenue from operating activities 2 47,057,649 29,013,201 Assets Held for Sale 22 2,591,541 – Total current assets 38,599,062 45,591,515 Operating Expenses Employment 25,289,912 20,700,303 Non-current assets Occupancy 2,340,837 2,468,106 Leasehold improvements, office equipment and motor vehicle 6 495,338 992,983 Grant payments 3,208,998 424,101 Total non–current assets 495,338 992,983 Consultancy 2,574,486 1,287,080 Total assets 39,094,400 46,584,498 Sub–contracts with member organisations 179,743 174,000 Governance 252,868 258,222 Travel 1,913,613 1,582,928 Liabilities Information and Technology 3,420,242 1,707,688 Current liabilities Communications and marketing 3,242,098 2,913,392 Trade and other payables 7 1,935,063 2,290,754 Depreciation and amortisation 3 756,732 642,255 Provisions 8 11,290,739 18,669,930 (Gain) on disposal of assets – – Deferred income 9 6,499,891 9,647,001 Provision for underspent grants 8 – 17,152,165 19,725,693 30,607,685 Other operating and administration expenses 2,724,954 3,294,846 Liabilities Directly Associated with Assets Held for Sale 22 2,559,675 – Expenses from operating activities 3 45,904,482 52,605,086 Total current liabilities 22,285,368 30,607,685

Surplus / (Deficit) before Income Tax 1,153,167 (23,591,885) Non-current liabilities Income tax expense 1f – – Provisions 8 555,898 679,908 Surplus / (Deficit) after income tax expense from Continuing Operations 1,153,167 (23,591,885) Total non-current liabilities 555,898 679,908 Total liabilities 22,841,266 31,287,593 Discontinued Operations Surplus / (Deficit) for the year from Discontinued Operations 22 (196,938) 2,360 Net assets 16,253,134 15,296,905 Surplus / (Deficit) for the year 956,229 (23,589,525) Surplus / (Deficit) for the year Attributable to Owners of the Parent 956,229 (23,589,525) Members’ Funds Accumulated surplus 10 16,253,134 15,296,905 Other comprehensive income Total members’ funds 16,253,134 15,296,905 Other comprehensive income, net of tax – – Total comprehensive income for the year 956,229 (23,589,525) The accompanying notes form part of these Financial Statements.

The accompanying notes form part of these Financial Statements.

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 34 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 35 consolidated statement consolidated statement of changes in equity of cash flows for the year ended 30 June 2019 for the year ended 30 June 2019

Accumulated Note 2019 2018 Note surplus Total $ $ $ $ Cash flows from operating activities Balance at 30 June 2017 38,886,430 38,886,430 Receipts from Government grants and other operations (incl GST) 55,209,457 38,836,455 Total comprehensive income for the year 10 (23,589,525) (25,589,525) Payments to employees and suppliers (incl GST) (56,336,734) (44,288,013) Balance at 30 June 2018 15,296,905 15,296,905 Interest received 703,419 691,549 Total comprehensive income for the year 10 956,229 956,229 Net cash outflow from operating activities 13(b) (423,858) (4,760,009) Balance at 30 June 2019 10 16,253,134 16,253,134

The accompanying notes form part of these Financial Statements. Cash flows from investing activities Payments for leasehold improvements and office equipment (660,185) (1,281,537) Net cash outflow from investing activities (660,185) (1,281,537)

Cash flow from financing activities Net cash inflow / (outflow) from financing activities – –

Net increase / (decrease) in cash and cash equivalents (1,084,043) (6,041,546) Cash and cash equivalents at the beginning of the financial year 37,401,851 43,443,397 Cash and cash equivalents at the end of the financial year 13(a) 36,317,808 37,401,851

The accompanying notes form part of these financial statements. The above Statement of Cash Flows includes cash flows from discontinued operations as detailed in Note 22.

