Annual Report 2011 - parliament.vic.gov.au · ABN: 27 241 053 246 TOID: 3044 CRICOS No: 00011G...

Annual Report 2011Financial Report 2011

The Financial Report 2011

© The Gordon 2012

Published by: The Gordon Marketing Department

Private Bag 1 Geelong Mail Centre Victoria, Australia 3221 Ph: (03) 5225 0631 Email: [email protected]

ABN: 27 241 053 246 TOID: 3044 CRICOS No: 00011G

Publications Coordinator: Chrissy Meddings Design and layout: Samantha Trask and Deirdre Carmichael

The Financial Report 2011 and previous reports are available online at thegordon.edu.au

Printed April 2012

Gordon Institute of TAFEFor ThE yEAr EndEd 31 dEcEmbEr 2011

FIN 2 The Gordon Financial Report 2011

The Gordon Financial Report 2011 FIN 3

Declaration

FINANCIAL REPORT FOR YEAR ENDED 31 DECEMBER, 2011

DECLARATION BY PRESIDENT OF THE BOARD

CHIEF EXECUTIVE OFFICER AND CHIEF FINANCE AND ACCOUNTING OFFICER

We certify that the attached financial statements for the Gordon Institute of TAFE has been prepared in accordance with Standing Direction 4.2 of the Financial Managment Act 1994, applicable Financial Reporting Directions issued under that legislation, Australian Accounting Standards and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and notes to and forming part of the financial statements, presents fairly the financial transactions during the year ended 31 December 2011 and financial position of the Institute as at 31 December 2011.

At the date of signing these financial statements, we are not aware of any circumstance that would render any particulars included in the financial statements to be misleading or inaccurate. There are reasonable grounds to believe that the Institute will be able to pay its debts as and when they became due and payable.

The President of the Board and the Chief Executive Officer sign this declaration as delegates of, and in accordance with a resolution of, the Board of the Gordon Institute of TAFE.


6

Comprehensive Operating Statement - Gordon Institute of TAFEfor the year ended 31 December 2011

2011 2010

Note $'000 $'000

Continuing operations

Income from transactions

Government contributions - operating 2(a)(i) 80,310 54,085

Government contributions - capital 2(a)(ii) 3,926 10,241

Sale of goods and services 2(b) 13,343 13,882

Interest 2(c) 1,322 946

Other income 2(d) 1,088 918

Total income from transactions 99,989 80,072

Expenses from transactions

Employee benefits 3(a) 61,823 48,701

Depreciation and amortisation 3(b) 4,554 3,993

Expenditure using Government contributions - capital 496 1,082

Other operating expenses 3(c) 14,898 14,864

Total expenses from transactions 81,771 68,640

Net result from transactions (net operating balance) 18,218 11,432

Other economic flows included in net result

Net gain/(loss) on non-financial assets 4(a) (651) 36

Other gains/(losses) from other economic flows 4(b) (354) (15)

Total other economic flows included in net result (1,005) 21

Net result 17,213 11,453

Other economic flows – other non-owner changes in equity

Changes in physical asset revaluation surplus 15.2 - 2,634

Total other economic flows – Other non-owner changes in equity - 2,634

Comprehensive result 17,213 14,087

The above comprehensive operating statement should be read in conjunction with the accompanying notes.

Institute


7

Balance Sheet - Gordon Institute of TAFEas at 31 December 2011

2011 2010

Note $'000 $'000

Assets

Financial assets

Cash and deposits 5 36,135 14,094

Receivables 6 3,421 8,924

Investments, loans and other financial assets 7 8,794 4,500

Total financial assets 48,350 27,518

Non-financial assets

Inventories 8 336 329

Other non-financial assets 9 811 708

Property, plant and equipment 10 120,682 121,430

Intangible assets 11 1,979 1,529

Total non-financial assets 123,809 123,996

Total assets 172,159 151,515

Liabilities

Payables 12 6,126 5,094

Provisions 13 9,327 8,276

Other liabilities 14 1,572 222

Total liabilities 17,025 13,593

Net assets 155,135 137,922

Equity

Accumulated surplus/(deficit) 15.1(b) 66,100 48,810

Reserves 15.1(c) 78,730 78,808

Contributed capital 15.1(a) 10,305 10,305

Net worth 155,135 137,922

Commitments for expenditure 17 4,760 400

Contingent assets and contingent liabilities 18 - -

The above balance sheet should be read in conjunction with the accompanying notes.

Institute


8

Statement of Changes in Equity - Gordon Institute of TAFEfor the year ended 31 December 2011

Equity at 1 Jan 2011

Total Comprehensive

resultTransfers

Equity at 31 Dec 2011

Note $'000 $'000 $'000 $'000

Accumulated surplus/(deficit) 15.1 (b) 48,809 17,213 - 66,022

Transfers (to)/from reserves 15.1 (b) - - 78 78

Accumulated surplus/(deficit) at the end of the year 48,809 17,213 78 66,100

Contributions by owners

Contributed capital 15.1 (a) 10,305 - - 10,305

Contribution by owners at the end of the year 10,305 - - 10,305

Reserves

Physical assets revaluation reserve 15.1 (c) 77,439 - - 77,439

Other - Special and General Purpose Reserves 15.1 (c) 1,369 - (78) 1,291

Total reserves 78,808 - (78) 78,730

Total equity at the end of the year 137,922 17,213 0 155,135


Total Comprehensive

resultTransfers


Note

Accumulated surplus/(deficit) 15.1 (b) 37,427 11,453 - 48,880

Transfers (to)/from reserves 15.1 (b) - - (71) (71)

Accumulated surplus/(deficit) at the end of the year 37,427 11,453 (71) 48,809

Contributed capital 15.1 (a) 10,305 - - 10,305

Contribution by owners at the end of the year 10,305 - - 10,305

Reserves

Physical assets revaluation reserve 15.1 (c) 74,805 2,634 - 77,439

Other - Special and General Purpose Reserves 15.1 (c) 1,298 - 71 1,369

Total reserves 76,103 2,634 71 78,808

Total equity at the end of the year 123,835 14,087 - 137,922

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

Changes due to

Changes due to


9

Cash Flow Statement - Gordon Institute of TAFEfor the year ended 31 December 2011

2011 2010

Note $'000 $'000

Cash flows from operating activities

Receipts

Government contributions - operating 87,092 48,677

Government contributions - capital 3,926 10,241

User fees and charges received 13,567 13,991

Goods and services tax recovered from the ATO 5,909 2,643

Interest received 1,322 946

Other receipts 989 668

Total receipts 112,805 77,166

Payments

Payments to suppliers and employees (76,112) (62,280)

Goods and services tax paid to the ATO (5,384) (2,495)

Other payments (66) (1,047)

Total payments (81,562) (65,822)

Net cash provided by/(used in) operating activities 31,243 11,344

Cash flows from investing activities

Redemption available for sale of financial assets 4,000 1,445

Payments for sale of financial assets (8,294) (3,000)

Payments for non-financial assets 10 (4,289) (9,053)

Payments for Intangible Assets 11 (864) (910)

Proceeds from sale of non- financial assets 245 84

Net cash provided by/(used in) investing activities (9,202) (11,434)

Cash flows from financing activities - -

Net cash provided by/used in financing activities - -

Net increase (decrease) in cash and cash equivalents 22,041 (90)

Cash and cash equivalents at the beginning of the financial year 14,094 14,184

Cash and cash equivalents at the end of the financial year 5 36,135 14,094

Financing arrangements and non-cash financing and investing activities - -

The above cash flow statement should be read in conjunction with the accompanying notes.

Institute


10

Notes to the Financial Statements - Gordon Institute of TAFEfor the year ended 31 December 2011

CONTENTS

Note Accompanying Note

1 Statement of significant accounting policies 11

2 Income from transactions 19

3 Expenses from transactions 20

4 Other economic flows included in net result 21

5 Cash and deposits 21

6 Receivables 22

7 Investments, loans and other financial assets 22

8 Inventories 23

9 Other non-financial assets 23

10 Property, plant and equipment 24

11 Intangible assets 25

12 Payables 25

13 Provisions 26

14 Other liabilities 26

15 Equity 27

16 Cash flow information 28

17 Commitments 28

18 Contingent Assets and Contingent Liabilities 28

19 Economic dependency 29

20 Events occurring after the balance sheet date 29

21 Remuneration of auditors 29

22 Superannuation 29

23 Key management personnel disclosures 30

24 Related parties 32

25 Institute details 32

26 Financial instruments (Part I - V) 33



NOTE 1

Statement of significant accounting policies

1.01

Compliance with IFRSs

1.02

(a) the notion of:

(b) references to equity holders as owner.

Comprehensive Operating Statement

Balance sheet

Items of assets and liabilities in the balance sheet are:

ran ed in liquidity order

aggregated into financial and non-financial assets

non-financial physical assets which, subsequent to acquisition, are measured at a revalued amount being their fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are made with sufficient regularity to ensure that the carrying amounts do not materially differ from their fair value

the fair value of an asset other than land is generally based on its depreciated value

Statement of compliance

The financial statements have not been consolidated with the controlled entity of the Institute because the transactions and balances do not materially impact on the financial statements of the Institute.

These general purpose financial statements have been prepared in accordance with the Financial Management Act 1994 (FMA) and applicable Australian Accounting Standards (AAS) which include Interpretations, issued by the Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements of the AASB 1049 Whole of Government and General Government Sector Financial Reporting.

Where appropriate, those AAS paragraphs applicable to not-for-profit entities have been applied.

Income and expenses in the statement of comprehensive income are separated into either ‘transactions’ or ‘other economic flows’.

current versus non-current assets and liabilities are disclosed in the notes where relevant.

classified according to GFS terminology, but retain measurement and disclosure rules under existing accounting standards applicable to the Department and

Scope and presentation of financial statements

Basis of preparation

‘changes in equity’ rather than ‘movements in equity’ and

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

In eeping with AASB 101 (September 2007) this complete set of financial statements includes the following changes:

The statement of comprehensive income includes items previously included in the statement of changes in equity.

‘transactions with owners in their capacity as owners’ rather than ‘transactions with owners as owners’.

‘a complete set of financial statements’ rather than using ‘financial report’

The accounting policies set out below have been applied in preparing the financial statements for the year ended 31 December 2011 and the comparative information presented for the year ended 31 December 2010.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets, liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

These financial statements are presented in Australian dollars, the functional and presentation currency of the Institute.

In the application of AAS, judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. Judgements made by management in the application of AASs that have significant effects on the financial statements and estimates, with a ris of material adjustments in the next year, are disclosed throughout the notes to the financial statements.

These financial statements have been prepared in accordance with the historical cost convention. Historical cost is based on the fair values of the consideration given in exchange for assets.

Exceptions to the historical cost convention include:

The financial statements and notes of Gordon Institute of TAFE comply with Australian Accounting Standards, some of which contain requirements specific to not-for-profit entities that are inconsistent with IFRS requirements.



NOTE 1


Statement of changes in equity

Cash flow statement

1.03 Reporting entity

Its principal address is:

Gordon Institute of TAFE

2 Fenwic Street

Geelong Victoria 3220

1.04 Basis of consolidation

1.05 Events after reporting date

1.06 Goods and Services Tax (GST)

1.07 Income from transactions

Government contributions

Sale of goods and services

(i) Student fees and charges

(ii) Fee for Service

(iii) Revenue from sale of goods

(a) the significant ris s and rewards of ownership of the goods have transferred to the buyer

Interest

The financial statements cover the Gordon Institute of TAFE as an individual reporting entity. The Institute is a statutory authority of the State of Victoria, established pursuant to an order made by the Minister for Higher Education and S ills Minister Responsible for the Teaching Profession here under the Enacted Act 2009.

The cash flow statement classifies flows by operating, investing and financing activities in accordance with AASB 107 Cash Flow Statements.

The Institute operates one controlled entity, Gotec Limited. All transactions related to the operation of Gotec are reported separately and not consolidated based on materiality.

Amounts disclosed as income are, where applicable, net of returns, allowances and duties and taxes. Revenue is recognised for each of the Institute’s major activities as follows:

Government contributions are recognised as revenue in the period when the Institute gains control of the contributions. Control is recognised upon receipt or notification by relevant authorities of the right to receive a contribution for the current period.

Fee for service revenue is recognised by reference to the percentage completion of each contract, i.e. in the reporting period in which the services are rendered. Where fee for service revenue of a reciprocal nature has been clearly received in respect of programs or services to be delivered in the following year, such amounts are disclosed as Revenue in Advance.

(b) the Institute retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold

The statement of changes in equity presents reconciliations of each non-owner and owner equity opening balance at the beginning of the year to the closing balance at the end of the year, showing separately movements due to amounts recognised in the comprehensive result and amounts recognised in equity related to transactions with owners in their capacity as owners.

Assets, liabilities, income or expenses arise from past transactions or other past events. Where the transactions result from an agreement between the Institute and other parties, the transactions are only recognised when the agreement is irrevocable at or before balance date. Adjustments are made to amounts recognised in the financial statements for events which occur after the reporting date and before the date the statements are authorised for issue, where those events provide information about conditions which existed at the reporting date. Note disclosure is made about events between the reporting date and the date the statements are authorised for issue where the events relate to condition which arose after the reporting date and which may have a material impact on the results of subsequent years.

