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2013

1300

133 717advancetafe.edu.au

International callers +61 3 5152 0700

Interstate callers 03 5152 0700

PO Box 886 Bairnsdale Vic, 3875

ABN: 41 975 960 230

ANNUAL REPORT

‘Head To Head’ by 2013 Advance TAFE student Simon Glass - painted as part of his studies for Certificate II in Mumgu-dhal Tyama-tiyt

2013_ANNUAL REPORT_FINAL.indd 1 1/05/14 3:58 PM

The Hon. Nick Wakeling, MLAMinister for Higher Education and Skills

24 March 2014

Dear Minister,

In accordance with the requirements of regulations under the Financial Management Act 1994, I am pleased to submit for your information and presentation to Parliament, the Advance TAFE Annual Report for the year ending 31 December 2013.

The Annual Report was approved by the Advance TAFE Board on 24 March 2014.

Yours sincerely,

Mr Scott Rossetti Chair, Advance TAFE Board

Where to find us

Bairnsdale

Melbourne

Sale

Lakes Entrance

advancetafe.edu.au | 1300 133 717

SALE LOCATIONS Fulham CampusWork Safety Centre G-tec Sale Campus

BAIRNSDALE LOCATIONSBairnsdale Campus with G-tecBairnsdale Trade Centre Oaktree Restaurant

LAKES ENTRANCE LOCATION Seamec

We have three main campuses at Sale, Bairnsdale and Lakes Entrance, as well as specialist education centres located across south-east Victoria, encompassing the Wellington Shire and East Gippsland Shire region.

We deliver courses in online and blended learning programs across the state.

The Hon. Nick Wakeling, MLAMinister for Higher Education and Skills

24 March 2014

Dear Minister,


The Annual Report was approved by the Advance TAFE Board on 24 March 2014.

Yours sincerely,


Where to find us

Bairnsdale

Melbourne

Sale

Lakes Entrance







This Annual Report complies with the Standard requirements for the design and print of annual reports (FRD 30A) as reproduced at Attachment B of the Guidelines for 2013 TAFE Institute Annual Reports.

28 April 2014.

28 April 2014


WELCOME ...........................................................................................................................4

ABOUT ADVANCE TAFE ...................................................................................................5

GOVERNANCE AND MANAGEMENT ............................................................................6The BoardOrganisational ChartExecutive Team

STUDENTS AND STAFF ...................................................................................................8Support Services for StudentsHighlights of 2013Our PeopleCommercial Activities

OPERATIONS: STATUTORY REQUIREMENTS & STATEMENTS ............................14ComplianceRisk StatementAdvance TAFE declaration on Statement of PerformanceAuditor's Report on Statement of PerformanceStatement of PerformanceFinancial Summary

FINANCIAL STATEMENT ............................................................................................... 20Contents IndexAdvance TAFE DeclarationIndependent Auditor’s ReportFinancial Report

NOTES TO THE FINANCIAL STATEMENT ..................................................................27

DISCLOSURE INDEX ...................................................................................................... 67

Contents


4

Welcome

2013 has been a year of dramatic change in the Victorian Vocational Education and Training (VET) sector, filled with challenges and opportunities for Advance TAFE.

Major policy shifts have opened the educational sector to great competition where the demand for training is driven by market levers of price, information and supply contestability and new arrivals have established themselves on the landscape. Competition is greater than ever before.

In January of this year significant changes to funding arrangements came into effect, such as the removal of full service-provider funding, payments for ‘small’ (regional) TAFEs replaced by a 10% regional loading and the removal of the additional TAFE differential on training (around 20% above non-TAFE rate).

These changes to revenue streams along with the shift to a student-centred, demand-based funding system have meant Advance TAFE must implement reforms that reflect the needs of the changed marketplace.

As a result Advance TAFE has begun the process of instigating substantial changes to the direction of the organisation, to systems and infrastructure, and refining processes to ensure they are competitive and sustainable. Continual modification and adaptation of a business model committed to servicing our traditional markets of vocational training and a strong focus on engaging new cohorts, new markets, new partners and innovative courses are fundamental in Advance TAFE’s transition into a profitable, independent education provider.

A review of Advance TAFE’s offerings has led to the teach-out of some non-sustainable courses in 2014. The closure of the Advance TAFE Farmtec campus and Café Rossi, the commercial training restaurant, now effective, is an example of responsible asset management and reflects the retracting demand for some agricultural and hospitality courses.

Consistent with government reform objectives for greater collaboration between education providers, Advance TAFE entered into a Memorandum of Understanding with GippsTAFE and Federation University Australia to pursue a new formal partnership which seeks to create a sustainable future for Gippsland-based education and training. The new model will be developed further in 2014, as the outcome of the capital project bids submitted under the TAFE Structural Adjustment Fund and government investment in the preferred model is known.

Sectorial reform is also being driven by the ‘buyers’ of education and training as employers and students seek greater flexibility in course delivery approaches to accommodate work and home commitments.

Advance TAFE now has to support a more diverse student population with the changing nature of work creating a demand for not only pre-employment but life-long learning as the existing labour force must upskill to keep pace with the market economy.

Advance TAFE is meeting the training challenge to provide industry with suitably qualified employees. Throughout the year Advance TAFE transitioned many courses to be delivered online and modified teaching models to embrace new technologies, a growing focus on flexible delivery and a higher emphasis by employers on practical, work-based learning.

The planned departure of major manufacturers is a prime indicator that Victoria’s economy is fundamentally changing and transforming as service-oriented industries develop. Advance TAFE is well suited to and has a history of providing education and training for this changing workforce along with increasing pathways from VET to higher education.

On July 31 of this year Advance TAFE appointed a new Chief Executive Officer, Shaun McDonagh, who has extensive skills in strategy and business development. Shaun’s substantial skills and experience in achieving business growth objectives in education institutes and the private sector are well suited to challenges ahead. Advance TAFE would like to thank Acting Chief Executive Officer, Jane Ponting, for her stewardship during 2013.

Advance TAFE would also like to thank Lyndon Webb, who stepped down in April as Board Chair but continues to be a key member of the Board and incoming Board Chair, Scott Rossetti whose strong leadership and commitment to education augments the Board’s capacity for sound and strategic governance.

In June 2013 the Board welcomed Angus Hume as a Director and his presence has greatly benefitted Board deliberations.

Inevitably in the course of extreme change there are difficult challenges – 2013 could fairly be described as a year of challenges and Advance TAFE has faced them with a determination that reflects well on our staff, student and supporters in the community. The Institute looks forward to the challenges that next year will bring, confident that through the efforts of our people and our partners 2014 will see a transformation of both Advance TAFE and tertiary provision in the region.

Scott Rossetti Shaun McDonagh

Board Chair Chief Executive Officer


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Advance TAFE is the tertiary education provider for Victoria’s Eastern region with a heritage that dates back more than 100 years. Our campuses are located within the Wellington and East Gippsland Shires with a combined resident population of nearly 100,000. We also deliver training across Victoria and nationally.

Advance TAFE is a recognised TAFE Institution operating in accordance with the Education and Training Reform Act 2006. The Institute is a registered training organisation with the Australian Skills Quality Authority (ASQA). Throughout 2013 our governing Minister was the Hon. Peter Hall, MLC, Minister for Higher Education and Skills and Minister responsible for the Teaching Profession.

We provide nationally recognised training and qualifications from Certificate I level to Advanced Diplomas. Advance TAFE has over 150 courses encompassing a diverse range of study areas including:• Aviation• Automotive• Building & Construction• Business & Information Technology• Civil Construction & Engineering• Commercial Cookery• Community Services & Health• Conservation & Land Management• Design & Photoimaging• Education Support & Children’s Services• Food processing• Hairdressing• Horticulture• Maritime• Racing

Our students are able to complete their secondary education in an adult learning environment with VCE and VCAL studies coordinated through our specialist G-tec programs. Our partnerships with leading universities such as Federation University Australia and Deakin University have provided our students with the opportunity to study locally for full degrees and associate degrees.