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 36 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 37 notes to the financial notes to the financial statements statements (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Note 1: Summary of significant Subsidiaries are all entities (including special Note 1: Summary of significant removal or dismantling costs. Straight-line operating lease accounting policies purpose entities) over which the Group has the accounting policies (continued) expense recognition will be replaced with a depreciation The following is a summary of the material accounting power to govern the financial and operating policies Australian Accounting Standards and Interpretations that charge for the leased asset (included in operating costs) policies adopted by the Group in preparation of the so as to obtain benefits from its activities. have recently been issued or amended but are not yet and an interest expense on the recognised lease liability consolidated financial report. The accounting policies Subsidiaries are fully consolidated from the date on mandatory have not been early adopted by the Group (included in finance costs). The Group will adopt this have been consistently applied unless otherwise stated. which control is transferred to the Group. They are for the annual reporting period ended 30 June 2018. standard from 1 July 2019 and its impact on adoption is expected to result in a right-of-use asset of approximately de-consolidated from the date that control ceases. The Group’s assessment of the impact of these new Basis of preparation $3.1m and a corresponding lease liability of $3.1m. Intercompany transactions, balances and unrealised or amended Accounting Standards and Interpretations, gains on transactions between Group companies are The consolidated financial report is a general purpose most relevant to the Group, are set out below. Note 1 (d): Revenue Recognition financial report that has been prepared in accordance eliminated. Unrealised losses are also eliminated unless with Accounting Standards, Interpretations, and other the transaction provides evidence of the impairment AASB 15 Revenue from Contracts with Customers Revenue is measured at the fair value of the authoritative pronouncements of the Australian Accounting of the asset transferred. The accounting policies of the This standard contains a single model for contracts with consideration received or receivable. The Group Standards Board. headspace is a not-for-profit entity subsidiary are consistent with those adopted by the Group. customers based on a five-step analysis of transactions recognises revenue when the amount of revenue for the purpose of preparing the financial report. These for revenue recognition, and two approaches; a single can be reliably measured, it is probable that future general purpose financial statements have been prepared Note 1 (b): Functional and presentation currency time or over time, for revenue recognition and the economic benefits will flow to the Group and specific in accordance with Australian Accounting Standards Items included in the financial statements of each of the application date is from 1 January 2019 for not-for-profits. criteria have been met for each of the Group’s activities and Interpretations issued by the Australian Accounting Group’s entities are measured using the currency of the The changes in revenue recognition measurements in as described below. All revenue is stated net of the Standards Board and the Australian Charities and Not- primary economic environment in which the entity operates AASB 15 may cause changes to the timing and amount amount of applicable goods and services tax (GST). for-profits Commission Act 2012 (ACNC Act). The group (“the functional currency”). The consolidated financial of revenue recorded in the financial statements as well Revenue from services and Government grants is a not-for-profit entity for the purpose of preparing the statements are presented in Australian Dollars, which as additional disclosures. The impact of AASB 15 is not Revenue from Government grants is recognised when financial statements. The financial statements of the is the Group’s functional and presentation currency. expected to have a material impact on the Group. the Group has met all applicable milestones under Group comply with Australian Accounting Standards AASB 1058 Income for not for profit entities the grant agreement. Where there are no milestones Note 1 (c): New, revised or amending Accounting – Reduced Disclosure Requirements as issued by the applicable to a grant agreement, grants are recognised Standards and Interpretations adopted This standard clarifies and simplifies the income Australian Accounting Standards Board (AASB). as revenue upon obtaining control of the funds. by the Group recognition requirements that apply to not-for- Historical Cost Convention profit (NFP) entities, in conjunction with AASB 15 The Group has adopted all of the new, revised or When grant revenue is received whereby the Group incurs The financial report has been prepared on an accruals Revenue from Contracts with Customers. amending Accounting Standards and Interpretations an obligation to deliver economic value directly back to basis, is based on historical costs and does not take into issued by the Australian Accounting Standards Board This Standard supersedes all the income recognition the contributor, this is considered a reciprocal transaction account changing money values. Cost is based on the fair that are mandatory for the current reporting period. requirements relating to private sector NFP entities, and and the grant revenue is recognised as a liability until the value of the consideration given in exchange for assets. the majority of income recognition requirements relating service has been delivered to the contributor. Otherwise, The following Accounting Standard is most relevant Early Adoption of Standards to public sector NFP entities, previously in AASB 1004 the grant revenue is recognised as income upon receipt. for the Group: The Group has not elected to early adopt any accounting Contributions. The timing of income recognition depends Interest AASB 9 Financial Instruments standards for this reporting period (2018: None). on whether such a transaction gives rise to a liability or Interest revenue is recognised on a proportional The Group has adopted AASB 9 from 1 July 2018. The other performance obligation (a promise to transfer a good Critical accounting estimates and judgements basis taking into account the interest rates standard introduced new classification and measurement or service), or a contribution by owners, related to an asset applicable to the financial assets. The preparation of the financial report requires the use models for other financial assets. Other financial assets (such as cash or another asset) received by an entity. Fundraising of certain critical accounting estimates. It also requires are measured at amortised cost if it is held within a AASB 16 Leases management to exercise its judgement in the process business model whose objective is to hold assets in Donations received from fundraising events are AASB 16 sets out the principles for the recognition, of applying the Group’s accounting policies. The areas order to collect contractual cash flows which arise on recognised as revenue when received. measurement, presentation and disclosure of leases. involving a higher degree of judgement or complexity, or specified dates and that are solely principal and interest. areas where assumptions and estimates are significant The standard replaces AASB 117 ‘Leases’ and for lessees New impairment requirements use an ‘expected credit to the financial report is disclosed in Note 19. will eliminate the classifications of operating leases and loss’ (“ECL”) model to recognise an allowance. Impairment finance leases. Subject to exceptions, a ‘right-of-use’ Note 1 (a): Principles of consolidation is measured using a 12-month ECL method unless asset will be capitalised in the statement of financial the credit risk on a financial instrument has increased position, measured at the present value of the unavoidable The consolidated financial statements incorporate significantly since initial recognition in which case the future lease payments to be made over the lease term. the assets and liabilities of headspace National Youth lifetime ECL method is adopted. For receivables, a The exceptions relate to short-term leases of 12 months Mental Health Foundation Ltd (“the Parent Entity”) as simplified approach to measuring expected credit losses or less and leases of low-value assets (such as personal at 30 June 2019 and the results of its subsidiary for the using a lifetime expected loss allowance is available. computers and small office furniture) where an accounting year then ended. headspace National Youth Mental policy choice exists whereby either a ‘right-of-use’ Health Foundation Ltd and its subsidiary together are Impact of adoption asset is recognised or lease payments are expensed to referred to in this financial report as the Group. AASB 9 was adopted using the modified profit or loss as incurred. A liability corresponding to the retrospective approach and as such comparatives capitalised lease will also be recognised, adjusted for have not been restated. There was no impact on lease prepayments, lease incentives received, initial direct opening retained profits as at 1 July 2018. costs incurred and an estimate of any future restoration,