Commitments and contingent assets or liabilities are presented on a gross basis.

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

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Revenue from sale of goods is recognised by the Institute when:

Student fees and charges revenue is recognised by reference to the percentage of services provided. Where student fees and charges revenue has been clearly received in respect of courses or programs to be delivered in the following year, any non-refundable portion of the fees is treated as revenue in the year of receipt and the balance as Revenue in Advance.

(c) the amount of revenue can be reliably measured

(e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.

(d) it is probable that the economic benefits associated with the transaction will flow to the Institute and

Interest from cash, short-term deposits and investments is brought to account on a time proportional basis ta ing into account interest rates applicable to the financial assets.



NOTE 1


Other Income

(i) Rental income

(ii) Other Income

1.08 Expenses from transactionsEmployee benefits

Retirement benefit obligations

(i) Defined contribution plan

Contributions to defined contribution plans are expensed when they become payable.

(ii) Defined benefit plans

Depreciation and Amortisation

Class of asset

Land Improvements

Buildings

Plant & equipment

Motor vehicles

Library collections

Internal use-software

Artwor

Grants and other transfers

Other operating expenses

Supplies and services

1.09 Other economic flows included in net result

Net gain/(loss) on non-financial assets

Disposal of non-financial assets

Rental income is recognised on a time proportional basis and is brought to account when the Institute's right to receive the rental is established.

Expenses for employee benefits are recognised when incurred, except for contributions in respect of defined benefit plans.

Depreciation is provided on property, plant and equipment over $5,000 (2010, $5,000), including freehold buildings but excluding land. Amortisation is provided on software over $5,000 (2010, $5,000). Depreciation and Amortisation is calculated on a straight-line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value.

Depreciation and Amortisation methods and rates used for each class of depreciable/amortised assets are:

Other income is recognised by reference to the percentage of services provided.

Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation/amortisation method are reviewed at the end of each annual reporting period.

The amount charged to the comprehensive operating statement in respect of superannuation represents the contributions made by the Institute to the superannuation plan in respect of current services of current Institute staff. Superannuation contributions are made to the plans based on the relevant rules of each plan.

The Institute does not recognise any deferred liability in respect of the plan(s) because the Institute has no legal or constructive obligation to pay future benefits relating to its employees its only obligation is to pay superannuation contributions as and when they fall due. The Department of Treasury and Finance recognises and discloses the State's defined benefit liabilities in its finance report.

Grants and other transfers to third parties are recognised as an expense in the reporting period in which they are paid or payable.

The assets' residual values and useful lives are reviewed and adjusted if appropriate on an annual basis. There has been no change in the methodology and rates for 2011.

Rate/RatesMethod

25.0%

10-25%

8-25%

1-10%

Straight

Straight

Straight

Straight

Straight

20.0%

Straight 2.0%

Straight 2.0%

Supplies and services expenses are recognised as an expense in the reporting period in which they are incurred. The carrying amounts of any inventories held-for-distribution are expensed when distributed.

Other economic flows measure the change in volume or value of assets or liabilities that do not result from transactions.

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses from revaluations, impairments, and disposals of all physical assets and intangible assets.

Any gain or loss on disposal of non-financial assets is recognised at the date control of the asset is passed to the buyer and is determined after deducting from the proceeds the carrying value of the asset at the time.



NOTE 1


Impairment of assets

Impairment of financial assets

Other gains/(losses) from other economic flows

1.10 Financial assetsCash and deposits

Receivables

Investments, loans and other financial assets

Recognition and initial measurement

Derecognition

Financial instruments are classified and measured as set out below (Also refer to 26(v)).

Classification and subsequent measurement

(i) Financial assets at fair value through profit or loss

(ii) Loans and receivables

(iii) Held-to-maturity investments

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

statutory receivables, which include predominantly amounts owing from the Victorian Government and GST input tax credits recoverable and

Financial assets have been assessed for impairment in accordance with Australian Accounting Standards. Where a financial asset's fair value at balance date has reduced by 20 percent or more than its cost price or where it's fair value has been less than its cost price for a period of 9 or more months, the financial instrument is treated as impaired.

Bad and doubtful debts are assessed on a regular basis. Those bad debts considered as uncollectable are written off against the allowance for doubtful receivables. The allowance for doubtful receivables are adjusted as a transaction expense.

Other gains/(losses) from other economic flows include the gains or losses from reclassifications of amounts from reserves and/or accumulated surplus to net result, and from the revaluation of the present value of the long service leave liability due to changes in the bond interest rates.

Cash and deposits, including cash equivalents, comprise cash on hand and cash at ban , deposits at call and those highly liquid investments with an original maturity of three months or less, which are held for the purpose of meeting short term cash commitments rather than for investment purposes, and which are readily convertible to nown amounts of cash and are subject to an insignificant ris of changes in value.

Intangible assets with indefinite useful lives (and intangible assets not yet available for use) are tested annually for impairment (i.e. as to whether their carrying value exceeds their recoverable amount and so require write downs).

If there is an indication that there has been a change in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, the carrying amount shall be increased to its recoverable amount. This reversal of the impairment loss occurs only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years.

The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash flows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell. It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

All other assets are assessed annually for indications of impairment, except for: Inventories

The Institute has no financial instruments under this category.

Trade receivables, loans and other receivables are recorded at amortised cost, using the effective interest method, less impairment. The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Receivables consist of:

Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Trade date accounting (the date on which the Institute commits to purchase or sell the asset) is adopted for financial assets that are delivered within timeframes established by mar etplace convention.

Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately.

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the ris s and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed is recognised in profit or loss.


contractual receivables, which include mainly debtors in relation to goods and services and accrued investment income

Receivables that are contractual are classified as financial instruments. Statutory receivables are not classified as financial instruments.

Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less an allowance for impairment.

A provision for doubtful receivables is made when there is objective evidence that the debts may not be collected and bad debts are written off when identified.



NOTE 1


Impairment of assets

Impairment of financial assets

Other gains/(losses) from other economic flows

1.10 Financial assetsCash and deposits

Receivables



Derecognition

Financial instruments are classified and measured as set out below (Also refer to 26(v)).


(i) Financial assets at fair value through profit or loss

(ii) Loans and receivables

(iii) Held-to-maturity investments

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

statutory receivables, which include predominantly amounts owing from the Victorian Government and GST input tax credits recoverable and

Financial assets have been assessed for impairment in accordance with Australian Accounting Standards. Where a financial asset's fair value at balance date has reduced by 20 percent or more than its cost price or where it's fair value has been less than its cost price for a period of 9 or more months, the financial instrument is treated as impaired.

Bad and doubtful debts are assessed on a regular basis. Those bad debts considered as uncollectable are written off against the allowance for doubtful receivables. The allowance for doubtful receivables are adjusted as a transaction expense.

Other gains/(losses) from other economic flows include the gains or losses from reclassifications of amounts from reserves and/or accumulated surplus to net result, and from the revaluation of the present value of the long service leave liability due to changes in the bond interest rates.

Cash and deposits, including cash equivalents, comprise cash on hand and cash at ban , deposits at call and those highly liquid investments with an original maturity of three months or less, which are held for the purpose of meeting short term cash commitments rather than for investment purposes, and which are readily convertible to nown amounts of cash and are subject to an insignificant ris of changes in value.

Intangible assets with indefinite useful lives (and intangible assets not yet available for use) are tested annually for impairment (i.e. as to whether their carrying value exceeds their recoverable amount and so require write downs).

If there is an indication that there has been a change in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, the carrying amount shall be increased to its recoverable amount. This reversal of the impairment loss occurs only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years.

The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash flows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell. It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

All other assets are assessed annually for indications of impairment, except for: Inventories


Trade receivables, loans and other receivables are recorded at amortised cost, using the effective interest method, less impairment. The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Receivables consist of:

Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Trade date accounting (the date on which the Institute commits to purchase or sell the asset) is adopted for financial assets that are delivered within timeframes established by mar etplace convention.


Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the ris s and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed is recognised in profit or loss.


contractual receivables, which include mainly debtors in relation to goods and services and accrued investment income

Receivables that are contractual are classified as financial instruments. Statutory receivables are not classified as financial instruments.

Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less an allowance for impairment.

A provision for doubtful receivables is made when there is objective evidence that the debts may not be collected and bad debts are written off when identified.



NOTE 1


(iv) Available-for-sale financial assets

1.11 Leases

1.12 Non-Financial AssetsInventories

Cost for all other inventory is measured on the basis of weighted average cost.

Property, plant and equipment

Property

Plant and equipment

Library collections

Library collections are measured at cost (purchase price) less accumulated depreciation.

Restrictive nature of cultural and heritage assets, Crown land and infrastructures

Revaluations of non-current physical assets

Available-for-sale financial assets are non-derivative financial assets that are either designated as such or that are not classified in any of the other categories. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. Available for sale financial assets related to term deposits are measured at amortised cost.

The institution does not hold leases of property, plant and equipment classified as finance leases. All other leases are classified as operating leases.

Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

Freehold land and buildings are shown initially at cost, then subsequently at their fair value.

Crown land is measured at fair value with regard to its highest and best use after due consideration is made for any legal or constructive restrictions imposed on the land, public announcements or commitments made in relation to the intended use of the land. Theoretical opportunities that may be available in relation to the asset are not ta en into account until it is virtually certain that the restrictions will no longer apply.

Plant and equipment are measured at fair value less depreciation and impairment losses.

Inventories held for distribution which includes materials or supplies to be consumed in the production process or in the rendering of services at no or nominal consideration are measured at current replacement cost.

Inventories acquired for no cost or nominal consideration are measured at current replacement cost at the date of acquisition.

Inventories include supplies and consumables, wor in progress (WIP) and finished goods are valued at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed and variable overhead expenses and other costs incurred in bringing inventories to their present location and condition are assigned to inventory on hand by the method most appropriate to each particular class of inventory, with the majority being valued on a first in first out basis. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in mar eting, selling and distribution.

Certain agencies hold cultural assets, heritage assets, Crown land and infrastructure, which are deemed worthy of preservation because of the social rather than financial benefits they provide to the community. Consequently, there are certain limitations and restrictions imposed on their use and/or disposal.

Non-current physical assets measured at fair value are revalued in accordance with FRDs issued by the Minister for Finance. This revaluation process normally occurs every five years, based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material changes in values. Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value.

Revaluation increases are credited directly to equity in the revaluation reserve, except to the extent that an increase reverses a revaluation decrease in respect of that class of property, plant and equipment, previously recognised as an expense (other economic flows) in the net result, the increase is recognised as income (other economic flows) in determining the net result.

Revaluation decreases are recognised immediately as expenses (other economic flows) in the net result, except to the extent that a credit balance exists in the revaluation reserve in respect of the same class of property, plant and equipment, they are debited to the revaluation reserve.

Revaluation increases and revaluation decreases relating to individual assets within a class of property, plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes.

The carrying amount of plant and equipment is reviewed annually by the Institute to ensure it is not in excess of the recoverable amount from these assets.

The cost of fixed assets constructed within the Institute includes the cost of materials and direct labour.

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

During the reporting period, the Institute held cultural assets, heritage assets, Crown land and infrastructures.

Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.



NOTE 1


Non-current physical assets constructed by the Institute

1.13 Liabilities Payables

Financial liabilities

Provisions

Employee benefits

(ii) Long service leave

The components of this current liability are measured at :

- present value - component that is not expected to be settled within 12 months.

- nominal value - component that is expected to be settled within 12 months.

(iii) Termination benefits

Employee benefits on-costs

Performance Payments

1.14 Commitments

1.15 Contingent assets and contingent liabilities

1.16 EquityContributed capital

The cost of non-financial physical assets constructed by the Institute includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportion of variable and fixed overheads.

Liability for long service leave (LSL) is recognised in the provision for employee benefits.

This non-current LSL liability is measured at present value. Gain or loss following revaluation of the present value of non-current LSL liability due to changes in bond interest rates is recognised as an other economic flow (refer to Note 4(b)).

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Institute recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.

Employee benefits on-costs (payroll tax, wor ers compensation, superannuation, annual leave and long service leave accrued while on LSL ta en in service) are recognised in employee benefits.

(i) Wages and salaries & annual leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee services up to the reporting date, classified as current liabilities and measured at their nominal values.

Liabilities that are not expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits as current liabilities, measured at present value of the amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.

Provisions are recognised when the Institute has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, ta ing into account the ris s and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

The calculation of employee benefits includes all relevant on-costs and are calculated as follows at reporting date.

Payables consist of:

statutory payables, such as goods and services tax and fringe benefits tax payables.

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent liabilities for goods and services provided to the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to ma e future payments in respect of the purchase of those goods and services and

Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised as an ‘other economic flow’ in the estimated consolidated comprehensive operating statement.

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note (refer note 18) and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of the GST receivable or payable respectively.

Funding that are in the nature of contributions by the State government are treated as contributed capital when designated in accordance with Interpretation 1038 Contribution by Owners Made to Wholly-Owned Public Sector Entities. Commonwealth capital funds are not affected and are treated as income.