About Advance TAFE

OUR VISION

OUR STRATEGIC DIRECTION STATEMENT 2009-2018 VISION IS FOR ADVANCE TAFE TO BE THE TERTIARY EDUCATION HUB OF VICTORIA’S EASTERN REGION.

WE DELIVER WORLD-CLASS TRAINING, HIGHER EDUCATION AND WORKFORCE DEVELOPMENT SOLUTIONS.

OUR GRADUATES ARE RECOGNISED AS CONTRIBUTORS TO GLOBAL, SOCIAL AND ECONOMIC WELLBEING.

TO ACHIEVE OUR VISION WE WILL:

1. CONNECT THROUGH LEARNING

2. BUILD OUR SKILLS AND CAPABILITY

3. ENGAGE AND COLLABORATE

4. PROVIDE WORKFORCE SOLUTIONS

5. BUILD OUR MARKET SHARE


6

Governance & management

THE BOARDThe Institute Board is established under the Constitution of Advance TAFE, which was created by an Order in Council dated 10 April 2013 and published in the Government Gazette. By virtue of the Constitution, the Institute is a Body Corporate by operation of sections 3.1.12 and 6.1.32 of the Education and Training Reform Act 2006. In accordance with section 3.1.11(2) of the Act, the Board of Advance TAFE is established to oversee and govern the Institute.

The Board’s business is consistent with the powers and functions set out in the Institute Constitution.

The terms of reference and accountabilities of the Board Committees are provided in the Board Manual.

Board Directors discharge their duties according to standards of conduct articulated in Division 9 of the Constitution and relevant legislation, such as the Public Administration Act 2004.

2013 ADVANCE TAFE BOARD MEMBERS

BOARD MEMBER CATEGORY OF MEMBERSHIP COMMENCEMENT DATE EXPIRY DATE

Mr Scott Rossetti (Chair April 2013 ongoing) Ministerial Nominee 1/9/2013 30/4/2015

Mr Andrew Reynolds(Vice-Chair) Board Nominee 1/9/2013 30/4/2016

Mr Lyndon Webb(Chair to April 2013) Ministerial Nominee 1/9/2013 30/4/2014

Mr Tim Weight Board Nominee 1/9/2013 30/4/2014

Ms Thelma Hutchinson Board Nominee 1/9/2013 30/4/2015

Ms Catherine Greaves Ministerial Nominee 1/9/2013 30/4/2016

Mrs Gabrielle Bell Ministerial Nominee 1/9/2013 30/4/2014

Mrs Diane Wilkinson Board Nominee 1/9/2013 30/4/2016

Mr Angus Hume Ministerial Nominee 1/9/2013 30/4/2015


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EXEC MANAGERCORPORATE SERVICES

EXEC MANAGERLEARNING & INNOVATION

Karen BirdNick Fordham

ACTING MANAGER COMMUNITY SERVICES, EDUCATION & HEALTH

Di Deppeler

MANAGER INFORMATION TECHNOLOGY SERVICES

Vacant

MANAGER MARKETING & CORPORATE COMM

Paula White

EXECUTIVE ASSISTANT TO CEO

Sharon Junker

CHIEF FINANCE OFFICERBrenton Barker

MANAGER POLICY & QUALITY (BOARD SECRETARY)

ACTING MANAGER BUSINESS DESIGN & SERVICE INDUSTRIES

Martin Grundy

SUB-TEAM LEADER FINANCE

Bernie Kelly

ACTING MANAGER HUMAN RESOURCES

David Kee

QUALITY ASSURANCE CO-ORDINATOR

Trish Shemlowski

MANAGER TRADES & WORK SAFETY

Fred Vanderslik

Steven Columbus

CO-ORDINATOR RISKVacant

MANAGER CATCHMENT LAND & SEA MANAGEMENT

Richard OwenRob Strecker

MANAGER FACILITIES MANAGER YOUTH KOORI & GENERAL EDUCATION

Pam Waters

MANAGER, BLENDED DELIVERY

Tony Peck

MANAGERSTUDENT SERVICES

Craig Kingham

ACTING MANAGERHEALTH, SAFETY & RISK

Chris Rankin

MANAGERSTUDENT ADMIN

Kerrie-Lyn Young

MANAGEReLEARNING

Vacant

ACTING MANAGER, HIGHER EDUCATION PROJECTS

Lynda Capes

BUSINESS DEVELOPMENT Marcia Thomas

BOARD

CHIEF EXECUTIVE OFFICERShaun McDonagh

EXECUTIVE TEAM

Shaun McDonaghChief Executive OfficerAppointed: 31 July 2013

Responsibility: Providing strategic leadership and management. Securing resources and ensuring their effective utilisation across the institute to meet the requirements of government, enterprises and individuals. Implementing the strategic direction established by the Institute’s Board.

Brenton BarkerChief Finance OfficerAppointed: 23 September 2013

Responsibility: Providing executive leadership for the efficient and effective management of the Institute’s financial resources.

Karen BirdExecutive Manager Learning InnovationAppointed: 30 September 2013

Responsibility:

Providing strategic and operational educational leadership to teaching and support teams, and giving direction and advice on all educational policy, innovation and planning issues and on student management.

Nick FordhamExecutive Manager Corporate ServicesAppointed: 30 September 2013

Responsibility:Providing executive and operational leadership for the Institute’s facilities, assets and equipment and information technology services. The role also has the corporate responsibility for Workplace Health & Safety.

EXECUTIVE TEAM RESIGNATIONS DURING 2013

Catherine BriggExecutive Manager Learning and InnovationAppointed: 20 July 2003Resigned: 12 July 2013

Jane PontingExecutive Manager DevelopmentAppointed: 19 August 2011Resigned: 13 September 2013

Acting CEOAppointed: 22 December 2012Resigned: 30 July 2013

Peter QuilliganExecutive Manager Corporate ServicesAppointed: 4 April 2005Resigned: 1 July 2013


8

Support Services for Students

ACCESS & EQUITYAdvance TAFE support for students in priority access and equity groups continued in 2013. The goal of access and equity support is to improve the participation in education of groups experiencing disadvantage and unequal educational outcomes.

Promotion of qualifications, and the increased likelihood of employment that occurs following successful completion, is a key component of student engagement, especially of learners that may be difficult to engage. Support is tailored to individuals to maximise their success through building aspirations, developing self-esteem, and promoting engagement.

Work in this important area is promoted by all staff at Advance TAFE - from initial engagement through to graduation. Specialist support staff include: Koori Liaison, Disability, Counsellors, Careers and Foundation-skills trainers.

SCHOLARSHIPSAdvance TAFE offered more than $50,000 in scholarships in 2013. A sizeable component of this amount was externally sourced scholarships, including Industry Funds.

Scholarships are awarded to students who experienced disadvantage, further supporting engagement of underrepresented groups.

In 2013, the following scholarships were awarded:The Advance TAFE Dream Study Achieve Scholarships for students under 25 (four awarded).The Advance TAFE Community Engagement Scholarships, for students experiencing financial hardship (12 awarded).The Advance TAFE Disability Scholarships assisted three students with disabilities or mental health conditions to engage in study.Industry Fund scholarships for Maritime study (worth $26,000).Dairy Industry Scholarships (two awarded) – external scholarship.Kids Under Cover Scholarships (five participants) – external scholarships with applications made via Department of Human Services.

COUNSELLING AND WELFARE SERVICESAdvance TAFE counsellors provide responsive clinical services and referral for students who significantly foster ongoing study engagement and a greater course completion level.

Welfare services and referral are also an important component of student support. Welfare support assists students with the essential requirements to engage in learning - stable accommodation, transport, income, peer and external support. In the Gippsland region, meeting these basic needs may be problematic for an individual, but linking vulnerable students to these channels of external support enhances the likelihood of successful learning outcomes.

During 2013, more than 400 students benefited from counselling or welfare support. Interventions varied according to the intensity and critical need experienced by the individual needing help.