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 38 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 39 notes to the financial notes to the financial statements (continued) statements (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Note 1: Summary of significant Trade receivables are generally due for settlement Note 1: Summary of significant Cash flows are presented on a gross basis. The GST accounting policies (continued) within 30 days (2018: 30 days). They are presented as accounting policies (continued) components of cash flows arising from investing and current assets unless the collection is not expected financing activities which are recoverable from, or payable Note 1 (e): Expenses for more than 12 months after the reporting date. Note 1 (l): Employee entitlements to, the ATO are classified as operating cash flows. All expenditure is accounted for on an accruals The Company has applied the simplified approach Short-term obligations Commitments and contingencies are disclosed basis and has been classified under headings that to measuring expected credit losses, which uses Provision is made for the Group’s liability for employee net of the amount of GST recoverable from, aggregate all costs related to the category. a lifetime expected loss allowance. To measure entitlements arising from services rendered by employees or payable, to the tax authority. Grant payments the expected credit losses, trade receivables to the end of the financial year. Employee benefits Note 1 (n): Impairment of assets Payments payable to headspace Centres are recognised have been grouped based on days overdue. that are expected to be wholly settled within one year have been measured at the undiscounted amounts as a liability when the lead agency has performed the Other receivables are recognised at amortised cost, Assets are reviewed for impairment whenever events expected to be paid when the liability is settled. requirements placed on it under the grant agreement less any allowance for expected credit losses. or changes in circumstances indicate that the carrying with headspace. This includes, but is not limited to The liability for annual leave is recognised in the provision amount may not be recoverable. An impairment loss compliance with the grant agreement and the submission Note 1 (j): Leasehold improvements, for employee entitlements. All other short-term employee is recognised for the amount by which the asset’s of clinical and financial data in a prescribed form. The office equipment and motor vehicle benefit obligations are presented as other payables. carrying amount exceeds its recoverable amount. Company has an obligation to recognise an expense for The recoverable amount is the higher of an asset’s Leasehold improvements, office equipment and motor Other long-term employee benefit obligations this milestone, notwithstanding that payment may not vehicle are measured at cost or deemed cost on the fair value less costs to sell and value in use. The liability for long service leave and annual leave which actually occur until the Company physically receives the acquisition and are carried at cost less accumulated is not expected to be wholly settled within twelve months Note 1 (o): Parent entity financial information appropriate evidence that the milestone has been met. depreciation and any accumulated impairment. In the event after the end of the period in which the employees render that the carrying amount of leasehold improvements and The financial information for the parent entity, headspace Note 1 (f): Income tax the related service is recognised in the provision for office equipment is greater than the estimated recoverable National Youth Mental Health Foundation Ltd, as employee benefits and is measured at the present value The Company is exempt from income tax in amount, the carrying amount is written down immediately disclosed in Note 21 has been prepared on the same of expected future payments to be made in respect of accordance with endorsement by the Australian to the estimated recoverable amount and impairment basis as the consolidated financial statements. services provided by employees up to the end of the Taxation Office under Subdivision 50-B of the losses are recognised as an expense (note 1(n)). Income tax Assessment Act 1997. Accordingly, no reporting period. Consideration is given to expected Note 1 (p): Current and non-current classification The depreciable amount of all leasehold improvements provision/expense for income tax has been made. future wage and salary levels, experience of employee Assets and liabilities are presented in the statement and office equipment is calculated on a straight line basis departures and periods of service. Expected future of financial position based on current and non-current over their estimated useful lives to the Group commencing Note 1 (g): Leases payments are discounted using market yields at the end classification. from the time the asset is held ready for use, or, in the Lease payments for operating leases (note 12), of the reporting period based on corporate bonds with case of leasehold improvements, the shorter lease term. An asset is classified as current when: it is either expected where substantially all the risks and benefits terms to maturity and currency that match, as closely The depreciation rates used for each class of assets are: as possible, the estimated future cash outflows. to be realised or intended to be sold or consumed in remain with the lessor, are charged as expenses the consolidated entity’s normal operating cycle; it is (net of any incentives received from the lessee) The obligations are presented as current liabilities in the Class of fixed asset Depreciation rate held primarily for the purpose of trading; it is expected on a straight-line basis over the lease term. Consolidated Statement of Financial Position if the Group to be realised within 12 months after the reporting Lease income from operating leases where the Office equipment 25% – 100% does not have an unconditional right to defer settlement for period; or the asset is cash or cash equivalent unless group is a lessor is recognised in income on at least twelve months after the reporting date, regardless restricted from being exchanged or used to settle a Leasehold improvements 33⅓% – 100% a straight line basis over the lease term. of when the actual settlement is expected to occur. liability for at least 12 months after the reporting period. Motor Vehicle 25% – 100% Defined contribution superannuation expense All other assets are classified as non-current. Note 1 (h): Cash and cash equivalents Contributions made by the Group to employee A liability is classified as current when: it is either expected Cash and cash equivalents include cash on hand and The assets’ residual values and useful lives are reviewed, and superannuation funds are charged as expenses to be settled in the Group’s normal operating cycle; deposits at call with banks or financial institutions with adjusted if appropriate, at the end of each reporting period. when incurred. it is held primarily for the purpose of trading; it is due to original maturities of three months or less that are readily Gains and losses on disposals are determined by comparing be settled within 12 months after the reporting period; convertible to known amounts of cash and which are Note 1 (m): Goods and Services Tax (GST) proceeds from the sale with the carrying amount. These are or there is no unconditional right to defer the settlement subject to an insignificant risk of changes in value. included in the Consolidated Statement of Profit or Loss Revenues, expenses and assets are recognised of the liability for at least 12 months after the reporting Other financial assets include term deposits with fixed and Other Comprehensive Income as gain / (loss) on sale. net of GST, except where the amount of GST period. All other liabilities are classified as non-current. maturities of three months or greater that management incurred is not recoverable from the Australian Note 1 (q): Discontinued operations has a positive intention and ability to hold to maturity. Note 1 (k): Trade and other payables Taxation Office (“ATO”). In these circumstances, For the purposes of presentation in the Consolidated the GST is recognised as part of the cost of the A discontinued operation is a component of the Group Statement of Cash Flows, cash assets and other Trade and other payables represent the liability outstanding at the end of the financial year for goods and services acquisition of the asset or as part of the expense. that has been disposed of or is classified as held for sale financial assets equate to cash and cash equivalents. and that represents a separate major line of business received by the Group which remain unpaid benefits. Due Receivables and payables are shown inclusive or geographical area of operations, is part of a single Note 1 (i): Trade receivables to their short-term nature, they are measured at amortised of GST receivable or payable. The net amount of cost and are not discounted. The balance is recognised co-ordinated plan to dispose of such a line of business or Trade receivables are initially recognised at fair GST recoverable from, or payable to, the ATO is as a current liability with the amounts normally paid within area of operations, or is a subsidiary acquired exclusively value and subsequently measured at amortised included with other receivables or payables. 30 days of recognition of the liability (2018: 30 days). with a view to resale. The results of discontinued operations cost using the effective interest method, less are presented separately on the face of the statement any allowance for expected credit losses. of profit or loss and other comprehensive income.