Performance payments for TAFE Executive Officers are based on a percentage of the annual salary pac age provided under the contract of employment. A liability is provided for under the term of the contracts at reporting date and paid out in the next financial year.

Commitments include those operating, capital and other outsourcing commitments arising from non-cancellable contractual or statutory sources and are disclosed at their nominal value and inclusive of the GST payable.

Non-current liability - conditional LSL representing less than 7 years of service is disclosed as a non - current liability. There is an unconditional right to defer settlement of the entitlement until the employee has completed the requisite years of service.

Current Liability - unconditional LSL representing 7 years of service is disclosed as a current liability even when the Institute does not expect to settle the liability within 12 months because it will not have the unconditional right to defer settlement of the entitlement should an employee ta e leave within 12 months.



NOTE 1


Non-current physical assets constructed by the Institute

1.13 Liabilities Payables


Provisions

Employee benefits

(ii) Long service leave

The components of this current liability are measured at :

- present value - component that is not expected to be settled within 12 months.

- nominal value - component that is expected to be settled within 12 months.

(iii) Termination benefits

Employee benefits on-costs

Performance Payments

1.14 Commitments

1.15 Contingent assets and contingent liabilities

1.16 EquityContributed capital

The cost of non-financial physical assets constructed by the Institute includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportion of variable and fixed overheads.

Liability for long service leave (LSL) is recognised in the provision for employee benefits.

This non-current LSL liability is measured at present value. Gain or loss following revaluation of the present value of non-current LSL liability due to changes in bond interest rates is recognised as an other economic flow (refer to Note 4(b)).

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Institute recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.

Employee benefits on-costs (payroll tax, wor ers compensation, superannuation, annual leave and long service leave accrued while on LSL ta en in service) are recognised in employee benefits.

(i) Wages and salaries & annual leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee services up to the reporting date, classified as current liabilities and measured at their nominal values.

Liabilities that are not expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits as current liabilities, measured at present value of the amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.

Provisions are recognised when the Institute has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, ta ing into account the ris s and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

The calculation of employee benefits includes all relevant on-costs and are calculated as follows at reporting date.

Payables consist of:

statutory payables, such as goods and services tax and fringe benefits tax payables.

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent liabilities for goods and services provided to the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to ma e future payments in respect of the purchase of those goods and services and

Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract.

Derecognition of financial liabilities


When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised as an ‘other economic flow’ in the estimated consolidated comprehensive operating statement.

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note (refer note 18) and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of the GST receivable or payable respectively.

Funding that are in the nature of contributions by the State government are treated as contributed capital when designated in accordance with Interpretation 1038 Contribution by Owners Made to Wholly-Owned Public Sector Entities. Commonwealth capital funds are not affected and are treated as income.

Performance payments for TAFE Executive Officers are based on a percentage of the annual salary pac age provided under the contract of employment. A liability is provided for under the term of the contracts at reporting date and paid out in the next financial year.

Commitments include those operating, capital and other outsourcing commitments arising from non-cancellable contractual or statutory sources and are disclosed at their nominal value and inclusive of the GST payable.

Non-current liability - conditional LSL representing less than 7 years of service is disclosed as a non - current liability. There is an unconditional right to defer settlement of the entitlement until the employee has completed the requisite years of service.

Current Liability - unconditional LSL representing 7 years of service is disclosed as a current liability even when the Institute does not expect to settle the liability within 12 months because it will not have the unconditional right to defer settlement of the entitlement should an employee ta e leave within 12 months.


NOTE 1


1.17 Foreign currency translationsFunctional and presentation currency

Transactions and balances

1.18 Materiality

1.19 Rounding of amounts

1.20 Comparative information

1.21 New accounting standards and interpretations

The Institute is not exposed to fluctuations in foreign currencies arising from the delivery of services in currencies other than AUD$. This exposure has been assessed by management of the institute as insignificant.

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

The functional currency of the Institute is the Australian dollar, which has also been identified as the presentation currency of the Institute.

As at 31 December 2011 the following standards and interpretations (applicable to the Institute) had been issued but were not mandatory for financial year ended 31 December 2011. The Institute has not, and does not intend to, adopt these standards early.

Certain new accounting standards and interpretations have been published that are not mandatory for the 31 December 2011 reporting period.

In accordance with Accounting Standard AASB1031 'Materiality', accounting policies need only be identified in the summary of accounting policies where they are considered 'material'. Accounting policies will be considered material if their omission, misstatement or non-disclosure has the potential, individually or collectively, to:

(a ) influence the economic decisions of users ta en on the basis of the financial report and

(b) affect the discharge of accountability by the management or governing body of the entity.

Amounts in the financial report have been rounded to the nearest thousand dollars, unless otherwise stated.



NOTE 1


Standards Affected Application date of

standard

Impact on financial statements

Financial Instruments 1-Jan-13 Detail of impact is still being assessed.

Amendments to Australian Accounting Standards arising from AASB 9

1-Jan-15 Detail of impact is still being assessed.

Amendments to Australian Accounting Standards arising from AASB 9 (December 2010)

1-Jan-15 This amendment may have an impact on departments and public sector bodies as AASB 9 is a new standard and it changes the requirements of numerous standards. Detail of impact is still being assessed.

Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7]

1-Jul-11 As it creates additional disclosure for transfers of financial assets. Detail of impact is still being assessed.

Amendments to Australian Accounting Standards arising from AASB 10,11,12,127,128


Fair Value Measurement 1-Jan-13 Detail of impact is still being assessed.



Employee Benefits 1-Jan-13 Detail of impact is still being assessed.



Amendments to AASB 119 arising from Reduced Disclosure Requirements

1-Jul-13 Detail of impact is still being assessed.

Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements


Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets


Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements


2011-11 This Standard makes amendments to AASB 119 Employee Benefits, to incorporate reduced disclosure requirements into the Standard for entities applying Tier 2 requirements in preparing general purpose financial statements.

2010-2 This Standard gives effect to Australian Accounting Standards – ReducedDisclosure Requirements and amends AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131, 133, 134, 136, 137, 138, 140, 141, 1050 & 1052 and Interpretations 2, 4, 5, 15, 17, 127, 129 & 1052.

2010-6 This Standard adds and amends disclosure requirements about transfers of financial assets, including in respect of the nature of the financial assetsinvolved and the risks associated with them.

2011-4 This Standard makes amendments to Australian Accounting Standard AASB 124 Related Party Disclosures.

2011-7 Amends AASB 1,2,3,5,7,9,2009-11,101,107,112,118,121,124,132,133,136,138,139,1023 & 1038 and Interpretations 5,9,16 & 17 as a result of the issuance of AASB 10, 11, 12, 127 and 128

AASB 13 Provides a clear definition of fair value, a framework for measuring fair value and requires enhanced disclosures about fair value measurement.

2011-8 Amends AASB 1, 2, 3, 4, 5, 7, 9, 101, 102, 108, 110, 116, 117, 118, 119, 120, 121, 132, 133, 134, 136, 138, 139, 140, 141, 1004, 1023 & 1038 and Interpretations 2, 4, 12, 13, 14, 17, 19, 131 & 132 as a result of issuance of AASB 13 Fair Value Measurement.

AASB 119 Prescribes the accounting and disclosure for employee benefits. This Standard prescribes the recognition criteria when in exchange for employee benefits.

2011-10 Amends AASB 1, 8, 101, 124, 134, 1049, 2011-8 & Interpretation 14 as a result of the issuance of AASB 119 Employee Benefits.

AASB 9

2009-11

2010-7

2010-6

Replaces the requirements of AASB 139 for the classification and measurement of financial assets. This is the result of the first part of Phase 1 of the IASB’s

j t t l IAS 39Amends AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 and 1038 and Interpretations 10 and 12 as a result of the issuance of AASB 9.

Amends AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127 for amendments to AASB 9 in December 2010

This amendment adds and changes disclosure requirements about the transfer of financial assets. This includes the nature and risk of the financial assets.

Amending Pronouncements and Errata

Outline of Amendment


19


NOTE 2

Income from Transactions

2011 2010

2 Income from transactions $'000 $'000

(a) Grants and other transfers (other than contributions by owners)

Government financial assistance

(i) Government contributions - operating

State government recurrent specific funded programs 79,719 53,129

Assumption of liabilities by Government 196 266

Other contributions 395 690

Total government contributions - operating 80,310 54,085

(ii) Government contributions - capital

Commonwealth capital - 1,281

State capital 3,926 8,960

Total government contributions - capital 3,926 10,241

Total government financial assistance 84,236 64,326

(b) Sales of goods and services

Student fees and charges 4,989 3,646

Rendering of services

Fee for service - Government 1,495 1,863

Fee for service - International operations - onshore 1,200 1,454

Fee for service - International operations - offshore 255 349

Fee for service - other 2,874 3,782

Total rendering of services 5,824 7,448

Other non-course fees and charges

Sale of Goods 2,529 2,788

Total other fees and charges 2,529 2,788

Total revenue from sale of goods and services 13,343 13,882

(c) Interest

Interest from financial assets not at fair value through P/L:

Interest on ban deposits 1,322 946

Total interest revenue from financial assets not at fair value through P/L 1,322 946

Net interest income 1,322 946

(d) Other income

Rental revenue from student residence 260 250

Donations, bequests and contributions 106 86

Other revenue 722 582

Total other income 1,088 918

Institute


20


NOTE 3

Expenses from transactions

2011 2010

3 Expenses from transactions $'000 $'000

(a) Employee expenses

Salaries, wages, overtime and allowances 54,713 42,282

Superannuation 3,661 3,558

Payroll tax 2,189 2,154

Wor er's compensation 455 483

Long service leave* 445 (43)

Annual leave* 232 152

Other 128 115

Total employee benefit expenses 61,823 48,701

* Represents movement in leave provision net of leave ta en during the reporting period and impact of changes in discount rates.(b) Depreciation and amortisation

Depreciation of non-current assets

Land Improvements 77 62

Leased Land Improvements 7 7

Buildings 1,703 1,713

Building Improvements 195 45

Plant and Equipment 1,640 1,368

Motor Vehicles 372 374

Library collections 143 149

Wor s of Art 4 4

Total depreciation 4,140 3,722

Amortisation of non-current physical and intangible assets

Software 414 271

Total amortisation 414 271

Total depreciation and amortisation 4,554 3,993

(c) Supplies and Services

Purchase of supplies and consumables 2,155 2,016

Communication expenses 612 583

Contract and other services 1,145 1,038

Building repairs and maintenance 784 872

Fees and charges 1,926 2,310

Grants and subsidies to apprentices and trainees 128 125

Mar eting and promotional expenses 988 789

Audit fees and services 59 103

Staff development 495 403

Travel and motor vehicle expenses 1,118 804

Rent/leasing charges 168 156

Utilities 699 749

Equipment below capitalisation threshold - non Government Contribution 458 445

Other expenses 1,753 1,851

Total supplies and services 12,487 12,244

Other Expenses

General Expenses

Bad Debts and Doubtful Debts from transactions 13 100

Cost of goods sold/distributed (ancillary trading) 2,398 2,520

Total other operating expenses 14,898 14,864

Institute


21


NOTE 4

Other economic flows included in net result

2011 2010

4 Other economic flows included in net result $'000 $'000

(a) Net gain/(loss) on non-financial assets (including PPE and intangible assets)

Net gain/(loss) on disposal of physical assets1 (651) 36

Total net gain/(loss) on non-financial assets and liabilities (651) 36

(b) Other gains/(losses) from other economic flows

Net gain/(loss) arising from revaluation of long service leave liability (354) (15)

Total other gains/(losses) from other economic flows (354) (15)

1

NOTE 5

Cash and cash equivalents

2011 2010

5 Cash and deposits $'000 $'000

Cash at ban and on hand 770 1,119

Deposits - at call* 35,365 12,975

Total cash and deposits 36,135 14,094

* Increased holdings of investments is as a result of a significant increase in income and profitability.

2011 2010

(a) Reconciliation to cash at the end of the year $'000 $'000

Balances as above 36,135 14,094

Balance as per cash flow statement 36,135 14,094

(b) Cash at bank and on hand

The weighted average effect interest rate for Cash at Ban was 3.34% (2010 - 4.02%).

(c) Deposits at call

The deposits are bearing floating interest rates between 4% and 5% (2010 - 4% and 5%).

These deposits have an average maturity of 61 days.

Institute

Institute

The above figures are reconciled to cash at the end of the financial year as shown in the cash flow statement as follows:

Institute

The institute demolished Building D at the East Campus in April 2011. The building was occupied by the Geelong Technical Education Centre and had a written down value of $715,936. A replacement building is part of construction in progress (refer to Note 10 - Property, Plant & Equipment) and is expected to be commissioned in 2012.


22


NOTE 6

Receivables

2011 2010

6 Receivables $'000 $'000

Current receivables

Contractual

Trade receivables1 1,496 1,317

Provision for doubtful contractual receivables (See also Note 6(a) below) (75) (141)

Other Debtors 103 434

Amounts owing from Victorian Government 1,897 7,314

Total receivables 3,421 8,924

1

2011 2010

(a) Movement in the provision for doubtful contractual receivables $'000 $'000

Balance at beginning of the year 141 106

Increase in provision recognised in the net result 7 82

Reversal of provision for receivables written off during the year as uncollectible (73) (47)

Balance at end of the year 75 141

(b) Ageing analysis of contractual receivables

Please refer to Note 26(iv) for the ageing analysis of contractual receivables.