DISABILITYIn 2013, 34 students registered for disability support. Support for students with disabilities is allocated in a manner to promote student independence – where needed, students are assisted to recognise their minimum requirements for their education at Advance TAFE. Support can include a Disability Support Worker, but this level of support is only for targeted needs and is reduced as the student builds confidence and knowledge.

CAREER ADVICESpecialised career advisors assist students with course advice, sourcing placements, and in making informed decisions about the availability and likelihood of successful career engagement following completion of education.

Advance TAFE Career Counsellors also liaise with networks across Gippsland, and participate in specialist activities such as resume writing and job interview skills with students and with specialist programs.

ACCESS PROGRAMSWe participated in four Australian Apprenticeship Access Programs in 2013. These pre-vocational training programs are designed with local brokers to engage job seekers experiencing difficulties in finding skilled employment. Job seekers are provided with job skills, including career and pathway planning and work readiness.

THROUGHOUT 2013 ONGOING PROFESSIONAL SUPPORT FOR ADVANCE TAFE STUDENTS SUBSTANTIALLY CONTRIBUTED TO SUCCESSFUL STUDY OUTCOMES.


9

Highlights of 2013CHANGE AT THE TOPIn April Wellington Shire Mayor Scott Rossetti was announced Advance TAFE board chairman, replacing Lyndon Webb, who was forced to retire from his chairmanship for health reasons. He remains on the board.

In August, Advance TAFE welcomed the appointment of its new chief executive officer, Shaun McDonagh. Mr McDonagh came to Advance TAFE from Brisbane having held a range of senior executive roles in education and training institutes and private sector services industries. Mr McDonagh holds multiple graduate qualifications including from the Kellogg School of Management at Northwestern University and has substantial skills and experience in achieving business growth objectives and organisational change and is currently leading Advance TAFE through a period of significant change.

PARTNERSHIP WITH FEDERATION UNIVERSITY The Victorian Government’s formation of Federation University Australia created new opportunities for Advance TAFE in the form of collaboration with an established university with hands-on experience of providing regional solutions for our students. This collaboration will continue to take shape in 2014.

STUDENT MANAGEMENT SYSTEMThe Victorian Government’s commitment to streamlining student management and enrolment came to fruition in 2013. The four-year, $80-million investment went live at Advance TAFE on 3 June 2013.

HELPING REBUILD COMMUNITIESAdvance TAFE’s vocational students took to the paddocks of farms devastated by bushfires during January. G-tec students were heavily involved in BlazeAid, and helped local farmers rebuild after bushfires had destroyed homes, livestock, shedding, fences, and water infrastructure.

MAINTAINING CLOSE COMMUNITY TIESAdvance TAFE’s e-learning and Business, Design and Service Industries teams in collaboration with local shires developed a ‘virtual visitor’ project, to reduce the social isolation of residents living in aged-care facilities in East Gippsland, Wellington and Baw Baw Shires. Working with five aged care facilities, e-learning taught volunteers and staff to assist residents connect with friends and family members via a Skype video link. Advance TAFE staff produced a DVD of interviews with residents who were involved with the project.

COLLABORATIVE TRAINING FLOURISHESOver 70 regional students commenced the Diploma of Community Health, an innovative course developed through a regional partnership between Advance TAFE, GippsTAFE and Monash University. This Victorian Government Initiative, supported by the Regional Partnerships Facilitation Fund, and funded by the Regional Growth Fund addresses the demand for trained community health professionals. Interest for this course has remained strong with Advance TAFE receiving over 40 applications in 2013 for the next year's intake.

OLYMPIC EFFORTSale G-tec student and basketball star Skye Neilson-Vold, 20, represented Australia at the first Special Olympic Asia Pacific Regional Games in December. Advance TAFE was directly involved in helping her raise funds so she could make the trip to represent her country.

MORE STUDENT SUCCESSDual Diploma graduate, Kelly Treyvaud, reached the finals of the 2013 Victorian Trainee of the Year. Kelly was one of only four in her category and proudly took her place on stage with the other finalists at the Melbourne awards night. Kelly graduated with a dual Diploma of Business and Diploma of Management, studied flexibly through Advance TAFE in Sale, and achieved Distinctions in seven of her eight units.

A former Advance TAFE hospitality student swept the East Gippsland Business Awards, taking out the major prize and another three for his café in the Bairnsdale business district.

Matt Henderson, owner of Hendo’s Café, won the Most Outstanding Business, Hospitality Business, Child and Family Friendly Business and Customer Service Excellence awards. Matt was also the first inductee into the Advance TAFE Hall of Fame, for high-achieving former students.

AVIATION DONATIONEmphasising Advance TAFE’s close ties with industry, Hawker Pacific Pty. Ltd. donated two power carts and four Hartzell propeller blades to the aviation division.

Hawker Pacific has a number of large aircraft maintenance facilities across Australia and overseas. It has had a base at East Sale since 2002, providing maintenance support services for the KingAir B350 aircraft.

John Patten, Advance TAFE’s Aviation coordinator, said the donations would enable students to gain further practical experiences as well as providing a valuable training aid for the classroom.

Hawker Pacific also donated two Metcalf 28V aircraft power carts, which Mr Patten said would complement the growing number of working assets utilised by the Aviation team.

WINNING APPRENTICESThe year began well for our apprentices, with Upper Maffra West’s Ryan Wheeler winning the Victorian Regional Apprentice of the Year with the Master Builders Association of Victoria (MBAV).

MBAV careers manager Jarrod Flanigan said of Ryan: “Having grown up in the industry, Ryan’s professionalism and enthusiasm make him a fantastic future builder.”

Then, just a month later , Joel Hutchison, 20, from Swan Reach, won the Civil Contractors Federation Victorian Apprentice of the Year.

His employer, Whelan’s Earthmoving, said of Joel: “He had a willingness to learn all machines, he does a good job overall and if he says he’s finished a job, we trust him.”

Advance TAFE is proud of the achievements of its young apprentices and would also like to recognise the talents of our dedicated teaching staff, in particular Civil Construction trainer Trevor Ingram.


10

Our peopleADVANCE TAFE HAS A WORKFORCE DEDICATED TO PROVIDING SUPERIOR CUSTOMER SERVICE AND EXCELLENCE IN TEACHING.

PEOPLE MATTERThe People Matter survey benchmarks comparative data for gauging staff satisfaction. Advance TAFE continues to perform well relative to our peers, scoring in the top quartile of Victorian comparator TAFEs in 8 of 15 themes. However, only two years ago the Institute scored in the top quartile for 13 of 15 themes. The results reflect continuing uncertainty among our staff in the face of ongoing reform of the TAFE sector. Overall job satisfaction has rebounded slightly from 2012, but staff perceptions of job security remain the lowest in our comparator group. On a positive note staff recorded a strong improvement in their perceptions of the organisation’s integrity and leadership.

PROFESSIONAL DEVELOPMENT AND STUDY SUPPORTAdvance TAFE staff have the opportunity and access to a variety of professional development training and programs. Staff are also strongly supported to take up further study. In 2013 Advance TAFE supported the qualifications shown in the table below:

TITLE OF QUALIFICATION

Certificate IV in Training & Assessment -update to TAE40110 57

Certificate IV in Training & Assessment 9

Associate Degree in Training and Education 9

Graduate Certificate in Education 4

Graduate Certificate in Education (tertiary teaching) 2

Diploma of Community Services 2

Certificate IV in Career Development 2

Certificate IV in Commercial Cookery 2

Certificate IV in Disability (2 units) 1

Certificate IV in Accounting 1

Certificate IV in Photoimaging 1

Certificate IV in Home And Community Care 1

Certificate III in Civil Plan Operations 1

Certificate III in Civil Road Construction & Maintenance 1

Diploma of Accounting 1

94

Advance TAFE also received funding in 2013 from the VET Development Centre to build workforce capacity through making available professional development programs for teaching staff.

TEACHING FELLOWSHIPS:• Mark Shelton • Merralyn Barnes

SPECIALISTS SCHOLARSHIP:• Jacqueline Hocking

Customer service training now forms part of the induction process for all new staff. In 2013, 27 staff completed this training.