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 40 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 41 notes to the financial notes to the financial statements (continued) statements (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Note 2: Revenues from continuing operations Note 4: Other financial assets

2019 2018 2019 2018 $ $ Current $ $ Operating activities from continuing operations Deposits at call 22,606,360 22,147,881 Grant income 37,607,119 26,400,501 Total other financial assets 22,606,360 22,147,881 Interest 697,066 681,336 (a) Risk exposure Fundraising 1,349,015 773,926 The Group’s exposure to risk is discussed in Note 18. The maximum exposure at the end of the Other revenues from operations 7,404,449 1,157,438 financial year is the carrying amount of the cash and cash equivalents noted above. Total revenues from continuing operations 47,057,649 29,013,201

Note 5: Trade and other receivables Revenue for the financial year includes funding under agreements with the Commonwealth of Australia primarily as represented by the Department of Health, Federal and State Government bodies and grant funding from subcontractor agreements. The Group has deferred Government grant revenue of $6.5m as disclosed in Note 9. Other revenues from 2019 2018 operations included $6.4m related to reversals from the prior year provisions (refer to note 8 for further details). Current $ $ Trade and other receivables 272,793 6,445,950

Note 3: Expenses from operating activities GST receivable – – Prepayments 776,472 1,743,714 2019 2018 Total trade and other receivables 1,049,265 8,189,664 $ $ Majority of trade receivables represents outstanding payments owing by Primary Health Networks Expenses from operating activities have been determined after: at 30 June 2019. Depreciation (a) Allowance for expected credit losses Leasehold improvements 239,155 531,952 There are no losses recognized in the profit or loss in respect of expected credit losses for the year ended 30 June 2019 (2018: $nil). Office equipment 517,577 110,303 (b) Past due but not provided for As at 30 June 2019, trade receivables of $1,500 (2018: $341,608) were past due but not provided for. Total depreciation and amortisation 756,732 642,255 (c) Risk exposure The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of Rental expense relating to operating leases – minimum lease payments 1,692,585 1,485,434 receivables mentioned above. Refer to Note 18 for more information on the Group’s risk management policy. Superannuation expense 2,016,521 1,493,081 (d) Fair value Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value.