(c) Nature and extent of risk arising from contractual receivables

Please refer to Note 26 for the nature and extent of credit ris arising from contractual receivables.

NOTE 7


2011 2010

7 Investments, loans and other financial assets $'000 $'000

Current investments, loans and other financial assets

Fixed Interest Term Deposits with TCV 8,794 4,000

Total current investments, loans and other financial assets 8,794 4,000

Non-current investments, loans and other financial assets

Equities and managed investment schemes:

Australian unlisted shares in other entities 220 220

Less Impairment provision (220) (220)

Total equities and managed investment schemes - -

Term deposits:

Fixed Interest Term Deposits with TCV - 500

Total term deposits - 500

Total non-current investments, loans and other financial assets - 500

Total investments, loans and other financial assets 8,794 4,500

(a) Ageing analysis of investments, loans and other financial assets

(b) Nature and extent of risk arising from investments, loans and other financial assets

Please refer to Note 26 for the nature and extent of ris s arising from investments, loans and other financial assets.

Institute

Institute

The average credit period on sales of goods is 30 days. No interest is charged on receivables. A provision has been made for estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience. The $6,736 reduction was recognised in the operating result for the current financial year.

Institute

Please refer to Note 26(iv) for the ageing analysis of investments, loans and other financial assets.


23


NOTE 8

Inventories

2011 2010

8 Inventories $'000 $'000

Current

List type of inventories held

Inventories held-for-sale:

Boo s 197 204

Stationary 32 40

Student Activities Merchandise 10 7

Food 14 7

Beverages 18 20

Inventories held-for-distribution:

Floristry 4 -

Hairdressing Supplies 22 21

Beauty Therapy Supplies 39 30

Total current inventories 336 329

NOTE 9

Other non-financial assets

2011 2010

9 Other non-financial assets $'000 $'000

Current other non-financial assets

Prepayments 811 708

Total current other non-financial assets 811 708

Total other non-financial assets 811 708

Institute

Institute


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$'00

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$'00

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$'00

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At 1

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ary

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Cost

-

-

--

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-

-

-3,

096

-3,

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Valu

atio

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,940

3,07

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-

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-

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(7

)

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2,

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,964

1,

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494

4,

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7

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609

20

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Year

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am

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40

2,

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29

83

,964

1,62

2

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4

4,

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1,67

7

1,

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609

204

113,

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Add

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-

-

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3

6,

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1,38

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(7)

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)

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,574

2,

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22

82

,251

2,

704

6,52

3

6,

399

296

99

9

547

20

2

121,

430

At 3

1 D

ecem

ber

2010

Cost

-

-

--

--

-

-

-3,

183

-3,

183

Valu

atio

n18

,574

3,09

5

34

87,2

83

2,

778

6,52

3

15

,517

296

2,07

7

-

214

137,

469

Acc

umul

ated

dep

reci

atio

n-

(183

)

(12)

(5,0

32)

(74)

-

(9

,118

)

-

(1,0

79)

(2,6

36)

(11)

(19,

222)

Net

boo

k am

ount

18

,574

2,

912

22

82

,251

2,

704

6,52

3

6,

399

296

99

9

547

20

3

121,

430

Year

end

ed 3

1 D

ecem

ber

2011

Ope

ning

net

boo

am

ount

18,5

74

2,

912

22

82

,251

2,70

4

6,

523

6,39

9

29

6

99

9

54

7

20

3

12

1,43

0

Add

ition

s-

3

-

-

375

2,87

3

38

6

57

535

57

2

4,

289

Dis

posa

ls-

-

-

(716

)

(18)

-

(2

5)

-

(136

)

-

-

(896

)

Net

reva

luat

ion

incr

emen

ts/

decr

emen

ts-

-

-

-

-

-

-

-

-

-

-

-

Tran

sfer

from

WIP

to A

sset

Cla

ss-

547

-

-

5,70

2

(6

,249

)

19

5

(1

95)

-

-

-

-

Dep

reci

atio

n ex

pens

e-

(77)

(7)

(1

,703

)

(1

95)

-

(1,6

40)

-

(3

72)

(1

43)

(4

)

(4,1

40)

Clos

ing

net b

ook

amou

nt18

,574

3,

385

15

79

,831

8,

569

3,14

7

5,

315

158

1,

025

462

20

1

120,

682

At 3

1 D

ecem

ber

2011

Cost

-

-

-

-

-

-

-

-

-

3,

241

-

3,

241

Valu

atio

n18

,574

3,64

5

34

86,5

16

8,

837

3,14

7

15

,525

158

2,14

3

-

217

138,

795

Acc

umul

ated

dep

reci

atio

n-

(260

)

(19)

(6,6

84)

(268

)

-

(1

0,21

0)

-

(1

,118

)

(2

,778

)

(1

5)

(2

1,35

3)

Net

boo

k am

ount

18

,574

3,

385

15

79

,831

8,

569

3,14

7

5,

315

158

1,

025

462

20

1

120,

682

(a) V

alua

tion

s of

land

and

bui

ldin

gs

Reva

luat

ion

of L

and

and

Build

ings

was

und

erta

en o

n 31

-12-

2007

by

Land

lin P

rope

rty

Gro

up P

ty L

td.

A p

artia

l rev

alua

tion

of A

rtw

or w

as u

nder

taen

by

Opt

eon

Land

lin P

lant

and

Mac

hine

ry V

alue

rs P

ty L

td o

n 31

-12-

2007

and

com

plet

ed o

n 31

-12-

2008

. Bo

th v

alue

rs a

re in

depe

nden

t val

uers

.

A M

anag

eria

l Rev

alua

tion

of L

and

was

und

erta

en o

n 31

-12-

2010

bas

ed o

n co

mpo

unde

d Va

luer

Gen

eral

Off

ice

Indi

ces

for 2

008,

200

9 an

d 20

10.

Foot

note

1Th

e us

eful

live

s of

ass

ets

as s

tate

d in

Not

e 1

are

used

in th

e ca

lcul

atio

n of

dep

reci

atio

n as

sho

wn

in n

ote

3.


25


NOTE 11

Intangible assets

Software as work in

progressSoftware Total

Institute $’000 $’000 $’000

At 1 January 2010

Cost 890 - 890

Net book amount 890 - 890

Year ended 31 December 2010

Opening net boo amount 890 - 890

Additions 514 396 910

Transfer from WIP to Asset Class (890) 890 -

Amortisation charge 1 - (271) (271)

Closing net book amount 514 1,015 1,529

At 31 December 2010

Cost 514 1,286 1,800

Accumulated amortisation - (271) (271)

Net book amount 514 1,015 1,529


Opening net boo amount 514 1,015 1,529





At 31 December 2011

Cost 800 1,864 2,664


Net book value at the end of the financial year 800 1,179 1,979

Footnotes1

Notes

1 Significant intangible assets

Website

NOTE 12

Payables

2011 2010

12 Payables $'000 $'000

Current

Contractual

Supplies and services 3,373 2,966

Amounts payable to government and agencies 404 293

Revenue in Advance 1,610 1,797

Total contractual 5,387 5,055

Statutory

Taxes Payable 739 39

Total statutory 739 39

Total payables 6,126 5,094

For an analysis of the sensitivity of payables to foreign currency ris refer to note 26(1).

Maturity analysis of contractual payables

Refer to Note 26(iv) for maturity analysis of contractual payables.

Institute

Amortisation charged is reported as an expense from transactions in the Comprehensive Operating Statement.

The Institute commissioned the development of its core financial system, Technology One Financials, in 2009. The carrying amount of the capitalised expenditure is $448,079 (2010: $671,202). Its useful life is 4 years and will be fully amortised in 2014.

The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice.

The Institute has capitalised software development expenditure for the development of the following software:

The Institute commissioned the development of its Website in 2011. The carrying amount of the capitalised expenditure is $166,000 (2010: $0). Its useful life is 4 years and will be fully amortised in 2015.

Technology One Financials

Student Management System

The institute has contributed $500,745 (2010: $0) to the development of the Student Management System. The system is expected to be commissioned in May 2012. The Institute has committed a total of $1.3 million to the development of the system.


25


NOTE 11

Intangible assets

Software as work in

progressSoftware Total

Institute $’000 $’000 $’000

At 1 January 2010

Cost 890 - 890

Net book amount 890 - 890


Opening net boo amount 890 - 890





At 31 December 2010

Cost 514 1,286 1,800


Net book amount 514 1,015 1,529


Opening net boo amount 514 1,015 1,529





At 31 December 2011

Cost 800 1,864 2,664


Net book value at the end of the financial year 800 1,179 1,979

Footnotes1

Notes

1 Significant intangible assets

Website

NOTE 12

Payables

2011 2010

12 Payables $'000 $'000

Current

Contractual

Supplies and services 3,373 2,966

Amounts payable to government and agencies 404 293

Revenue in Advance 1,610 1,797

Total contractual 5,387 5,055

Statutory

Taxes Payable 739 39

Total statutory 739 39

Total payables 6,126 5,094

For an analysis of the sensitivity of payables to foreign currency ris refer to note 26(1).

Maturity analysis of contractual payables

Refer to Note 26(iv) for maturity analysis of contractual payables.

Institute

Amortisation charged is reported as an expense from transactions in the Comprehensive Operating Statement.

The Institute commissioned the development of its core financial system, Technology One Financials, in 2009. The carrying amount of the capitalised expenditure is $448,079 (2010: $671,202). Its useful life is 4 years and will be fully amortised in 2014.

The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice.

The Institute has capitalised software development expenditure for the development of the following software:

The Institute commissioned the development of its Website in 2011. The carrying amount of the capitalised expenditure is $166,000 (2010: $0). Its useful life is 4 years and will be fully amortised in 2015.

Technology One Financials

Student Management System

The institute has contributed $500,745 (2010: $0) to the development of the Student Management System. The system is expected to be commissioned in May 2012. The Institute has committed a total of $1.3 million to the development of the system.


26


NOTE 13

Provisions

2011 2010

13.1 Provisions $'000 $'000

Current provisions expected to be settled within 12 months

Employee benefits

Annual leave 2,306 2,012

Long service leave 651 610

Performance Payments 150 130

Total current provisions expected to be settled within 12 months 3,107 2,752

Current provisions expected to be settled after 12 months

Employee benefits

Annual leave 678 739

Long service leave 4,286 3,765

Total current provisions expected to be settled after 12 months 4,964 4,504

Total current provisions 8,071 7,256

Non-current

Employee benefits:

Long service leave 1,256 1,020

Total non-current provisions 1,256 1,020

Total provisions 9,327 8,276

2011 2010

13.2 Movements in Provisions Note $'000 $'000

Carrying amount at start of year 8,276 8,167

Additional provisions recognised 3,471 2,970

Amounts used (2,774) (2,876)

Increase/(decrease) in discounted amount 4(b) 354 15

Carrying amount at end of year 9,327 8,276

NOTE 14

Other liabilities

2011 2010

14 Other liabilities $'000 $'000

Current

Grants in Advance - 209

State Government funds held for distribution 1,572 13

Total other liabilities 1,572 222

Maturity analysis of other liabilities

Refer to Note 26 for maturity analysis of other liabilities.

Institute

Institute

Aggregate movements in each class, other than employee provisions during the financial year are set out below:

Institute


27


NOTE 15

Equity

2011 2010

15.1 Equity $'000 $'000

(a) Contributed Capital

Balance at 1 January 10,305 10,305

Balance at 31 December 10,305 10,305

(b) Accumulated surplus / (deficit)


Net operating result for the year 17,213 11,453

Transfer (to) / from Reserves 78 (71)


(c) Reserves

Composition of Reserves

Physical Asset Revaluation Surplus 77,439 77,439

Special Purpose Reserve 1,194 1,194

General Reserve 91 162

Funds Held in Perpetuity Reserve 6 13


Total equity 155,135 137,922

2011 2010

15.2 Movements in Reserves $'000 $'000

Physical Asset Revaluation Reserve


Revaluation increment on non-current assets - 2,634


Special Purpose Reserve



General Reserve

Balance at 1 January 162 91

Transfers (to)/from accumulated surplus/(deficit) (71) 71

Balance at 31 December 91 162

Funds Held in Perpetuity Reserve

Balance at 1 January 13 13

Transfers (to)/from accumulated surplus/(deficit) (7) -

Balance at 31 December 6 13

Institute

Institute

The Institute asset revaluation reserve represents the reassessment of the value of capital assets as at a particular date.