STAFF RECORDED A STRONG IMPROVEMENT IN THEIR PERCEPTIONS OF THE ORGANISATION’S INTEGRITY AND LEADERSHIP.


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STAFF PROFILE DECEMBER 2013 - CURRENT YEAR DECEMBER 2012 - PRIOR YEAR

Employee - all Ongoing Fixed term & Casual Employee

- all Ongoing Fixed term & Casual

Head

coun

t

FTE

Head

coun

t

FTE

Head

coun

t

FTE

Head

coun

t

FTE

Head

coun

t

FTE

Head

coun

t

FTE

EMPLOYMENT STATUS

Full time 119 119 91 91 28 28 127 127 88 88 39 39

Part time 119 65 47 29 72 36 159 87 50 34 109 53

Total 238 184 138 120 100 64 286 214 138 122 148 92

GENDER

Male 90 76 55 51 35 25 111 87 62 57 49 30

Female 148 108 83 69 65 39 175 127 76 65 99 62

Total 238 184 138 120 100 64 286 214 138 122 148 92

AGE (HEADCOUNT ONLY)

Under 25 3 0 3 11 1 10

25-34 24 14 10 33 13 20

35-44 59 29 30 62 29 33

45-54 77 50 27 91 47 44

55-64 69 42 27 84 46 38

Over 64 6 3 3 5 2 3

Total 238 138 100 286 138 148

DECEMBER 2013 - CURRENT YEAR DECEMBER 2012 - PRIOR YEAR

Headcount FTE Headcount FTE

CLASSIFICATION

Executives 4 4 4 4

Teaching - full & part time

101 85 117 96

Teaching - casual 23 8 21 8

PACCT - full & part time

93 78 94 81

PACCT - casual admin & student support staff

9 3 36 13

Other* - full part time

8 6 14 12

Advance TAFE operate an online induction program for all new employees. All employees are required to undertake their duties in accordance with the Advance TAFE code of conduct. Our HR systems correctly categorise all the workforce in data collections.


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Commercial ActivitiesBUSINESS DESIGN & SERVICE INDUSTRIES (BDSI)Advance TAFE’s BDSI team delivered business, finance and IT training to a wide range of commercial clients across Gippsland and beyond in 2013. Training in customer service, Microsoft Office application software (Word and Excel), professional service, stress management and project management was delivered to key clients including Latrobe Health Services, East Gippsland Shire, Wellington Shire, Patties Foods, Murray Goulburn and Bairnsdale Regional Health Services.

Through an association with Training Aircraft Systems Program Office (TASPO) we delivered the Diploma of Business, progressing to the Advanced Diploma of Business, to a large cohort of staff, stimulating such a desire for learning that many of these students intend to take advantage of our pathways to degree programs in 2014.

Advance TAFE continued to service remote areas by providing training solutions to The Alpine School at Dinner Plain, Dargo Neighbourhood House and the community of Marlo in East Gippsland.

Hospitality training with a focus on ‘work ready skills’ such as Responsible Service of Alcohol, Responsible Service of Gaming and cafe skills was rolled out to senior students from local secondary schools in the Gippsland region.

Our Training and Assessment teaching program went from strength to strength, with commercial flexible training conducted both onsite and on campus with the Department of Environment and Primary Industries (DEPI), Country Fire Authority (CFA), State Emergency Service (SES), and OneHarvest.

The ‘Virtual Visiting program’ born from a partnership with East Gippsland, Wellington and Baw Baw Shire Councils saw staff and volunteers at five aged care facilities throughout Gippsland given IT training designed to assist residents in connecting with their families through various online platforms such as Skype and FaceTime.

Our contractual training with FreeSpirit was strengthened with a focus on creating innovative blended and online learning resources for Caravan Parks and Resorts qualifications, to expand training opportunities throughout Australia, and with future plans to collaboratively enter China’s training market.

CATCHMENT, LAND & SEA MANAGEMENT (CLSM)In 2013 Advance TAFE continued their partnership with EPA Victoria to help preserve Victoria’s natural water ecosystems and marine environments. Water quality testing in the Gippsland Lakes was conducted by Advance TAFE, which collects data on oxygen conditions, nutrient and toxicants levels, algae composition and water clarity. This data is crucial as not only does it provide water quality trends over time but also allows for timely alerts to EPA Victoria of any changes or imbalance such as the recent example of excess that led to increased algal blooms, negatively impacting the Gippsland Lakes ecosystem and its recreational use.

Advance TAFE was commissioned by Gippsland Ports to undertake a turbidity monitoring program carried out during the Lakes Entrance dredging period of 11 November to 20 December 2013.

Other major commercial activity involved the training of the DEPI 2013 intake of project fire fighters.

Advance TAFE’s CLSM team explored a variety of initiatives for further development in 2014 including:• Delivery of Cert III Racing to South Australian racing industry• Fire recovery and rehabilitation works in eastern Victoria (DEPI)• Delivery of AMSA approved STCW95 Certificate of Sea Safety

Training• Fisheries Research Development Corporation/Australian

Fisheries Management Authority development and delivery of crew certification for commercial fishing operations

• Delivery of Cert II and III Seafood Processing to LEFCOL• Delivery of pest management and trapping skillset as part of

DEPI licensing requirements• Development of ‘Respond to wildlife emergencies’ skillset for

DEPI staff and volunteers involved with cetacean standings’ and entanglements, fire affected wildlife and oiled seabirds.

COMMUNITY SERVICES EDUCATION & HEALTH (CSEH)For CSEH it was a year of change with the concentration on our profile courses. The team submitted a number of tenders in 2013. As cost was found to be a major determining factor on success, work was initiated to revise training models to deliver more productive and competitive community services education.

On a positive note, there was further expansion across the state of the online staff induction program developed by Advance TAFE for the Department of Human Services (DHS).


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TRADES & WORK SAFETYOur Trades & Work Safety team engaged in a variety of commercial activities during 2013. Key partners included GippsAero, Apprenticeship Group Australia (AGA), TDT Training, Civil Contractors Federation, ExxonMobil Australia, GippsTAFE and The Gordon.

Automotive restoration classes incorporating the use of English wheel machines were welcomed by car enthusiasts who had come to learn the skills needed to shape pieces of metal into rounded panels for their classic vehicles. Other short courses delivered included vehicle paint and protection along with metal polishing. Advance TAFE strengthened its partnership with GippsAero, a producer of general aviation aircraft designed specifically to meet niche aviation markets, through the provision of training directed at organisational efficiency solutions.

This year also saw the development of an online learning option for the Certificate II in Bicycles Mechanical Technology in collaboration with Bicycle Industry Australia (BIA).

Our engineering team developed a training program for experienced welders wishing to obtain the theory and practical skills to meet the assessment requirements specified in Australian Standard 1796-2001. Course participants, upon successful completion (and also dependant on the 1-9 welding certificate undertaken), were then certified to weld high quality applications on plain carbon and/or low alloy steel plate and pipe sections.

Our Building & Construction team devised a series of Work, Health & Safety (WH&S) training programs targeted as an introduction to the construction industry as well as delivering WH&S for managers and supervisors already working in the industry.

In 2013 Advance TAFE’s Work Safety Centre commercial training programs focused on delivery in three key areas:• Work Health & Safety• High Risk Work• Civil Operations

YOUTH, GENERAL EDUCATION & KOORIAdvance TAFE was again contracted to deliver the Skills for Education and Employment (SEE) program.

The SEE program provides language, literacy and numeracy training to job seekers who are having difficulties securing employment. Students are referred to Advance TAFE by Job Services Australia (JSA) agencies such as Workways, Mission Australia, CRS Australia, Advanced Personnel Management and Work Solutions.

In 2013 Advance TAFE became the sole provider for the SEE program for the East Gippsland region when other training organisations discontinued this service. With the requirement of face-to-face delivery, lack of public transport connections to outlying towns and regions prohibits access to this important education service for many potential students.