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 42 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 43 notes to the financial notes to the financial statements (continued) statements (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Note 6: Leasehold improvements, office equipment and motor vehicle Note 6: Leasehold improvements, office equipment and motor vehicle (continued)

Note 6 (a): Leasehold improvements Note 6 (d): Movements in carrying amounts

2019 2018 Leasehold Office Motor improvements equipment Vehicle Total $ $ $ $ $ $ Leasehold improvements at cost 1,448,364 2,667,670 Carrying amount as at 30 June 2017 443,116 229,143 – 672,259 Less accumulated depreciation (1,303,366) (2,220,792) Additions 753,797 527,740 – 1,281,537 Total leasehold improvements 144,998 446,878 Disposals – – – – Depreciation (750,035) (210,778) – (960,813)

Note 6 (b): Office equipment Carrying amount as at 30 June 2018 446,878 546,105 – 992,983 Back out discontinued operations (218,084) (99,174) (317,258) 2019 2018 Additions 155,359 420,986 – 576,345 $ $ Disposals – – – – Office equipment at cost 1,872,438 3,036,754 Depreciation (239,155) (517,577) – (756,732) Less accumulated depreciation (1,522,098) (2,490,649) Carrying amount as at 30 June 2019 144,998 350,340 – 495,338 Total office equipment 350,340 546,105

Note 6 (c): Motor Vehicle Note 7: Trade and other payables

2019 2018 2019 2018 $ $ Current $ $ Motor vehicle at cost – 79,976 Trade payables 70,620 55,352 Less accumulated depreciation – (79,976) GST payable 682,831 382,284 Total Motor Vehicle – – Other payables 1,181,613 1,853,118 Net book amount 495,338 992,983 Total trade and other receivables 1,935,063 2,290,754

Refer to Note 18 for further information on financial instruments.

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 44 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 45 notes to the financial notes to the financial statements (continued) statements (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Note 8: Provisions Note 9: Deferred income As noted in prior year, the Group had recognised $17m in provision for underspent grants that are payable back to the Department of Health (the Department) or other funding organisations. The Department has since 2019 2018 advised that some of these funds can be used to fund programs in the reporting period. Consequently, the Current $ $ Group has reversed $6.4m in provision to Other Income for financial year ended 30 June 2019. The balance of unspent funds at 30 June 2019 which is expected to be returned to the Department is $9.5m. headspace Deferred income 6,499,891 9,647,001 is currently in discussions with the Department regarding alternative means of expending available funds. Total deferred income 6,499,891 9,647,001

2019 2018 Current $ $ Employee entitlements – annual leave 1,278,851 1,236,651 Note 9: Deferred income Employee entitlements – long service leave 512,734 281,114 Movements in accumulated surplus were as follows: Provision for underspent grants 9,499,154 17,152,165 11,290,739 18,669,930 2019 2018 $ $

Non-current Balance as at 1 July 15,296,905 38,886,430 Employee entitlements – long service leave 555,898 679,908 Surplus / (deficit) after income tax expense for the year 956,229 (23,589,525) Total provisions 11,846,637 19,349,838 Balance as at 30 June 16,253,134 15,296,905

The following amounts reflect leave that is expected to be taken or paid within the next 12 months: Note 11: Members’ guarantee The Company is limited by guarantee. If the Company is wound up the liability of each 2019 2018 member is limited to a maximum of $100 towards meeting any outstanding obligations $ $ of the Company. At 30 June 2019 the number of members was 5 (2018: 5). Current leave obligations expected to be wholly settled 1,791,585 1,517,765 within 12 months Total trade and other receivables Note 12: Commitments Operating Leases The Group leases various office equipment and office accommodation under leases which have varying terms and renewal rights. On renewal, the terms of the leases are renegotiated. Minimum lease payments 2019 2018 $ $ Within one year 1,735,395 2,825,193 Later than one year and not later than five years 1,429,891 – 3,165,286 2,825,193

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 46 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 47 notes to the financial notes to the financial statements (continued) statements (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Note 13: Cash flow information Note 15: Contingencies

Note 13 (a): Reconciliation of cash Contingent assets Cash at the end of the financial year as shown in the Consolidated Statement of Cash Flows is reconciled The Group does not have any contingent assets of a material nature which have not already been to the related items in the Consolidated Statement of Financial Position as follows: dealt with in these financial statements (2018: Nil). Contingent liabilities 2019 2018 The consolidated entity has given bank guarantees as at 30 June 2019 of $539,938 $ $ (2018: $508,653) to various landlords for commercial leases. Cash Assets 12,351,896 15,253,970 Other Financial assets – Note 4 22,606,360 22,147,881 Note 16: Related party disclosures