28


NOTE 16

Cash flow information

2011 2010

16 Cash flow information $'000 $'000

(a) Reconciliation of operating result after income tax to net cash flows from operating activities

Net result for the year 17,213 11,453

Non-cash flows in operating result

Depreciation and amortisation of non-current assets 4,554 3,993

Net (gain) / loss on sale of non-current assets 651 36

Transfers (to)/from Reserves - (71)

Total non-cash flows in operating result 5,205 3,958

Movements in operating assets and liabilities

Decrease / (increase) in trade receivables 5,502 (5,239)

Decrease / (increase) in inventories (7) (11)

Decrease / (increase) in other assets (103) 105

Increase / (decrease) in payables 1,032 821

Increase / (decrease) in employee benefits 1,051 109

Increase / (decrease) in current liabilities 1,350 148

Total movement in operating assets and liabilities 8,825 (4,067)

Net cash flows provided by/(used in) operating activities 31,243 11,344

NOTE 17

Commitments

2011 2010

17 Commitments for expenditure $'000 $'000

(a) Capital commitments

Property, Plant and Equipment

Payable:

Within one year 3,949 160

Total Property, Plant and Equipment 3,949 160

Net Commitments Property, Plant and Equipment 3,949 160

Intangible assets

Payable:

Within one year 811 240

Total Intangible assets 811 240

Net Commitments Intangible assets 811 240

Total capital expenditure commitments 4,760 400

NOTE 18

Contingent Assets and Contingent Liabilities

There were no contingent assets or contingent liabilities as at 31 December 2011 (2010 - Nil).

Institute

Institute

Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:


29


NOTE 19

Economic dependency

2011 2010

19 Economic dependency $'000 $'000

S ills Victoria 83,644 62,089

83,644 62,089

1

NOTE 20

Subsequent events

2011 2010

20 Subsequent events $'000 $'000

Events occurring after reporting date are as follows:

- -

Total events occurring after reporting date - -

NOTE 21

Remuneration of auditors

2011 2010

21 Remuneration of auditors $'000 $'000

Remuneration of Victorian Auditor General's Office for:

Audit of the financial statements 26 59

Total remuneration of Victoria Auditor General's Office 26 59

Remuneration of other auditors

WHK Howarth 26 25

WHK Howarth - Other Services 1 14

TQCS International 6 5

Total remuneration of other auditors of subsidiaries 33 44

Total Remuneration of auditors 59 103

NOTE 22

Superannuation

2011 2010

22 Superannuation $'000 $'000

Paid Contribution for the Year

Defined benefit plans:

State Superannuation Fund – revised and new 323 362

Total defined benefit plans 323 362

Defined contribution plans:

VicSuper 2,226 2,200

Other 672 581

Total defined contribution plans 2,898 2,781

Total paid contribution for the year 3,221 3,143

Contribution Outstanding at Year End





VicSuper 299 292

Other 99 79

Total defined contribution plans 398 371

Total 440 415

Institute

Institute

Institute

Employees of the Institute are entitled to receive superannuation benefits and the Institute contributes to both defined benefit and defined contribution plans. The defined benefit plan(s) provides benefits based on years of service and final average salary.

The Institute does not recognise any defined benefit liability in respect of the plan(s) because the entity has no legal or constructive obligation to pay future benefits relating to its employees its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance recognises and discloses the State’s defined benefit liabilities in its financial statements.

However, superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the Statement of Comprehensive Income of the Institute.

The name and details of the major employee superannuation funds and contributions made by the Institute are as follows:

Institute

The Gordon receives 83% (2010: 77%) of its annual funding from S ills Victoria. From time to time, the Gordon also receives substantial funding from the Department of Education, Employment and Wor place Relations to assist with capital expenditure.


29


NOTE 19

Economic dependency

2011 2010

19 Economic dependency $'000 $'000

S ills Victoria 83,644 62,089

83,644 62,089

1

NOTE 20

Subsequent events

2011 2010

20 Subsequent events $'000 $'000

Events occurring after reporting date are as follows:

- -

Total events occurring after reporting date - -

NOTE 21

Remuneration of auditors

2011 2010

21 Remuneration of auditors $'000 $'000

Remuneration of Victorian Auditor General's Office for:

Audit of the financial statements 26 59

Total remuneration of Victoria Auditor General's Office 26 59

Remuneration of other auditors

WHK Howarth 26 25

WHK Howarth - Other Services 1 14

TQCS International 6 5

Total remuneration of other auditors of subsidiaries 33 44

Total Remuneration of auditors 59 103

NOTE 22

Superannuation

2011 2010

22 Superannuation $'000 $'000

Paid Contribution for the Year





VicSuper 2,226 2,200

Other 672 581

Total defined contribution plans 2,898 2,781

Total paid contribution for the year 3,221 3,143

Contribution Outstanding at Year End





VicSuper 299 292

Other 99 79

Total defined contribution plans 398 371

Total 440 415

Institute

Institute

Institute

Employees of the Institute are entitled to receive superannuation benefits and the Institute contributes to both defined benefit and defined contribution plans. The defined benefit plan(s) provides benefits based on years of service and final average salary.

The Institute does not recognise any defined benefit liability in respect of the plan(s) because the entity has no legal or constructive obligation to pay future benefits relating to its employees its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance recognises and discloses the State’s defined benefit liabilities in its financial statements.

However, superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the Statement of Comprehensive Income of the Institute.

The name and details of the major employee superannuation funds and contributions made by the Institute are as follows:

Institute

The Gordon receives 83% (2010: 77%) of its annual funding from S ills Victoria. From time to time, the Gordon also receives substantial funding from the Department of Education, Employment and Wor place Relations to assist with capital expenditure.



NOTE 23

Key management personnel disclosures

Responsible persons related disclosures

(i) Minister

(ii) Members of the Board of Gordon Institute of TAFE

CEO - Grant SutherlandPresident/Chairman - Brian WilliamsVice President - Allana Goldsworthy (re-appointed 6th Oct 2011)Vice President - Jodi Heath (term expired 31st Dec 2011)Staff Representative - Angela Di Sciascio (resigned 30th March 2011)Staff Representative - Cameron Quinten (appointed 1st June 2011)Kate BirrellKen JarvisMichael King (term expired 31st Dec 2011)Denis PeacocKate SullivanCasey Van Ber el (term expired 31st Dec 2011)

(iii) Executive Officers

The following persons were executive officers of the Institute during the year:

Stella GarciaDr Wanda KorndorfferPaul LangeJohn PaxtonGreg WaddellSue Warner

(iv) Loans to key management personnel

No loans were made to directors of the Institute or any other ey management personnel, including

their personally related parties in 2011 (2010, $nil).

2011 2010

23.1 Key management personnel disclosures $'000 $'000

Remuneration of Board members

339 339

No. No.

Income range

Less than $10,000 9 10 $20,000 - $29,999 1 - $50,000 - $59,999 1 - $80,000 - $89,999 - 1 $220,000 - $229,999 - 1

$240,000 - $249,999 1 -

Total number of Responsible Persons 12 12

The relevant Minister is the Hon. Peter Hall, MLC, Minister for Higher Education and S ills. Remuneration of the Ministers is disclosed in the financial report of the Department of Premier and Cabinet. Other relevant interests are declared in the Register of Members interests which is completed by each member of the Parliament.

In accordance with the directions of the Minister for Finance under the Financial Management Act 1994 , the following disclosures are made for the responsible Ministers and responsible Members of Council.

Institute

Responsible persons

The number of Responsible Persons whose remuneration from the Institute was within the specified bands are as follows:

Remuneration received, or due and receivable from the Institute in connection with the management of the Institute. Includes termination payments and bonuses paid at end of contracts.



NOTE 23

Key management personnel disclosures

2011 2010

23.2 Key management personnel disclosures $'000 $'000

Executive Officers' Remuneration

Base remuneration of executive officers 925 885

Total remuneration of executive officers 974 958

No. No.

Income range

$140,000 - $149,999 - 4 $150,000 - $159,999 2 2 $160,000 - $169,999 4 - $170,000 - $179,999 - -

Total executive officers 6 6

2011 2010

23.3 Key management personnel disclosures No. No.

Key management personnel compensation

Short-term employee benefits 1,204 1,195

Post-employment benefits 107 102

Other long-term benefits 2 -

Total key management personnel compensation 1,313 1,297

Other transactions with key management personnel

Institute

The number of executive officers whose total remuneration exceeded $100,000 during the financial year are shown in their relevant income bands. The base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments and retirement benefits.

The number of executive officers whose remuneration from the Institute was within the specified bands are as follows:

Key management personnel

Executive officers

Institute

Other related transactions and loans requiring disclosure under the Directions of the Minister for Finance have been considered and there are no matters to report.


32


NOTE 24

Related parties

Key management personnel

Disclosures relating to directors and specified executives are set out in note 23.

Transactions with related parties

The following transactions occurred with related parties:

2011 2010

24.1 Related parties $'000 $'000

Sale of goods and services 14 22

Total sale of goods and services 14 22

Purchase of goods 4 199

Total purchase of goods 4 199

All related party transactions are with St John of God Hospital in Geelong.

Outstanding balances

The following balances are outstanding at the reporting date in relation to transactions with related parties:

2011 2010

24.2 Related parties $'000 $'000

Current receivables (sale of goods and services)

Other related parties - 19

Total current receivables - 19

Current receivables (loans)

Commonly controlled entities 41 41

Total non-current receivables 41 41

NOTE 25

Institute details

25 Institute details

The registered office of the Institute is:


2 Fenwick Street , Geelong Victoria 3220

The principle place of business is:


2 Fenwick Street , Geelong Victoria 3220

Institute

Institute



NOTE 26 - 1

Financial Instruments (Part I)

26 Financial Instruments

Financial risk management

(i) Financial risk management objectives

(ii) Financial risk exposures and management

Carrying amount of financial instruments by category: 2011 2010$'000 $'000

Financial Assets Note CategoryCash and Deposits 5 Cash 36,135 14,094

Receivables (a) 6 Receivables 3,421 8,924

Fixed interest term deposits 7 Investments, loans and other financial assets 8,794 4,500 48,350 27,518

Financial liabilitiesPayables (a) 12 Financial liabilities 3,777 3,297

3,777 3,297

Net holding gain/(loss) on financial instruments by category: 2011 2010$'000 $'000

Financial Assets CategoryCash and Deposits 5 Cash 1,278 890 Receivables 6 Receivables (5) (91) Fixed interest term deposits 7 Investments, loans and other financial assets 44 56

1,317 855

Financial liabilitiesPayables 12 Financial liabilities - -

- - Note:

Market risk

Foreign currency risk

Price risk

Interest rate risk

Institute

(a) Receivables and payables disclosed here exclude statutory receivables and statutory payables.


The Institute is exposed to price ris in respect of fee for service and contract services which are subject to open mar et competition.

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing price ris or the methods used to measure this ris from the previous reporting period.

Interest rate movements have not been sufficiently significant during the year to have an impact on the Institute's year end result.

The objective is to manage the rate ris to achieve stable and sustainable net interest earnings in the long term. This is managed predominately through a mixture of short term and longer term investments. The Institute's exposure to interest rate ris s and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised at balance date are set out in the financial instrument composition and maturity analysis table.

The Institute's activities expose it to a variety of financial ris s: mar et ris (including currency ris , fair value interest rate ris , cash flow interest rate ris and price ris ), credit ris and liquidity ris . The Institute's overall ris management program focuses on the unpredictability of financial mar ets and see s to minimise potential adverse effects on the financial performance of the Institute by adhering to principles of foreign exchange ris , interest rate ris , credit ris , and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by management on a continuous basis. The Institute does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset and financial liability instrument is disclosed in note 1 of the financial statements.

The Institute's financial instruments consist mainly of deposits with ban s, local money mar et instruments, short term investments, accounts receivables and payables.

The main ris s the Institute is exposed to through its financial instruments are mar et ris , price ris , funding ris , interest rate ris , credit ris and liquidity ris .

The Institute in its daily operations is exposed to a number of mar et ris s. Mar et ris s relate to the ris that mar et rates and prices will change and that this will have an adverse affect on the operating result and /or net worth of the Institute. e.g. an adverse movement in interest rates.

The Board ensures that all mar et ris exposure is consistent with the Institute's business strategy and within the ris tolerance of the Institute. Regular ris reports are presented to the Board.

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing mar et ris or the methods used to measure this ris from the previous reporting period.

(iii) Categorisation of financial instrumentsInstitute

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing foreign currency ris or the methods used to measure this ris from the previous reporting period.

Interest rate ris arises from the potential for a change in interest rates to change the expected net interest earnings in the current reporting period and in future years. Similarly, interest rate ris also arises from the potential for a change in interest rates to cause a fluctuation in the fair value of the financial instruments.


NOTE 26 - 1


Funding risk

Concentrations of credit risk

No service is provided to commercial customers unless a contract has been signed that outlines financial terms and conditionsPayment terms are 30 days from the date of invoiceCustomers are sent statements each month indicating overdue amounts required to settle accountCustomers in arrears are sent letters and telephoned to discuss issues with their accountAccounts overdue greater than 90 days are sent to a debt collection agency

25% deposit required, deposits less than 25% are only excepted after scrutiny and referral to Student Counsellor/S ill Centre ManagerStudent loans must relate to the costs of attendance at the institute including enrolment and material feesA schedule of repayments is agreed at commencement of the loan, with full repayment required prior to course completion dateStudents in arrears are contacted via telephone/letter/SMS to request payment and resolve any issuesAccounts overdue greater than 90 days are sent to a debt collection agency

Liquidity risk

The Institute minimises credit ris in relation to student loan receivables in the following ways:

The maximum exposure to credit ris at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance sheet and notes to the financial statements.