The recent shift in government policy and reduction to Vocational Education and Training (VET) funding arrangements for secondary schools has created pressure on these programs being run in-house. As a result Advance TAFE’s Vocational Education and Training in Schools (VETiS) operation has experienced growth.

Around 600 students from 18 secondary schools across East Gippsland and Wellington shires attended VET programs at Advance TAFE in 2013. Major career areas that training was delivered in included:• Building & Construction• Automotive• Engineering• Agriculture / Horticulture• Small Business• Media & Information Technology• Hair & Beauty• Hospitality (Kitchen Operations)• Children’s Services

Advance TAFE continued to provide vocational education and training services to prisoners at the Marngoneet Correctional Centre in 2013 with the focus on improving the employment opportunities of prisoners upon their release.

A series of work was undertaken to structure training programs to ensure prisoners are able to continue their course as they moved through the prison system.

Both parties agreed to an extension of the existing contract which will now run until the end of 2014.

E-LEARNING The Advance TAFE e-Learning team further developed the induction program for staff at Gippsland Ports. Originally the safety induction training was produced on CD but in 2013 it was updated to an online application that is hosted commercially on Advance TAFE’s Moodle platform.

THERE WAS STATE WIDE EXPANSION OF THE ONLINE STAFF INDUCTION PROGRAM FOR DHS.


14

Compliance

ADDITIONAL INFORMATION AVAILABLE ON REQUESTConsistent with the requirements of the Financial Management Act 1994, Advance TAFE has prepared material on the following items, details of which are available on request: • statement regarding declarations of pecuniary interest• shares held beneficially by senior officers as nominees of a

statutory authority or subsidiary• publications and where they are located• changes in prices, fees, charges, rates and levies• major external reviews• major research and development activities• overseas visits undertaken• major promotional, public relations and marketing activities• assessments and measures undertaken to improve the

workplace health and safety of employees• industrial relations issues• major committees sponsored by Advance TAFE.

Enquiries regarding details of the above should be addressed to:Nick Fordham, Executive Manager Corporate ServicesAdvance TAFE, PO Box 886, Bairnsdale Vic. 3875

Advance TAFE complies with all relevant legislation and subordinate instruments, including, but not limited to, the following:• Education and Training Reform Act 2006 (ETRA)• TAFE institute constitution• Directions of the Minister for Higher Education and Skills (or

predecessors)• TAFE institute Commercial Guidelines• TAFE institute Strategic Planning Guidelines• Public Administration Act 2004• Freedom of Information Act 1982• Building Act 1983• Protected Disclosure Act 2012• Victorian Industry Participation Policy Act 2003Commentary against relevant Acts is provided below, as appropriate.

BUILDING ACT 1993Advance TAFE ensures that all works requiring building approval have plans certified, works in progress inspected and occupancy permits issued by independent building surveyors engaged on a job by job basis. It also ensures that plans for these works are lodged with the relevant local council.

A register of building surveyors and the jobs that they certified is maintained. The Institute requires all building practitioners engaged on its works to show evidence of current registration upon their engagement. A condition of their contracts with the Institute is that they maintain their registered status for the course of their contract.

All practitioners engaged by the Institute maintained their registered status throughout the year. During the year, as indicated in the accompanying table, works and maintenance were undertaken to maximise conformity to relevant standards.

BUILDING WORKS NO.

Buildings certified for approval 1Works in construction and the subject of mandatory inspections 0

Occupancy permits issued 2

MAINTENANCE NO.

Notices issued for rectification of sub-standard buildings requiring urgent attention

0

Involving major expenditure and urgent attention 1

WORKPLACE HEALTH AND SAFETYAdvance TAFE recognises its legal and moral obligations, in particular under the OH&S Act and associated regulations, to provide a safe and healthy work environment for staff, students, clients, visitors and contractors. The Institute has developed a WH&S Policy and Management System to support that policy. The Institute’s WH&S policy is reviewed annually and aims to:• safeguard all persons from occupational injury or illness• provide resources and funding sufficient to maintain an effective

health and safety program• comply with all relevant, statutory WH&S requirements.

Advance TAFE’s commitment is outlined in the WH&S policy statement that is on display at each Institute campus and available on the Intranet and Internet.

Details of management, employee and contractor responsibilities are contained in the WH&S Management System, with detailed requirements defined in the various WH&S procedures that deal with specific WH&S risks. Wherever practicable, safety, quality, environmental and people requirements are built into the management policies and procedures in support of the Institute’s vision of “Sustainability in everything that we do”. Management and employee performance in relation to these responsibilities is assessed through annual staff performance development reviews.

The Institute has a WH&S Management System to minimise the likelihood of an injury occurring, and a Return to Work Program administered through the Human Resources Department to ensure an effective recovery from any work related injuries that do arise.

The effectiveness of the Institute’s WH&S management is reflected in our claims history. In 2013, the Institute recorded:

WH&S CLAIMS

Medical treatment injuries 2Lost time injuries 2Total work cover claims 2Total days lost through injury 170

WH&S INJURY STATISTICS

Staff Injury reports 8Student Injury reports 9Contractor & Visitor Injury reports 9Total Injury reports 26


15

Identified injuries, incidents and near misses are reported at the monthly meetings of the WH&S Committee and are subject to review, with appropriate corrective action taken. All incidents are investigated and solutions developed at the local level to prevent recurrence. All serious or potentially serious injuries or incidents are investigated immediately by the Manager Health Safety & Risk and the Health and Safety Representative of the area concerned. No serious incident occurred during 2013.

FREEDOM OF INFORMATIONThe Institute is subject to the provisions of the Freedom of Information Act 1982. The Act gives right of access to information held in documentary form by the Institute.

It is Institute policy to facilitate all reasonable requests from students, staff and the general public, subject to privacy and confidentiality provisions, without recourse to the provisions of the Act.

The authorised FOI Officer for the Institute is the Executive Manager, Corporate Services. Formal requests for access to documents or records under FOI are required to be directed in writing to:

The Chief Executive Officer, Attention FOI OfficerAdvance TAFE, PO Box 886, Bairnsdale Vic. 3875

No requests were received in 2013 for access to Institute documents under the Freedom of Information Act 1982.

PROTECTED DISCLOSURE ACT 2012 In 2013 Advance TAFE’s policy and procedures were updated from the Whistleblowers Protection Act 2001 to reflect the new legislation contained in the Protected Disclosure Act 2012.

The Protected Disclosure Policy establishes a system for the protection of persons who make a protected disclosure under the Protected Disclosure Act 2012 (Vic) from detrimental action by officers, members, employees and contractors of Advance TAFE, in accordance with section 58 (5) and ensures that all other requirements are met.

This policy is available online via the staff intranet or hard copies can be viewed in the libraries at the Bairnsdale and Fulham campus.

ENVIRONMENTAL PERFORMANCEIn 2013 Advance TAFE the invested in equipment and upgraded 2 campuses - The Flexible learning centre in Sale and the Bairnsdale Trade Centre to become new Technology Enabled Learning Centres (TELCs). This extended access to video conference facilities has led to a reduction in staff and student travel for meetings and classes, further enhancing our commitment to environmental practices. The TELCs have also increased the level of collaboration with our educational partners GippsTAFE and Chisholm.

Other environmental developments include the introduction of Microsoft Office 365 to better enable students to work from home whilst still having access to Office productivity tools and Microsoft Lync for video conference/online collaboration.

Advance TAFE initiated a review in 2013 into the way that wifi access is offered across its campuses with the pilot to commence in 2014 of a new network to better support student and staff personal devices.

Fleet management updates have been undertaken with the sourcing of environmentally friendly ‘green vehicles wherever possible.

INDUSTRIAL RELATIONS The PACCT (Professional, Administrative, Computing, Clerical and Technical) agreement was approved by Fair Work Australia on 1 May 2013 and commenced operation on 8 May 2013.

The Victorian TAFE Teaching Staff Multi-Business Agreement (MBA) 2009 will continue to apply to our business operations until a new agreement is approved by Fair Work Australia.