Cash included within Assets Held for Sale 1,359,552 – Note 16 (a): Key management personnel compensation Cash and cash equivalents 36,317,808 37,401,851 The aggregate compensation made to directors, officers and other key management personnel of the Group is as follows:

2019 2018 Note 13 (b): Reconciliation of cash flow from operating activities Key management personnel benefits $ $ with surplus / (deficit) for the year Compensation to key management 1,949,548 2,213,100

2019 2018 1,949,548 2,213,100 $ $ Surplus / (Deficit) after income tax expense for the year 956,229 (23,589,525) Note 16 (b): Directors’ remuneration The names of the Group directors who have held office during the Non–cash flows financial year are reported in the Directors’ Report. Depreciation 1,157,445 960,813 Directors do not receive any additional fees for membership of Board sub-committees. Disposals / Write off of assets 385 – Note 16 (c): Transactions by Directors with headspace centres Changes in operating assets and liabilities Patrick McGorry AO is a Director of Orygen. The Group has entered into a sub-lease agreement with Decrease / (Increase) in trade and other receivables 5,947,929 (5,832,264) Orygen in relation to letting unoccupied office floor space to Orygen situated at 485 La Trobe Street Increase / (Decrease) in trade and other payables 235,225 (233,786) in Melbourne. During the financial year, payments received or receivable of $131,186 (2018: $261,404) have been received by the Group from Orygen for sub-lease income. (Decrease) / Increase in provisions (5,573,961) 17,714,067 The Group also has entered into a staff secondment agreement with Orygen in relation to (Decrease) / Increase in deferred income (3,147,110) 6,220,686 seconding an employee to Orygen for research work. During the financial year, payments received Net cash (used in) / from operating activities (423,858) (4,760,009) or receivable of $43,444 (2018: $27,860) have been received by the Group from Orygen. During the financial year, $657,910 (2018: $38,067) have been paid by the Group to Orygen in the form of grants. The above reconciliation includes cash flows from discontinued operations as detailed in Note 22. Note 16 (d): Transactions with Centre of Excellence The Group maintains a Centre of Excellence to provide research services. Orygen is the subcontractor Note 14: Economic dependence for the Centre of Excellence. Patrick McGorry AO is a Director of Orygen. During the financial year, The continuing operation of the Group is dependent upon periodic renewal of funding agreements payments were made by the Group or were payable to Orygen for the Centre of Excellence totalling with the Commonwealth of Australia as represented by the Department of Health. The Group operates $414,681 (2018: $517,604). $179,743 (2018: $204,188) remained outstanding at year end. under a two-year grant agreement expiring 30 June 2020 to operate the headspace National Office. Note 16 (e): Subsidiaries Interests in subsidiaries are set out in Note 20.

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 48 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 49 notes to the financial notes to the financial statements (continued) statements (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Note 17: Remuneration of the audit and non-audit services Note 18: Financial Risk Management Details of the amounts paid or payable to the lead auditor’s firm for audit and non- The Group’s activities expose it to a variety of financial risks: market risk (including interest rate audit services provided during the financial year are set out below. risk), credit risk and liquidity risk. The Group’s overall treasury risk management policy focuses on minimising credit risk. The Group uses different methods to measure different types of risk to which it 2019 2018 is exposed during the year. These methods include sensitivity analysis in the case of interest rate risk and aging analysis (external debtors) and credit rating agency data (term deposits) for credit risk. Audit and Non-audit Services $ $ Risk management is carried out by senior management under policies approved by the Audit and review of financial report 73,090 71,180 Finance and Audit Committee. The Finance and Audit Committee has been delegated the Cyber security audit services – 25,000 responsibility for oversight of treasury activities by the Board of Directors. The Committee Cyber security training 4,000 3,00 approves written policies for overall treasury risk management, as well as policies and procedures covering specific areas such as credit risk and investment of excess funds. Total audit and non-audit services 77,090 99,180 The Group holds the following financial instruments at the end of the financial year.

Office Motor Note equipment Vehicle Financial Assets $ $ Cash assets 12,351,896 15,253,970 Other financial assets 4 22,606,360 22,147,881 Trade and other receivables (excl prepayments) 5 1,049,265 8,189,664 Total financial assets 36,007,521 45,591,515

Financial Liabilities $ $ Trade and other payables 7 1,935,063 2,290,754 Provision for underspent grants 8 9,499,154 17,152,165 Total financial liabilities 11,434,217 19,442,919

Note 18 (a): Market risk (i) Interest rate risk Exposure to interest rate risk arises on financial assets recognised at the end of the financial year whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate instruments. (ii) Price Risk / foreign currency The Group is not exposed to any significant foreign currency/price risk. (iii) Sensitivity Analysis The Directors consider that there is minimal interest rate risk, since there are no long term borrowings or interest bearing credit held by the Group. Interest rate risk is incurred on cash and cash equivalents earning interest in bank accounts and term deposits. If these movements were to occur, the impact on the Consolidated Statement of Profit and Loss and Other Comprehensive Income for each category of financial instrument held at the end of the financial year is presented below. This assumes that all other assumptions are held constant.