Funding ris is the ris of over reliance on a funding source to the extent that a change in that funding source could impact on the operating result for the current year and future years. The Institute continues to receive funding from the Victorian S ills Commission, however minimum funding levels have been removed from the Institutes performance agreement and therefore created the opportunity for other providers to access these funds.

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing funding ris or the methods used to measure this ris from the previous reporting period.

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing liquidity ris or the methods used to measure this ris from the previous reporting period.

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing credit ris or the methods used to measure this ris from the previous reporting period.

Ultimate responsibility for liquidity ris management rests with the institute's governing body, which has built an appropriate liquidity ris management framewor for the management of the short, medium and long-term funding and liquidity requirements. The institute manages liquidity ris by maintaining adequate reserves and ban ing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Institute manages credit ris in trade receivables in the following ways:

The Institute does not have any material credit ris exposure to any single receivable or group of receivables under financial instruments entered into by the Institute.

The Institute minimises concentration of credit ris by underta ing transactions with a large number of customers. The majority of customers are concentrated in Australia. The majority of customers relate to the provision of vocational and education services provided to industry and the community. The Institute continues to provide ongoing training, consultancy and other services for these customers.

The Institute manages funding ris by continuing to diversify and derive funding from commercial activities, both domestically and off shore.

There are no amounts of collateral held as security at 31 December 2011.

Liquidity ris is the ris that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.



NOTE 26 - 1




(i) Financial risk management objectives

(ii) Financial risk exposures and management

Carrying amount of financial instruments by category: 2011 2010$'000 $'000

Financial Assets Note CategoryCash and Deposits 5 Cash 36,135 14,094

Receivables (a) 6 Receivables 3,421 8,924

Fixed interest term deposits 7 Investments, loans and other financial assets 8,794 4,500 48,350 27,518

Financial liabilitiesPayables (a) 12 Financial liabilities 3,777 3,297

3,777 3,297

Net holding gain/(loss) on financial instruments by category: 2011 2010$'000 $'000

Financial Assets CategoryCash and Deposits 5 Cash 1,278 890 Receivables 6 Receivables (5) (91) Fixed interest term deposits 7 Investments, loans and other financial assets 44 56

1,317 855

Financial liabilitiesPayables 12 Financial liabilities - -

- - Note:

Market risk

Foreign currency risk

Price risk

Interest rate risk

Institute

(a) Receivables and payables disclosed here exclude statutory receivables and statutory payables.


The Institute is exposed to price ris in respect of fee for service and contract services which are subject to open mar et competition.

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing price ris or the methods used to measure this ris from the previous reporting period.

Interest rate movements have not been sufficiently significant during the year to have an impact on the Institute's year end result.

The objective is to manage the rate ris to achieve stable and sustainable net interest earnings in the long term. This is managed predominately through a mixture of short term and longer term investments. The Institute's exposure to interest rate ris s and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised at balance date are set out in the financial instrument composition and maturity analysis table.

The Institute's activities expose it to a variety of financial ris s: mar et ris (including currency ris , fair value interest rate ris , cash flow interest rate ris and price ris ), credit ris and liquidity ris . The Institute's overall ris management program focuses on the unpredictability of financial mar ets and see s to minimise potential adverse effects on the financial performance of the Institute by adhering to principles of foreign exchange ris , interest rate ris , credit ris , and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by management on a continuous basis. The Institute does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset and financial liability instrument is disclosed in note 1 of the financial statements.

The Institute's financial instruments consist mainly of deposits with ban s, local money mar et instruments, short term investments, accounts receivables and payables.

The main ris s the Institute is exposed to through its financial instruments are mar et ris , price ris , funding ris , interest rate ris , credit ris and liquidity ris .

The Institute in its daily operations is exposed to a number of mar et ris s. Mar et ris s relate to the ris that mar et rates and prices will change and that this will have an adverse affect on the operating result and /or net worth of the Institute. e.g. an adverse movement in interest rates.

The Board ensures that all mar et ris exposure is consistent with the Institute's business strategy and within the ris tolerance of the Institute. Regular ris reports are presented to the Board.

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing mar et ris or the methods used to measure this ris from the previous reporting period.

(iii) Categorisation of financial instrumentsInstitute

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing foreign currency ris or the methods used to measure this ris from the previous reporting period.

Interest rate ris arises from the potential for a change in interest rates to change the expected net interest earnings in the current reporting period and in future years. Similarly, interest rate ris also arises from the potential for a change in interest rates to cause a fluctuation in the fair value of the financial instruments.



NOTE 26 - 2

Financial Instruments (Part II)

26 Financial instruments

(ii) Summarised sensitivity analysis

+/-1% +/-2%

Result Result

31 December 2011 $'000 $'000 $'000 $'000 $'000

Financial assets

Cash and deposits - Cash at Ban 770 3.34% 26 8 15

Cash and deposits - Deposits at Call 35,365 4.51% 1,595 354 707

Receivables - Trade 1,421 - - - -

Receivables - Other Debtors 2,000 - - - -

Other financial assets - Available for sale financial assets - Current Term Deposits

8,794 4.59% 404 88 176

Other financial assets - Available for sale financial assets - Non-Current Term Deposits

- - - - -

Total increase/ (decrease) in financial assets 48,350 449 899


Payables - Creditors, Accruals 3,777 - - - -

Total increase/ (decrease) in financial liabilities 3,777 - - - -

Total increase/ (decrease) 449 899

+/-1% +/-2%

Result Result

31 December 2010 $'000 $'000 $'000 $'000 $'000

Financial assets

Cash and deposits - Cash at Ban 1,119 4.02% 45 11 22

Cash and deposits - Deposits at Call 12,975 4.89% 634 130 259

Receivables - Trade 1,176 - - - -

Receivables - Other Debtors 7,748 - - - -

Other financial assets - Available for sale financial assets - Current Term Deposits

4,000 4.86% 194 40 80

Other financial assets - Available for sale financial assets - Non-Current Term Deposits

500 5.06% 25 5 10

Total increase/ (decrease) in financial assets 27,518 186 372

Financial liabilitiesPayables - Creditors, Accruals 3,297 - - - -

Total increase/ (decrease) in financial liabilities 3,297 - - - -

Total increase/ (decrease) 186 372

Weighted average effective rate at the end of the financial year

Annual return at Weighted

Rate

Weighted average effective rate at the end of the financial year


Rate

The following table summarises the sensitivity of the Institute’s financial assets and financial liabilities to interest rate ris .

Carrying amount

Carrying amount

Interest rate risk

Interest rate risk



NOTE 26 - 3

Financial instruments (Part III)


(iii) Financial instrument composition and interest rate exposure

Weighted average

effective rate

Floating interest rate

Within 1 year

1-5 yearsMore than

5 years

Non-Interest Bearing

Total Carrying Amount per

Balance Sheet

% $`000 $`000 $`000 $`000 $`000 $`000

Financial assets


Cash at ban and on hand 3.34% 770 770

Deposits at call 4.51% 35,365 35,365

Contractual receivables

Receivables - Trade - 1,421 1,421

Receivables - Other - 103 103

Receivables - Amounts owing from government - 1,897 1,897

Other financial assets - Available for sale:

Current Term Deposits 4.59% 8,794 8,794

Non Current Term Deposits - -

Total financial assets 770 44,159 - - 3,421 48,350


Trade and other payables - 3,777 3,777

Total financial liabilities - - - - - 3,777 3,777

Weighted average

effective rate


Within 1 year

1-5 yearsMore than

5 years



Balance Sheet

% $`000 $`000 $`000 $`000 $`000 $`000

Financial assets


Cash at ban and on hand 4.02% 1,119 1,119

Deposits at call 4.89% 12,975 12,975







Non Current Term Deposits 5.06% 500 500

Total financial assets 1,119 16,975 500 - 8,924 27,518




(v) Ageing analysis of financial assets and financial liabilities

Less than 1 month

1 3 months

3 months – 1 year


Trade receivables 1,421 1,145 136 46 94

Other receivables 103 103

Amounts owing from government 1,897 1,897

Total 2011 financial assets 3,421 3,146 136 46 94

Financial liabilitiesTrade and other payables 3,777 3,510 245 9 13 2011 financial liabilities


Trade receivables 1,176 251 327 487 110





Trade and other payables 3,297 3,264 - 27 7

2010 financial liabilities

2010 Financial liabilities

The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management’s expectations of the settlement period for all other financial instruments. As such, the amounts may not reconcile to the balance sheet.

There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated. The following table discloses the contractual maturity analysis for the Institute's financial assets and financial liabilities.

2011 Financial assets


Carrying amount

Not past due and not

impaired

2011

2010

Maturity dates

Exposure to interest rate ris is insignificant. Minimisation of ris is achieved by mainly underta ing fixed rate or non interest bearing financial instruments. For financial liabilities, the Institute mainly underta es financial liabilities with relatively even maturity profiles.

2011 Financial liabilitiesFIN 38 The Gordon Financial Report 2011


NOTE 26 - 3




Weighted average

effective rate


Within 1 year

1-5 yearsMore than

5 years



Balance Sheet

% $`000 $`000 $`000 $`000 $`000 $`000

Financial assets


Cash at ban and on hand 3.34% 770 770

Deposits at call 4.51% 35,365 35,365







Non Current Term Deposits - -

Total financial assets 770 44,159 - - 3,421 48,350




Weighted average

effective rate


Within 1 year

1-5 yearsMore than

5 years



Balance Sheet

% $`000 $`000 $`000 $`000 $`000 $`000

Financial assets


Cash at ban and on hand 4.02% 1,119 1,119

Deposits at call 4.89% 12,975 12,975







Non Current Term Deposits 5.06% 500 500

Total financial assets 1,119 16,975 500 - 8,924 27,518




(v) Ageing analysis of financial assets and financial liabilities

Less than 1 month

1 3 months

3 months – 1 year


Trade receivables 1,421 1,145 136 46 94




Financial liabilitiesTrade and other payables 3,777 3,510 245 9 13 2011 financial liabilities


Trade receivables 1,176 251 327 487 110





Trade and other payables 3,297 3,264 - 27 7

2010 financial liabilities



There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated. The following table discloses the contractual maturity analysis for the Institute's financial assets and financial liabilities.



Carrying amount

Not past due and not

impaired

2011

2010

Maturity dates

Exposure to interest rate ris is insignificant. Minimisation of ris is achieved by mainly underta ing fixed rate or non interest bearing financial instruments. For financial liabilities, the Institute mainly underta es financial liabilities with relatively even maturity profiles.



NOTE 26 - 4

Financial instruments (IV)


Fair value estimation

Carrying Amount

Net Fair Value

Carrying Amount

Net Fair Value

26 Financial instruments $’000 $’000 $’000 $’000

Financial assets


Cash at ban and on hand 770 770 1,119 1,119

Deposits at call 35,365 35,365 12,975 12,975


Receivables - Trade 1,421 1,421 1,176 1,176

Receivables - Other 103 103 434 434

Receivables - Amounts owing from government 1,897 1,897 7,314 7,314


Current Term Deposits 8,794 8,794 4,000 4,000

Non Current Term Deposits - - 500 500

Total financial assets 48,350 48,350 27,518 27,518


Trade and other payables 3,777 3,777 3,297 3,297

Total financial liabilities 3,777 3,777 3,297 3,297

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The carrying amounts and aggregate net fair values of financial assets and liabilities at balance date are:

2011 2010

The carrying value less impairment provision of trade receivables and payables is a reasonable approximation of their fair values due to the short-term nature of trade receivables. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current mar et interest rate that is available to the entity for similar financial instruments.

Due to the short-term nature of the current receivables, their carrying value is assumed to approximate their fair value and based on credit history it is expected that the receivables that are neither past due nor impaired will be received when due.

For other assets and other liabilities the fair value approximates their carrying value.



NOTE 26 - 5

Financial instruments (Part V)


Terms, conditions and accounting policies

Recognised financial instruments Note Accounting policies Terms and conditions

FINANCIAL ASSETS

Cash and cash equivalents - cash at ban and on hand

5

Cash at ban is carried at the nominal amount.

Cash is invested as funds permit at varying interest rates between 3% and 4% (2010: 3% and 4%).

Cash and cash equivalents - deposits at call

5

Deposits at call are carried at their nominal amounts. Interest revenue is recognised in the comprehensive operating statement when it is earned.

Deposits at call have an average maturity of 61 days and effective interest rates of 4% to 5% (2010: 4% to 5%).

Receivables - debtors

6

Trade debtors are carried at amortised cost less any allowance for doubtful debts. An allowance for doubtful debts is maintained to recognise that collection of the full nominal amount is no longer probable.

Non-student credit sales are on 30 day terms (2010 - 30 days). Student credit sales are on a fee schedule for a period of up to 12 months (2010 - up to 12 months).

Receivables - other debtors

6

Other debtors are carried at amortised cost less any allowance for doubtful debts. An allowance for doubtful debts is maintained to recognise that collection of the full nominal amount is no longer probable.