FEES AND CHARGESAdvance TAFE did not collect any compulsory non-academic fees, subscriptions and charges from students and prospective students during the 2013 financial year

CONSULTANTS AND OTHER PAYMENTSTotal number of Consultancies individually valued in excess of $10,000 = 4

Schedule listing consultants engaged Total project fees approved

Technology One 15,151.00

Ernst Young 15,810.00

Peter Quilligan Family Trust 46,718.50

Price Waterhouse Cooper 80,847

158,526

Total number of Consultancies individually valued at less than $10,000 = 18

Total Expenditure of these consultancy arrangements = $84,373

EX GRATIA PAYMENTSThere were no ex-gratia payments in 2013.

NATIONAL COMPETITION POLICYThe institute complies with Victorian Government competitive pricing policies.


16

RISK MANAGEMENTAdvance TAFE recognises its accountability and responsibility to all stakeholders and that good governance principles underpin its success. A risk management program consistent with AS/NZS ISO 31000:2009, Risk Management - Principles and Guidelines is in place to take advantage of opportunities and manage the risks facing the Institute.

Attestation on compliance with the Australian/New Zealand Risk Management Standard

I, Brenton Barker, certify that Advance TAFE has risk management processes in place consistent with the Australian/New Zealand Risk Management Standard (or equivalent designated standard) and an internal control system is in place that enables the executive to understand, manage and satisfactorily control risk exposures. The audit committee verifies this assurance and that the risk profile of Advance TAFE has been critically reviewed within the last 12 months.

Brenton BarkerChief Financial and Accounting OfficerAdvance TAFE28 April 2014

Compliance


17

Scott Rossetti Chair of the BoardDate: 28 April 2014Place: Bairnsdale

Brenton Barker Chief Finance officerDate: 28 April 2014Place: Bairnsdale

Shaun McDonagh Chief Executive OfficerDate: 28 April 2014Place: Bairnsdale

Declaration and Auditor’s report

ADVANCE TAFE

STATEMENT OF PERFORMANCE FOR YEAR ENDED 31 DECEMBER 2013

In our opinion, the accompanying Statement of Performance of Advance TAFE, in respect of the 2013 financial year, is presented fairly 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.

At the date of signing, we are not aware of any circumstance that would render any particulars in the Statement to be misleading or inaccurate.


18

Statement of Performance

Key Performance Indicators For year ended 31 December 2013

2013 TARGET 2013 ACTUAL COMMENT

STRATEGIC ALIGNMENT (STUDENT POPULATION SIZE)

Participation of 15-24 year olds

Target not pre - determined 1,783 A target is not specified for cohort in the performance agreement with

HESG. No target has been set.

Participation of 25-64 year olds

Target not pre - determined 1,767 A target is not specified for cohort in the performance agreement with

HESG. No target has been set.

TRAINING OUTCOMES

Module load completion rate >89% 87.95% There are no significant variances on these indicators.

Student satisfaction >90% 94.9% There are no significant variances on these indicators.

FINANCIAL MANAGEMENT

Total cost per SCH (excl. depreciation) $12.49 $13.74

The total cost per student contact hour has decreased by approximately 2.48% from 2012 ($14.09) due to a reduction in the total number of student contact hours delivered affecting economies of scale.

Working capital 2.00 0.72 Working capital is now unacceptably low and is being monitored.

Net operating margin (18.00)% (42.41)% Net operating margin is now unacceptably low and is being monitored.

Fee for service revenue 30% 26.17% Fee for service revenue as a percentage of total revenue (excluding capital) shows a 3.84% increase from 25.20% in 2012.

ORGANISATIONAL MANAGEMENT

Revenue per EFT staff $85,106 $85,545 There is no material variance against the target.

Government funded student contact hours (SCH) 1,043,460 943,707

SCH has dropped given change in demand following subsidisation rate changes, subsequent fee increases and significant senior staff change in 2013.

ENVIRONMENT

Energy consumption Target not pre - determined 13% Campus usage now under consideration to ensure efficient and optimal use

of our asset holdings.


19

Financial summary

SUMMARY OF OPERATING STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2009 2010 2011 2012 2013

$000 $000 $000 $000 $000

Revenue from continuing operations (including capital income) 29,157 28,616 30,531 26,032 17,783

Expenses including finance costs and other economic flows 19,240 26,279 27,324 26,906 26,841

Net result from continuing operations 9,917 2,337 3,207 (874) (9,058)

Net result for the period 9,917 2,337 3,207 (874) (9,058)

Net increase in asset revaluation reserve - - - - 0

Net income recognised directly in equity 311 59 20 (2,822) 0

Comprehensive result 10,228 2,396 3,227 (3,696) (9,058)

SUMMARY OF BALANCE SHEETS AS AT 31 DECEMBER2009 2010 2011 2012 2013

$000 $000 $000 $000 $000

Total assets 59,915 61,113 66,504 62,065 54,484

Total liabilities 5,328 4,130 6,294 5,551 3,294

Net assets 54,587 56,983 60,210 56,514 51,190

Total equity 54,587 56,983 60,210 56,514 51,190

SUMMARY OF CASH FLOWS STATEMENTS FOR THE YEAR ENDED 31 DECEMBER

2009 2010 2011 2012 2013

$000 $000 $000 $000 $000

Cash flows from operating activities

Total receipts 27,661 28,292 30,619 25,865 18,571

Total payments (23,374) (25,805) (24,954) (25,213) (24,693)

Net cash provided by operating activities 4,287 2,487 5,665 652 (6,122)

Net cash used in investing activities (2,721) (2,952) (6,470) (2,916) 6,087

Net cash used in financing activities (69) - - - -

Net increase (decrease) in cash and cash equivalents1,497 (465) (805) (2,264) (35)

Cash and cash equivalents at the beginning of the financial year 4,035 5,532 5,067 4,262 1,998

Cash and cash equivalents at the end of the financial year 5,532 5,067 4,262 1,998 1,963


20

Financial Report ContentsCERTIFICATIONS ....................................................................................................................................................21

AUDITOR’S REPORT ..............................................................................................................................................22

COMPREHENSIVE OPERATING STATEMENT .....................................................................................................23

BALANCE SHEET ............................................................................................................................................... 24

STATEMENT OF CHANGES IN EQUITY ............................................................................................................ 25

CASH FLOW STATEMENT ................................................................................................................................. 26

NOTES TO THE FINANCIAL STATEMENT ................................................................................................ 27 - 66

The financial statements were authorised by the members on 28 April 2014. Advance TAFE has the power to amend and reissue the financial statements.


21

Declaration

Declaration

Scott Rossetti, Chair of the Board Shaun McDonagh, Chief Executive Officer

Date Date

Place: Bairnsdale Place: Bairnsdale

Brenton Barker, Chief Finance & Accounting Officer

Date

Place: Bairnsdale

The Chair 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 Advance TAFE.

FINANCIAL REPORT FOR YEAR ENDED 31 DECEMBER, 2013

DECLARATION BY CHAIR OF THE BOARD

CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCE AND ACCOUNTING OFFICER

We certify that the attached financial statements for the Advance 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 statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement and notes to and forming part of the financial report, presents fairly the financial transactions during the year ended 31 December 2013 and financial position of the Institute as at 31 December 2013.

At the date of signing this financial report, we are not aware of any circumstance that would render any particulars included in the financial report 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.