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 50 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 51 notes to the financial notes to the financial statements (continued) statements (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Note 18: Financial Risk Management (continued) Note 18: Financial Risk Management (continued)

Note 18 (c): Liquidity risk Interest Rate Risk Prudent liquidity risk management implies maintaining sufficient cash for both short-term commitments 2019 Carrying Amount +100bps -100bps and longer-term commitments through contracts. The Group manages liquidity risk by regularly monitoring the forecast and actual cash flows and matching cash availability to these requirements. Financial Assets $ $ $ Surplus cash at bank is invested only in cancellable term deposits, the amount based on cash Cash assets 12,351,896 71,088 (71,088) flows incorporating working capital requirements. The Group has no borrowing facilities. Other financial assets 22,606,360 226,064 (226,064) The Group is predominantly funded by The Departments of Health, current funding agreement has an expiry date of 30 June 2020. The Group pursues other sources of revenue, including third-party grants. Trade and other receivables (excl. prepayments) 1,049,265 Maturities of financial liabilities The table below discloses the Group’s financial liabilities into relevant maturity Financial Liabilities groupings based on their contractual maturities for non-derivative financial Trade and other payables 1,935,063 – – liabilities. The Group does not deal in derivative financial instruments. Provision for underspent grants 9,499,154 – – The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within twelve months equal their carrying balances as the impact of discounting is not significant. Total increase / decrease 297,152 (297,152)

Total Carrying Less than contractual amount of Interest Rate Risk 2019 6 months 6 – 12 months cash flows liabilities 2018 Carrying Amount +100bps -100bps $ $ $ $

Financial Assets $ $ $ Contractual maturities of financial liabilities Cash assets 15,253,970 131,869 (131,869) Trade and other payables 1,935,063 – 1,935,063 1,935,063 Other financial assets 22,147,881 119,567 (119,567) Provision for underspent grants 9,499,154 – 9,499,154 9,499,154 Trade and other receivables (excl. prepayments) 8,189,664 Total Carrying Less than contractual amount of Financial Liabilities 2018 6 months 6 – 12 months cash flows liabilities Trade and other payables 2,290,754 – – $ $ $ $ Provision for underspent grants 17,152,165 – – Contractual maturities of financial liabilities Total increase / decrease 251,436 (251,436) Trade and other payables 2,290,754 – 2,290,754 2,290,754 Provision for underspent grants 17,152,165 – 17,152,165 17,152,165 Note 18 (b): Credit risk Credit risk arises from credit exposures to outstanding receivables. Note 18 (d): Fair value estimation The Directors consider that the credit risk associated with Government funding receivable is Given the nature of the Group’s financial instruments, no fair value estimations are low, since all revenue is under contract subject to the Group meeting certain criteria as laid out necessary. The carrying values (less any impairment provision) of financial assets and in the Government funding agreements. The Group is required to report its quarterly financial financial liabilities approximate their fair values due to their short-term nature. status to Government, within a detailed reporting framework. This allows the Government to review the application of all funding against the approved key milestones. The outstanding debtors balance in the Group primarily consists of amounts owing from Primary Healthcare Networks or where contracts are in place for the provision of service. As such there is a high level of certainty regarding the collection of the receivable as at the end of the financial year.

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 52 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 53 notes to the financial notes to the financial statements (continued) statements (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Note 19: Critical accounting estimates and assumptions Note 21: Parent entity financial information

Estimates and judgements are continually evaluated and are based on historical experience Note 21 (a): Summary financial information and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances. 2019 2018

Note 19 (a): Critical accounting estimates and assumptions $ $ The Group makes estimates and assumptions concerning the future. The resulting accounting Balance sheet estimates will, by definition, seldom equal the related actual results. The estimates and Current assets 36,007,520 40,956,580 assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: Total assets 36,502,859 41,632,303 (i) Provision for underspent grants The provision for underspent grants requires a degree of estimation and judgement. Current liabilities 19,725,693 25,736,484 The level of provision is assessed by taking into account actual unspent balances on hand Total liabilities 20,281,591 26,564,203 at 30 June 2019, as well as latest discussions and agreements with the grant funders. (ii) Leasehold improvements, office equipment and motor vehicle useful lives Members funds Leasehold improvements, office equipment and motor vehicle are measured at cost or deemed cost on acquisition. Management believes that the assigned useful lives, Accumulated surplus 16,221,268 15,068,100 as well as the underlying assumptions, are reasonable, though different assumptions Surplus / (Deficit) for the period 1,153,167 (19,444,087) and assigned lives could have a significant impact on the carrying amounts. (iii) Long service leave Total comprehensive income 1,153,167 (19,444,087) As discussed in Note 1, the liability for long service leave expected to be settled more than 12 months from reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at reporting date. In determining the present value Note 21 (b): Contingencies of the parent entity of the liability, estimates of attrition rates and pay increases have been taken in to account. The parent entity had neither any contingent assets nor liabilities as at 30 June 2019 or 30 June 2018. Note 19 (b): Critical judgements in applying the Group’s accounting policies (i) Revenue recognition The Group has recognised revenue from grant contributions when it obtains control of the grant, or the right to receive the grant. This is generally when the Group has met all applicable milestones under the relevant grant agreement and is not necessarily upon cash receipt. The Group in applying this accounting policy accepts that in doing so revenue will be recognised covering programs or periods of time where related expenditure has been delayed or will occur in a future period.