Credit is allowed for a period up to 12 months (2010 up to 12 months).

Other financial assets: Assets available for sale - Current term deposits

7

Long term deposits are stated at their amortised cost or fair value depending on their classification on initial recognition. Interest revenue is recognised in the statement of comprehensive income when it is earned.

Current term deposits are invested for a maximum period of 5 Years at a weighted effective average interest rate of 4.59% (2010: 5%).

Other financial assets: Assets available for sale - Non Current term deposits

7

Long term deposits are stated at their amortised cost or fair value depending on their classification on initial recognition. Interest revenue is recognised in the statement of comprehensive income when it is earned.

Non Current term deposits are invested for a maximum period of 5 Years at the prevailing rate on the date the deposit is made (2010: 5%).

FINANCIAL LIABILITIES

Payables creditors and accruals

12

Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not invoiced to the Institute.

Trade liabilities are settled as required.

The Institute’s accounting policies, including the terms and conditions of each class of financial asset, financial liability, equity instruments and managed investment schemes, both recognised and unrecognised at reporting date, are as follows:

Statement of Performance - Gordon Institute of TAFEfor the year ended 31 December 2011

Key Performance Indicators 2010 Target 2011 CommentaryStudent Contact Hours (as per S ills Victoria Performance Agreement) 4,403,468 n/a 6,729,341 This represents an increase in 2011 of 2,325,873 which is in line with increase sub-contracting arrangements with 3rd parties reflected in revenue growth.Module Load Completion Rate - Scheduled hours assessed and passed or satisfactorily completed/Total scheduled hours reported less hours recorded with credit transfer and continuing studies outcome. 77.50% 81.00% 86.30%

This target is set by the Institute. Due to the substantial increase in 3rd party income, and the nature of these agreements, the Institute was able to acheive a much higher completion rate than in previous years.

Participation of 15 - 24 Year Olds - Number of students within the age group 5095 n/a 5225 2.5% growth on 2011 as a result of uncapped funding available for this cohort of studentsParticipation of 25 - 64 Year Olds - Number of students within the age group 5190 n/a 6284 21% growth on this student cohort as result of uncapped funding and sub-contracting arrangementsStudent Satisfaction - Proportion of graduates satisfied with the overall quality of training 92% n/a 89%

The Institute for the first time used outcomes of the National Centre for Vocational Education Research Ltd bi yearly survey. (therefore 2010 & 2011 relates to 2009 survey outcomes - 2011 was not available at time of publication) . The comparative figure was 87.7% which is in line with 2011.

Total Cost per Student Contact Hour (SCH) -Total funded expenditure (excluding Depreciation)/Total SCH $11.36 n/a $10.07

Total SCHs include training activity from all funding sources - government, fee for service and overseas full fee paying students. A significant increase in delivery has been facilitated by the Institute's ability to leverage off existing corporate infrastructure costs.Working Capital Ratio - Current Assets/Current Liabilities (adjusted for non-current Long Service Leave) 3.58 3.75 5.36 Better than expected financial performance has provided the Institute with additional cash.

Net Operating Margin - Funded Operating Surplus/Total Revenue (excluding Capital Funding) 9.08% 1.90% 21.52% Target exceeded as a result of un capped contestable funding and new sub-contracting arrangements which has opened new mar ets for the Institute.Fee for Service Revenue (Fee for Service Revenue/Total Revenue %) 9.54% 9.38% 5.82% FFS income less than budget for 2011 as a result of a significant increase in Government funded activity as well as capital funding received in 2011.Revenue per EFT - Total Revenue (excluding Capital)/Average EFT staff $114,523 n/a $151,947 33% increase on 2010 as a result of a 25% increase in revenue for 2011.Energy ConsumptionElectricity 6.85% n/a 3.04% Increased net building area due to Building G infill development and live wor area on line.

Gas 13.90% n/a 20.48% Decrease due to more efficient boilers installed in T building and decommissioning of a boiler in A building both at City CampusWater 7.15% n/a 7.62% Increase due to ageing infrastructure at the East Geelong campus particularly Building J.

Green Power 28.97% n/a 14.19% Increase - The Institutes' commitment to using 25% of Green power was achieved in 2011 increasing from 20% in 2010.

The Institute’s ris management and internal compliance and control system is operating efficiently and effectively in all material respects.

Chief Executive Officer Chief Finance & Accounting OfficerGrant Sutherland Joe Ormeno

Date Date

Attestation on compliance with the Australian / New ealand Ris Management Standard (AS/NZS ISO 31000).

We, Grant Sutherland and Joe Ormeno, certify that the financial report is founded on a sound system of ris management and internal compliance and control which implements the policies adopted by the Institute’s Board.


Statement of Performance - Gordon Institute of TAFEfor the year ended 31 December 2011

Key Performance Indicators 2010 Target 2011 CommentaryStudent Contact Hours (as per S ills Victoria Performance Agreement) 4,403,468 n/a 6,729,341 This represents an increase in 2011 of 2,325,873 which is in line with increase sub-contracting arrangements with 3rd parties reflected in revenue growth.Module Load Completion Rate - Scheduled hours assessed and passed or satisfactorily completed/Total scheduled hours reported less hours recorded with credit transfer and continuing studies outcome. 77.50% 81.00% 86.30%

This target is set by the Institute. Due to the substantial increase in 3rd party income, and the nature of these agreements, the Institute was able to acheive a much higher completion rate than in previous years.

Participation of 15 - 24 Year Olds - Number of students within the age group 5095 n/a 5225 2.5% growth on 2011 as a result of uncapped funding available for this cohort of studentsParticipation of 25 - 64 Year Olds - Number of students within the age group 5190 n/a 6284 21% growth on this student cohort as result of uncapped funding and sub-contracting arrangementsStudent Satisfaction - Proportion of graduates satisfied with the overall quality of training 92% n/a 89%

The Institute for the first time used outcomes of the National Centre for Vocational Education Research Ltd bi yearly survey. (therefore 2010 & 2011 relates to 2009 survey outcomes - 2011 was not available at time of publication) . The comparative figure was 87.7% which is in line with 2011.

Total Cost per Student Contact Hour (SCH) -Total funded expenditure (excluding Depreciation)/Total SCH $11.36 n/a $10.07

Total SCHs include training activity from all funding sources - government, fee for service and overseas full fee paying students. A significant increase in delivery has been facilitated by the Institute's ability to leverage off existing corporate infrastructure costs.Working Capital Ratio - Current Assets/Current Liabilities (adjusted for non-current Long Service Leave) 3.58 3.75 5.36 Better than expected financial performance has provided the Institute with additional cash.

Net Operating Margin - Funded Operating Surplus/Total Revenue (excluding Capital Funding) 9.08% 1.90% 21.52% Target exceeded as a result of un capped contestable funding and new sub-contracting arrangements which has opened new mar ets for the Institute.Fee for Service Revenue (Fee for Service Revenue/Total Revenue %) 9.54% 9.38% 5.82% FFS income less than budget for 2011 as a result of a significant increase in Government funded activity as well as capital funding received in 2011.Revenue per EFT - Total Revenue (excluding Capital)/Average EFT staff $114,523 n/a $151,947 33% increase on 2010 as a result of a 25% increase in revenue for 2011.Energy ConsumptionElectricity 6.85% n/a 3.04% Increased net building area due to Building G infill development and live wor area on line.

Gas 13.90% n/a 20.48% Decrease due to more efficient boilers installed in T building and decommissioning of a boiler in A building both at City CampusWater 7.15% n/a 7.62% Increase due to ageing infrastructure at the East Geelong campus particularly Building J.

Green Power 28.97% n/a 14.19% Increase - The Institutes' commitment to using 25% of Green power was achieved in 2011 increasing from 20% in 2010.

The Institute’s ris management and internal compliance and control system is operating efficiently and effectively in all material respects.

Chief Executive Officer Chief Finance & Accounting OfficerGrant Sutherland Joe Ormeno

Date Date

Attestation on compliance with the Australian / New ealand Ris Management Standard (AS/NZS ISO 31000).

We, Grant Sutherland and Joe Ormeno, certify that the financial report is founded on a sound system of ris management and internal compliance and control which implements the policies adopted by the Institute’s Board.


GORDON INSTITUTE OF TAFE

STATEMENT OF PERFORMANCE FOR YEAR ENDED 31 DECEMBER 2011

DECLARATION BY PRESIDENT OF THE BOARD, CHIEF EXECUTIVE OFFICER AND CHIEF FINANCE AND ACCOUNTING OFFICER

In our opinion, the accompanying Statement of Performance of Gordon Institute of TAFE in respect of the 2011 Financial Year is presented in accordance with the Financial Management Act 1994.

The Statement outlines the performance indicators as determined by the responsible Minister, pre-determined targets and the actual results for the year against these indicators, and an explanation of any significant variance between the actual results and performance targets.

As at the date of signing, we are not aware of any circumstance which would render any particulars in this Statement to be misleading or inaccurate.

The President of the Board and the Chief Executive Officer sign this declaration as delegates of, and in accordance with a resolution of, the Gordon Institute of TAFE.


Z:\Design & DTP\Samantha\01673 - MKT Booklet Gordon Annual Financial Report 2011\GOTEC 2011 Annual Report.xlsx

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Comprehensive Operating Statement - GOTEC LIMITEDfor the year ended 31 December 2011

Note 2011 2010$ $

Continuing operationsIncome from transactions

Interest income 3 1,952 470 Total income from transactions 1,952 470

Expenses from transactionsOther operating expenses 4 156 206 Total expenses from transactions 156 206

Net result from transactions (net operating balance) 1,796 264

Other economic flows included in net resultTotal other economic flows included in net result - -

Net result 1,796 264

Other economic flows – other non-owner changes in equityTotal other economic flows – Other non-owner changes in equity - -

Comprehensive result 1,796 264

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

Gotec LimitedFOR THE YEAR ENDED 31 DECEMBER 2011



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Balance Sheet - GOTEC LIMITEDas at 31 December 2011

Note 2011 2010$ $

AssetsFinancial assets 5

Cash and deposits 41,862 16 Receivables - 89 Investments, loans and other financial assets - 39,962


Non-financial assetsTotal non-financial assets - - Total assets 41,862 40,067

Financial liabilities 6Payables 41,345 41,345

Total financial liabilities 41,345 41,345

Net assets 517 (1,278)

Equity 7Accumulated surplus/(deficit) 517 (1,278)

Net Worth 517 (1,278)




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Statement of Changes in Equity - GOTEC LIMITEDfor the year ended 31 December 2011

Note


Total Comprehensive

result

Transactions with owners in their

capacity as owners


$ $ $ $Accumulated surplus/(deficit) 7 (1,278) 1,796 - 517 Accumulated surplus/(deficit) at the end of the year (1,278) 1,796 - 517

Contribution by owners at the end of the year - - - -

Total equity at the end of the year (1,278) 1,796 - 517

Note


Total Comprehensive

result

Transactions with owners in their

capacity as owners


$ $ $ $Accumulated surplus/(deficit) 7 (1,542) 264 - (1,278) Accumulated surplus/(deficit) at the end of the year (1,542) 264 - (1,278)

Contribution by owners at the end of the year - - - -

Total equity at the end of the year (1,542) 264 - (1,278)

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

Changes due to

Changes due to


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Balance Sheet - GOTEC LIMITEDas at 31 December 2011

Note 2011 2010$ $

AssetsFinancial assets 5

Cash and deposits 41,862 16 Receivables - 89 Investments, loans and other financial assets - 39,962


Non-financial assetsTotal non-financial assets - - Total assets 41,862 40,067

Financial liabilities 6Payables 41,345 41,345

Total financial liabilities 41,345 41,345

Net assets 517 (1,278)

Equity 7Accumulated surplus/(deficit) 517 (1,278)

Net Worth 517 (1,278)




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Cash Flow Statement - GOTEC LIMITEDfor the year ended 31 December 2011

Note 2011 2010$ $

Cash flows from operating activitiesReceipts

Interest received 8.1 2,040 381

Total receipts 2,040 381

PaymentsOther operating expenses 8.2 (156) (206)Total payments (156) (206)

Net cash flows from/(used in) operating activities 8 1,884 175

Cash flows from investing activitiesPayments for investment in term deposit - (39,962)Proceeds from maturity of investment 39,962 - Net cash provided by/(used in) investing activities 39,962 (39,962)

Cash flows from financing activities

Net cash provided by/used in financing activities - -

Net increase (decrease) in cash and cash equivalents 5 41,846 (39,787) Cash and cash equivalents at the beginning of the financial year 16 39,803 Cash and cash equivalents at the end of the financial year 41,862 16

The above cash flow statement should be read in conjunction with the accompanying notes.



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Notes to the Financial Statements - GOTEC LIMITEDfor the year ended 31 December 2011

NOTE 1

Principal Activities

1

Gotec Limited was incorporated on 15th May 1985, and is a company limited by guarantee. The principal objective of the company was toprovide vocationally oriented training to meet specific needs of business, industry, government and individuals not otherwise conducted asaccredited programs by the Gordon Institute of TAFE. From 1 January 1996 the operations of Gotec Limited were transferred to the GordonInstitute of TAFE.