Skills Victoria

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25/03/2014 10:06 PM

: 28 April 2014

: 28 April 2014

: 28 April 2014


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Auditor’s report


23

Financial Report

COMPREHENSIVE OPERATING STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2013

2013 2012

Note $’000 $’000

Continuing operations

Income from transactions

Government contributions - operating 2(a)(i) 9,118 14,000

Government contributions - capital 2(a)(ii) 600 3,538

Sale of goods and services 2(b) 7,741 7,702

Interest 2(c) 133 269

Other income 2(e) 191 523

Total income from transactions 17,783 26,032

Expenses from transactions

Employee expenses 3(a) 16,654 18,183

Depreciation and amortisation 3(b) 2,217 2,384

Grants and other transfers 3(c) 18 23

Supplies and services 3(d) 3,727 3,501

Other operating expenses 3(e) 2,173 2,788

Goodwill and capitalised costs written off 3(f) 2,114 -

Total expenses from transactions 26,902 26,879

Net result from transactions (net operating balance) (9,119) (847)

Other economic flows included in net result

Net gain/(loss) on non-financial assets 4(a) 78 (2)

Other gains/(losses) from other economic flows 4(b) (17) (25)

Total other economic flows included in net result 61 (27)

Net result from continuing operations (9,058) (874)

Net result (9,058) (874)

Other economic flows - other comprehensive income

Changes in physical asset revaluation surplus 15 - (2,820)

Valuation (decrement) taken to equity 15 - (2)

Total other economic flows – Other comprehensive income - (2,822)

Comprehensive result (9,058) (3,696)

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

Advance TAFE Financial Statements


24

Financial Report

BALANCE SHEETAS AT 31 DECEMBER 2013

2013 2012

Note $’000 $’000

Assets

Financial assets

Cash and deposits 5 1,963 1,998

Receivables 6 896 1,965

Investments, loans and other financial assets 7 - 6,438

Total financial assets 2,859 10,401

Non-financial assets

Inventories 8 148 164

Property, plant and equipment 9 47,107 50,916

Biological assets 10 13 19

Intangible assets 11 4,214 565

Other non-financial assets 12 143 -

Total non-financial assets 51,625 51,664

Total assets 54,484 62,065

Liabilities

Payables 13 1,197 3,309

Provisions 14 2,097 2,242

Total liabilities 3,294 5,551

Net assets 51,190 56,514

Equity

Accumulated surplus 15(b) 22,816 31,874

Physical asset revaluation surplus 15(c) 9,082 9,082

Contributed capital 15(a) 19,292 15,556

Net worth 51,190 56,512

Commitments for expenditure 17 1,518 1,294

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



25

Financial Report

Changes due to

Equity at

1 Jan 2013

Total Comprehensive

result

Transactions with owners in their

capacity as owners

Equity at

31 Dec 2013

Note $’000 $’000 $’000 $’000

Accumulated surplus 15(b) 31,874 (9,058) 22,816

Accumulated surplus at the end of the year 31,874 (9,058) - 22,816

Contributed capital 15(a) 15,556 3,736 - 19,292

Withdrawal of equity - - -

Contribution by owners at the end of the year 15,556 3,736 - 19,292

Physical assets revaluation reserve 15(c) 8,694 - 8,694

Financial assets available-for-sale reserve 15(c) 388 - 388

9,082 - - 9,082

Total equity at the end of the year 56,512 (5,322) - 51,190

Changes due to

Equity at

1 Jan 2012

Total Comprehensive

result

Transactions with owners in their

capacity as owners

Equity at

31 Dec 2012

Note $’000 $’000 $’000 $’000

Accumulated surplus 15(b) 33,568 (874) - 32,694

Adjustment due to prior year error (820) - - (820)

Accumulated surplus at the end of the year 32,748 (874) - 31,874

Contributed capital 15(a) 15,556 - - 15,556

Withdrawal of equity - - - -

Contribution by owners at the end of the year 15,556 - - 15,556

Physical assets revaluation reserve 15(c) 11,514 (2,820) - 8,694

Financial assets available-for-sale reserve 15(c) 390 (2) - 388

Adjustments due to change in accounting policy 15(c) - - - -

11,904 (2,822) - 9,082

Total equity at the end of the year 60,208 (3,696) - 56,512

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

Advance TAFE Financial StatementsSTATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2013


26

Financial Report

2013 2012

Note $’000 $’000

Cash flows from operating activities

Receipts

Government contributions - operating 2(a)(i) 9,228 14,000

Government contributions - capital 490 1,921

User fees and charges received 7,741 7,702

Goods and services tax recovered from the ATO 792 1,260

Interest received 133 269

Other receipts 187 713

Total receipts 18,571 25,865

Payments

Payments to suppliers and employees (23,162) (24,084)

Goods and services tax paid to the ATO (1,043) (1,129)

Other payments (488) -

Total payments (24,693) (25,213)

Net cash flows from/(used in) operating activities 16 (a) (6,122) 652

Cash flows from investing activities

Payments for investments - (1,000)

Proceeds from sale of investments 6,438 -

Payments for non-financial assets (494) (1,995)

Proceeds from sale of biological assets 6 11

Proceeds from sale of non-financial assets 137 68

Net cash provided by/(used in) investing activities 6,087 (2,916)

Net increase/(decrease) in cash and cash equivalents (35) (2,264)

Cash and cash equivalents at the beginning of the financial year 1,998 4,262

Effects of exchange rate changes on cash and cash equivalents held in foreign currencies - -

Cash and cash equivalents at the end of the financial year 5 1,963 1,998

Financing arrangements - -

Non-cash financing and investing activities 16(a) - 1,617

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

Advance TAFE Financial StatementsCASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2013


27

Financial Report

CONTENTS OF THE NOTES TO THE FINANCIAL STATEMENTS

NOTE NO. ACCOMPANYING NOTE

1 ......................................................................................................Statement of significant accounting policies

2 .................................................................................................................................. Income from transactions

3 ............................................................................................................................... Expenses from transactions

4 ..................................................................................................... Other economic flows included in net result

5 ................................................................................................................................. Cash and cash equivalents

6 .........................................................................................................................................................Receivables

7 ................................................................................................... Investments, loans and other financial assets

8 ......................................................................................................................................................... Inventories

9 .......................................................................................................................... Property, plant and equipment

10 ............................................................................................................................................... Biological assets

11 ............................................................................................................................................... Intangible assets

12 ............................................................................................................................... Other non-financial assets

13 ........................................................................................................................................................... Payables

14 ......................................................................................................................................................... Provisions

15 ............................................................................................................................................................... Equity

16 ...................................................................................................................................... Cash flow information

17 ...................................................................................................................................................Commitments

18 ....................................................................................................................................................Leased assets

19 ................................................................................................................................................... Contingencies

20 ..................................................................................................................................... Economic dependency

21 ........................................................................................................................................... Subsequent events

22 ................................................................................................................................ Remuneration of auditors

23 .................................................................................................................................... Superannuation (Part I)

24 .............................................................................................. Key management personnel disclosures (Part I)

25 ................................................................................................................................................. Related parties

26 ................................................................................................................................................ Institute details

27 ........................................................................................................................... Financial instruments (Part I)

27 .......................................................................................................................... Financial instruments (Part II)

27 ......................................................................................................................... Financial instruments (Part III)

27 ......................................................................................................................... Financial instruments (Part IV)



NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013

28

Notes to the Financial Statements - Advance TAFEfor the year ended 31 December 2013

NOTE 1

Statement of significant accounting policies

1.01 Statement of compliance

1.02

Going concern

Other matters

1.03 Reporting entity

Its principal address is:Advance TAFE48 Main Street, Bairnsdale, Vic 3875.

1.04 Basis of consolidation

1.05 Events after reporting date

The annual financial statements represent the audited general purpose financial statements and notes of Advance TAFE as an independent entity.

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.

For the purposes of preparing financial statements, the Institute is classed as a not for profit entity. Where appropriate, those AAS paragraphs applicable to not-for-profit entities have been applied.

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.

Basis of accounting preparation and measurement

After consideration of conditions, which may cast doubt on the TAFES ability to continue as a going concern, the going concern basis has been used to prepare the financial statements. During the 2013 year, Advance TAFE incurred a loss from continuing operations of $9.2m and this contributed to a $6.1m net cash outflow from operations during 2013. This outflow was funded by investments. The primary driver behind the $6.1m year-on-year decline in cash flows from operations was a $4.8m decline in Government contributions for the Institute’s operations as outlined in the Comprehensive operation Statement. Prior year revenue had also included capital receipts totalling $3.5m.