Note 20: Subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of headspace Services Ltd in according with the accounting policy described in note 1(a):

Country of Name of Entity Incorporation Type of Entity Holding 2019 (%) 2018 (%) Company limited headspace Services Ltd Australia 100 100 by guarantee

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 54 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 55 notes to the financial notes to the financial statements (continued) statements (continued) for the year ended 30 June 2019 for the year ended 30 June 2019

Note 22: Discontinued Operations and Assets Held for Sale Note 22: Discontinued Operations and Assets Held for Sale (continued) At 30 June 2019 the Group ceased operating the headspace Adelaide and headspace hYEPP Adelaide Carrying amounts of assets and liabilities disposed businesses under a Transfer of Business agreement to a third party Lead Agency for nil consideration. 2019 Financial Performance Information $

2019 2018 Assets $ $ Cash and cash equivalents 1,256,773 Revenue 8,052,956 5,877,401 Other financial assets 102,779 Trade and other receivables 1,231,989

Expenses Total Assets 2,591,541 Employment Expenses 6,205,282 4,469,174 Occupancy Expenses 505,247 531,898 Liabilities Depreciation Expenses 400,716 318,559 Trade and other payables 630,434 Travel Expenses 262,107 273,436 Provisions 1,929,241 Comms & Marketing Expenses 20,517 167,851 Deferred income – Other Expenses 856,025 114,123 Total Liabilities 2,559,675 8,249,894 5,875,041 Net assets 31,866

Surplus / Deficit for the year (196,938) 2,360 Income Tax Expense – – Note 23: Events after the reporting period No matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly Surplus from Discontinued Operations (196,938) 2,360 affect the Groups operations, the result of the operations, or the Groups state of affairs in future financial years.

2019 2018 Note 24: Group details $ $ The Company and its subsidiary are Companies limited by guarantee, incorporated and domiciled in Australia. Cash Flows from Discontinued Operations The registered office and principal place of business of the Group is: Operating Activities 1,040,740 (2,285,500) Level 2, 485 La Trobe Street, Melbourne, Victoria 3000 Investing Activities (83,840) – Financing Activities – – Net increase/(decrease) in cash and cash equivalents from 956,900 (2,285,500) discontinued operations

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 56 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 57 directors’ declaration for the year ended 30 June 2019

Directors’ Declaration The directors of the Company declare that in the opinion of the directors: (a) the attached financial statements and notes thereto are in accordance with the Australian Charities and Not-for-profits Commission Act 2012, and: (i) give a true and fair view of the financial position as at 30 June 2019 and of the performance for the year then ended of the consolidated group; and (ii) comply with Australian Accounting Standards, including the Interpretations; and (b) in the directors’ opinion there are reasonable grounds to believe that the consolidated group will be able to pay its debts as and when they become due and payable. Signed in accordance with subsection 60.15(2) of the Australian Charities and Not-For-Profit Commission Regulation 2013. On behalf of the Directors

Lisa Paul AO PSM Katina Law Chair on behalf of the Directors Chair Finance and Audit Committee

Dated this 16th day of October 2019

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 58 headspace Annual Report 2018 – 2019 headspace Annual Report 2018 – 2019 59

headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace National Youth Mental Health Foundation | ABN 26 137 533 843 headspace would like to acknowledge Aboriginal and Torres Strait Islander peoples as Australia’s First People and Traditional Custodians. We value their cultures, identities, and continuing connection to country, waters, kin and community. We pay our respects to Elders past and present and are committed to making a positive contribution to the wellbeing of Aboriginal and Torres Strait Islander young people, by providing services that are welcoming, safe, culturally appropriate and inclusive.

headspace is committed to embracing diversity and eliminating all forms of discrimination in the provision of health services. headspace welcomes all people irrespective of ethnicity, lifestyle choice, faith, sexual orientation and gender identity.

headspace centres and services operate across Australia, in metro, regional and rural areas, supporting young Australians and their families to be mentally healthy and engaged in their communities.

headspace National Youth Mental Health Foundation is funded by the Australian Government Department of Health ABN 26 137 533 843