Gotec Limited has no employees.

Principal Activities



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NOTE 2


1

2

Critical accounting estimates and judgments

Estimates

Judgements

2.1 Reporting entity

Its principal address is:2 Fenwick StreetGeelong Victoria 3220

2.2 Events after reporting date

2.3 Rounding of amounts

2.4 Comparative information

2.5 Cash and deposits

2.6 Revenue recognition

Amounts in the financial report have been rounded to the nearest dollar, unless otherwise stated.

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

Cash and deposits, including cash equivalents, comprise cash on hand and cash at bank, deposits at call and those highly liquid investments with an original maturity of three months or less, which are held for the purpose of meeting short term cash commitments rather than for investment purposes, and which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Investment income from cash and short-term deposits is brought to account on a proportional basis taking into account interest rates applicable to the financial assets.

For cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts, which are included as borrowings on the balance sheet.

Gotec Limited evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and internally.

Statement of compliance

Where appropriate, those AAS paragraphs applicable to not-for-profit entities have been applied.

These financial statement have been prepared in accordance with the historical cost convention. Historical cost is based on the fair values of the consideration given in exchange for assets.

Basis of accounting preparation and measurement

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

These general purpose financial statements have been prepared in accordance with the Financial Management Act 1994 (FMA) and applicable Australian Accounting Standards (AAS) which include Interpretations, issued by the Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements of the AASB 1049 Whole of Government and General Government Sector Financial Reporting.

These financial statements are presented in Australian dollars, the functional and presentation currency of the company.

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

Assets, liabilities, income or expenses arise from past transactions or other past events. Where the transactions result from an agreement between the company and other parties, the transactions are only recognised when the agreement is irrevocable at or before balance date. Adjustments are made to amounts recognised in the financial statements for events which occur after the reporting date and before the date the statements are authorised for issue, where those events provide information about conditions which existed at the reporting date. Note disclosure is made about events between the reporting date and the date the statements are authorised for issue where the events relate to condition which arose after the reporting date and which may have a material impact on the results of subsequent years.

The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. Judgements made by management in the application of AASs that have significant effects on the financial statements and estimates, with a risk of material adjustments in the next year, are disclosed throughout the notes to the financial statements.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 31 December 2011 and the comparative information presented for the year ended 31 December 2010.

In the application of AAS, judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Gotec Limited is a company limited by guarantee. The controlling entity of Gotec Limited is The Gordon Institute of TAFE.



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NOTE 2


2.7 Payables

2.8 Financial instruments

(i) Recognition and initial measurement

(ii) Derecognition of financial liabilities


(a) Financial assets at fair value through profit or loss

(b) Loans

(c) Financial liabilities

3.0 Equity

Gotec Limited is a not-for-profit company limited by guarantee and has no shareholders. As a result, it has no share capital in the

equity section of the Balance Sheet, only accumulated surplus/deficits.

4.0 Income TaxDue to it's status as a not-for-profit organisation, Gotec Limited is exempt from income tax.

Non-derivative financial liabilities are subsequently measured at amortised cost using the effective interest rate method.

Payables consist predominantly of a loan from the Gordon Institute of TAFE .

Payables are initially recognised at fair value, then subsequently carried at amortised cost and represent liabilities for goods and services provided to the company prior to the end of the financial year that are unpaid, and arise when the company becomes obliged to make future payments in respect of the purchase of these goods and services.

Financial instruments, incorporating financial assets and financial liabilities, are recognised when the company becomes a party to the contractual provisions of the instrument. Trade date accounting (the date on which the company commits to purchase or sell the asset) is adopted for financial assets that are delivered within timeframes established by marketplace convention.

Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value through profit or loss.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised as an ‘other economic flow’ in the estimated comprehensive operating statement.

Financial assets are classified at fair value through the statement of comprehensive income when they are held for trading purposes, where they are derivatives not held for hedging purposes, or designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy.

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Loans are recorded at amortised cost, using the effective interest method, less impairment.




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NOTE 3-7

NOTE 3-7

3 Income from transactions

2011 2010$ $

Interest income 1,952 470

4 Expenses from transactions

Other operating expenses 2011 2010

$ $

Other (Bank Fees) 156 206

Audit fees - -

Total expenses 156 206

5 Financial assets

Cash and deposits

Cash and cash equivalents 2011 2010

$ $

Cash at bank and on hand 1 41,862 16

Investments, loans and other financial assets 2011 2010$ $

Term Deposit - 39,962

Receivables 2011 2010$ $

Accrued income - 89

6 LiabilitiesPayables 2011 2010

$ $

Loan - Gordon Institute of TAFE 1 41,345 41,345

7 EquityAccumulated surplus/(deficit) 2011 2010

$ $

Balance at 1 January (1,278) (1,542)

Net operating result for the year 1,796 264

Total Equity 517 (1,278)

1 Gotec Limited has a non contractual loan from the Gordon Institute of TAFE. This loan is at call and is non-interest bearing. The loan will not be called subject to Gotec Limited having sufficient funds to meet its short term debts.

Supplies and services expenses are recognised as an expense in the reporting period in which they are incurred.

Amounts disclosed as income are, where applicable, net of returns, allowances and duties and taxes.

Investment income from cash and short-term deposits are brought to account on a proportional basis taking into account interest rates applicable to the financial assets

Audit fees are paid by the Gordon Institute of TAFE

Cash and deposits, including cash equivalents, comprise cash on hand and cash at bank, deposits at call and highly liquid investments with an original maturity of three months or less, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.

1 The weighted average effective interest rate for cash at bank was 1.0% (2010 - 0.8%)



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NOTE 8


8 Reconciliation of operating result after income tax to net cash flows from operating activities 2011 2010$ $

Net result for the year 1,796 264

Movements in operating assets and liabilitiesDecrease / (increase) in receivables 89 (89) Increase / (decrease) in payables - - Total movement in operating assets and liabilities 89 (89)

Net cash flows provided by/(used in) operating activities 1,884 175

8.1 Reconciliation of receipts 2011 2010$ $

Interest income 1,952 470 (Increase)/ Decrease in receivables 89 (89) Net cash flow from receipts 2,040 381

8.2 Reconciliation of payments 2011 2010$ $

Other operating expenses (156) (206) Increase/ (Decrease) in payables - - Net cash flow from payments (156) (206)


Reconciliation of cash flow from operating activities



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NOTE 9-13

NOTE 9-13

9 Director's remuneration

10 Commitments

11 Contingent Assets and Contingent Liabilities

12 Subsequent Events

2011 2010Subsequent events $ $Events occurring after reporting date are as follows:

- - Total events occurring after reporting date - -

13 Related PartiesGotec Limited is controlled by the Gordon Institute of TAFE

Outstanding balances

Related parties 2011 2010$ $

Current payables (loans)Controlled entity 41,345 41,345 Total Equity 41,345 41,345

The directors did not receive any remuneration from the company.

There are no contingent assets or contingent liabilities liabilities as at 31 December 2011 (2010: nil).

There are no commitments as at 31 December 2011 (2010: nil).



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NOTE 14





Fair value estimation

Terms, conditions and accounting policies

Recognised financial instruments Accounting policies Terms and conditions

FINANCIAL ASSETS

Cash and cash equivalents Cash at bank is carried at the nominal amount.Cash is invested as funds permit at varying interest rates between 0% and 1%


Short term deposits are stated at their amortised cost or fair value depending on their classification on initial recognition. Interest revenue is recognised in the statement of comprehensive income when it is earned.

Short term deposits are invested for a period of 3 months at the available effective interest rate on the day of deposit.

FINANCIAL LIABILITIES

Payables

Liabilities are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition, liabilities are measured at amortised cost with any difference between initial recognised amount and the redemption value being recognised in profit and loss.

Gotec Limited has a non contractual loan with the Gordon Institute of TAFE. This loan is at call and is non-interest bearing.

Gotec Limited's financial instruments consist mainly of deposits with banks, short term investments, accounts receivables and payables. The main risks Gotec Limited is exposed to through its financial instruments are interest rate risk and liquidity risk. Gotec Limited does not trade in any derivative instruments.

Financial instruments, incorporating financial assets and financial liabilities, are recognised when the company becomes a party to the contractual provisions of the instrument. Trade date accounting (the date on which the company commits to purchase or sell the asset) is adopted for financial assets that are delivered within timeframes established by marketplace convention.


The company's accounting policies, including the terms and conditions of each class of financial asset and financial liability both recognised and unrecognised at reporting date, are as follows:

Due to the short-term nature of the current receivables and current liabilities, their carrying value is assumed to approximate their fair value.



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NOTE 14

Financial Instruments (Part II)

14.1 Interest rate risk

Policy in managing

Summarised sensitivity analysis

+1% +2%

Result Result

$ % $ $ $Financial assetsCash and deposits - Cash at Bank 41,862 1.00% - - -

Investments, loans and other financial assets - - - - -

Total increase/ (decrease) in financial assets - -

+1% +2%

Result Result

$ % $ $ $Financial assetsCash and deposits - Cash at Bank 16 0.80% - - -

Investments, loans and other financial assets 39,962 4.76% 1,902 400 799

Total increase/ (decrease) in financial assets 400 799

There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing interest rate risk or the methods used to measure this risk from the previous reporting period.

Interest rate risk is managed by monitoring the outlook for interest rates and holding cash on hand and in term deposits.

The objective of managing interest rate risk it to minimise and control the risks of losses due to interest rate changes and to take advantage of potential profits.

Interest rate risk arises from the potential for a change in interest rates to change the expected net interest earnings in the current reporting period and in future years. Similarly, interest rate risk also arises from the potential for a change in interest rates to cause a fluctuation in the fair value of the financial instruments.

The following table summarises the sensitivity of Gotec Limited's financial assets to interest rate risk.

Carrying amount

Carrying amount

Weighted average

effective rate at the end of the financial year


Rate

Interest rate risk

Weighted average

effective rate at the end of the financial year


Rate

Interest rate risk

31 December 2011

31 December 2010



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NOTE 14


14.2 Liquidity risk

Policy in managing liquidity risk


Weighted average effective

rate


Within 1 year

1-5 yearsMore than

5 yearsNon-Interest

Bearing


Balance Sheet

Institute % $ $ $ $ $ $Financial assetsCash and deposits

Cash at bank and on hand 1.00% 41,862 - - - - 41,862 Other financial assets - Available for sale:

Current Term Deposits - - - - - - - Total financial assets 0 41,862 - - - - 41,862


Trade and other payables 1 - - - - - 41,345 41,345


Weighted average effective

rate


Within 1 year

1-5 yearsMore than

5 yearsNon-Interest

Bearing


Balance Sheet

% $ $ $ $ $ $Financial assetsCash and deposits

Cash at bank and on hand 0.80% 16 - - - - 16 Other financial assets - Available for sale:

Current Term Deposits 4.76% - 39,962 - - - 39,962 Total financial assets 16 39,962 - - - 39,978


Trade and other payables 1 - - - - - 41,345 41,345


Note1 Receivables and payables disclosed here as financial instruments exclude statutory receivable and statutory payables.

31 December 2011

31 December 2010

Liquidity risk arises from the ability to be able to meet financial obligations as they fall due.


Gotec Limited manages liquidity risk by monitoring cash flows and ensuring that maximum funds are available for investment and payment of financial liabilities.

There has been no significant change in the entity's exposure, or its objectives, policies and processes for managing liquidity risk or the methods used to measure this risk from the previous reporting period.

Exposure to interest rate risk is insignificant and may arise primarily through the company’s borrowings. Minimisation of risk is achieved by mainly undertaking fixed rate or non interest bearing financial instruments. For financial liabilities, the company mainly undertakes financial liabilities with relatively even maturity profiles. The company’s borrowings are overseen by management and any movements in interest rates are monitored on a daily basis.The company’s exposure to interest rate risk is set out below:


Declaration

FINANCIAL REPORT FOR YEAR ENDED 31 DECEMBER, 2011

DECLARATION BY THE DIRECTORS OF THE COMPANY

The directors of the company declare that:

1. The financial statements and notes are in accordance with the Corporations Act 2001:

(a) comply with Australian Accounting Standards and Corporations Regulations 2001; and

(b) give a true and fair view of the company’s financial position as at 31 December 2011 and of the financial performance for the year ended 31 December 2011.

2. In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

3. The attached financial statements of the company have been prepared in accordance with the Financial Management Act 1994, applicable Australian Accounting Standards and other mandatory professional reporting requirements.

4. We are not aware of any circumstance which would render any particulars in the financial statements to be misleading or inaccurate.

This declaration is made in accordance with a resolution of the Board of Directors.


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2 Fenwick St, Geelong Victoria, Australia 3220

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Boundary Road, East Geelong Victoria, Australia 3219

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142 Hearn St, Colac Victoria, Australia 3250

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Ph: (03) 5225 0800 Email: [email protected]

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Annual Report 2011 - parliament.vic.gov.au · ABN: 27 241 053 246 TOID: 3044 CRICOS No: 00011G...

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Transcript of Annual Report 2011 - parliament.vic.gov.au · ABN: 27 241 053 246 TOID: 3044 CRICOS No: 00011G...