During the latter part of 2013, the Institute reviewed its operations and there were significant staff changes at an Executive level. It investigated opportunities to transition the business. Some of these initiatives were implemented in 2013 with full year impacts to be realised in 2014. 2013 initiatives commenced include;• A course by course budget review;• Budgeted FTE for 2014 were down 20 from 2013 - expected to save an annualised $1.5m;• In late 2013 a comprehensive review of several potential partnership options was undertaken seeking to create a sustainable future for Gippsland’s education and training options. The Board resolved to pursue a formal partnership with Advance TAFE, GippsTAFE and Federation University Australia;• In 2013 all student fees for 2014 were reviewed to offset the impact of known reductions in government funding. Overall, most student fees have been increased in 2014 dependent upon market forces and is expected to contribute additional revenue.

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 risk 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

Subsequent to balance date Advance TAFE have signed a memorandum of understanding whereby Advance TAFE will be amalgamated with Gipps TAFE to form a combined operation commencing on the 1st May 2014. The new entity will trade under the name Federation Training with a view to then being amalgamated into the operation of Federation University of Australia pending acceptable financial and operating performance over a twenty month period. In doing so the amalgamated operations receive support funding of $40.2m over time through the state government's structural adjustment fund as announced by the Minister on the 16th April 2014 to support the amalgamation activities.

Exceptions to the historical cost convention include:

• 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 replacement value;• available-for-sale investments which are measured at fair value with movements reflected in equity until the asset is derecognised.The accounting policies set out below have been applied in preparing the financial statements for the year ended 31 December 2013 and the comparative information presented for the year ended 31 December 2012.

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.

The financial statements cover the Advance TAFE as an individual reporting entity. The Institute is a statutory body corporate, established pursuant to an act/order made by the Victorian Government under the Education and Training Reform Act 2006.

The financial statements include all the activities of the Institute. The Institute has no controlled entities.

Page 9 of 53


NOTE 1


Revaluations of non-current physical assets

Non-current physical assets constructed by the Institute

Biological assets

Bloodstock

Bloodstock is measured at fair value less estimated point of sale costs.IntangiblesInternally-generated intangible assets

(b) the intention to complete the intangible asset and use or sell it;(c) the ability to use or sell the asset;(d) how the intangible asset will generate probable future economic benefits;

2013 2012Capitalised software development cost (years) 10 3-5

1.13 Liabilities Payables

Provisions

Employee benefits

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. Revaluation reserves are not normally transferred to accumulated funds on de-recognition of the relevant asset.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.

The cost of non-current 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.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated:(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;

(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

(f) the ability to measure reliably the expenditure attributable to the intangible asset during its development.Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred.

Intangible assets are measured at cost less accumulated amortisation and impairment, and are amortised on a straight-line basis over their useful lives as follows:

GoodwillGoodwill and goodwill on acquisition is initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair valued attributed to its net assets at date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

LicenceLicence cost associated with the Optical Fibre Wide Area Network (WAN) are initially recorded at cost and amortised on a straight line basis over the period of the relevant contract which is 20 years. Licence intangibles are subsequently carried at cost less accumulated amortisation and impairment losses.

Payables consist of: • 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 make future payments in respect of the purchase of those goods and services; and• statutory payables, such as goods and services tax and fringe benefits tax payables.

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.

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, taking into account the risks 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.

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29


NOTE 1


1.01 Statement of compliance

1.02

Going concern

Other matters

1.03 Reporting entity

Its principal address is:Advance TAFE48 Main Street, Bairnsdale, Vic 3875.

1.04 Basis of consolidation

1.05 Events after reporting date

The annual financial statements represent the audited general purpose financial statements and notes of Advance TAFE as an independent entity.

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.

For the purposes of preparing financial statements, the Institute is classed as a not for profit entity. Where appropriate, those AAS paragraphs applicable to not-for-profit entities have been applied.

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.

Basis of accounting preparation and measurement

After consideration of conditions, which may cast doubt on the TAFES ability to continue as a going concern, the going concern basis has been used to prepare the financial statements. During the 2013 year, Advance TAFE incurred a loss from continuing operations of $9.2m and this contributed to a $6.1m net cash outflow from operations during 2013. This outflow was funded by investments. The primary driver behind the $6.1m year-on-year decline in cash flows from operations was a $4.8m decline in Government contributions for the Institute’s operations as outlined in the Comprehensive operation Statement. Prior year revenue had also included capital receipts totalling $3.5m.

During the latter part of 2013, the Institute reviewed its operations and there were significant staff changes at an Executive level. It investigated opportunities to transition the business. Some of these initiatives were implemented in 2013 with full year impacts to be realised in 2014. 2013 initiatives commenced include;• A course by course budget review;• Budgeted FTE for 2014 were down 20 from 2013 - expected to save an annualised $1.5m;• In late 2013 a comprehensive review of several potential partnership options was undertaken seeking to create a sustainable future for Gippsland’s education and training options. The Board resolved to pursue a formal partnership with Advance TAFE, GippsTAFE and Federation University Australia;• In 2013 all student fees for 2014 were reviewed to offset the impact of known reductions in government funding. Overall, most student fees have been increased in 2014 dependent upon market forces and is expected to contribute additional revenue.

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 risk 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

Subsequent to balance date Advance TAFE have signed a memorandum of understanding whereby Advance TAFE will be amalgamated with Gipps TAFE to form a combined operation commencing on the 1st May 2014. The new entity will trade under the name Federation Training with a view to then being amalgamated into the operation of Federation University of Australia pending acceptable financial and operating performance over a twenty month period. In doing so the amalgamated operations receive support funding of $40.2m over time through the state government's structural adjustment fund as announced by the Minister on the 16th April 2014 to support the amalgamation activities.

Exceptions to the historical cost convention include:

• 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 replacement value;• available-for-sale investments which are measured at fair value with movements reflected in equity until the asset is derecognised.The accounting policies set out below have been applied in preparing the financial statements for the year ended 31 December 2013 and the comparative information presented for the year ended 31 December 2012.

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.

The financial statements cover the Advance TAFE as an individual reporting entity. The Institute is a statutory body corporate, established pursuant to an act/order made by the Victorian Government under the Education and Training Reform Act 2006.

The financial statements include all the activities of the Institute. The Institute has no controlled entities.

Page 9 of 53


NOTE 1


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 risks and rewards of ownership of the goods have transferred to the buyer;

Interest

Other incomeRental income

Fair value of assets and services received free of charge or for nominal consideration

1.08 Expenses from transactionsEmployee benefits

(i) Defined contribution plan

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

(ii) Defined benefit plans

Depreciation and amortisationDepreciation

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 conditions which arose after the reporting date and which may have a material impact on the results of subsequent years.

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

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.

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.

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.

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

(b) the Institute retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (c) the amount of revenue can be reliably measured;(d) it is probable that the economic benefits associated with the transaction will flow to the Institute and;(e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Interest from cash, short-term deposits and investments is brought to account on a time proportional basis taking into account interest rates applicable to the financial assets.Net realised and unrealised gains and losses on the revaluation of investments do not form part of income from transactions, but are reported as part of income from other economic flows in the net result or as unrealised gains and losses taken direct to equity, forming part of the total change in net worth in the comprehensive result.

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.

Contributions of resources received free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether restrictions or conditions are imposed over the use of the contributions. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not donated.

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

Retirement benefit obligations

The amount charged to the statement of comprehensive income 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.

Page 10 of 53


NOTE 1




Biological assets

Bloodstock





Provisions

Employee benefits















Page 14 of 53



30


NOTE 1


Class of assetBuildingsPlant & equipmentMotor vehiclesLibrary collectionsOther

There has been no change in the methodology and rates for 2013.

Amortisation

(a) annually;(b) whenever there is an indication that the intangible asset may be impaired.

Interest Expense

Grants and other transfers

Other operating expensesSupplies and services

Fair value of assets and services provided free of charge or for nominal consideration

1.09 Other economic flows included in net result

Net gain/(loss) on non-financial assets

Disposal of non-financial assets

Biological assets are measured at fair value, and the resultant gain/(loss) is reported as an other economic flow.

Impairment of assets

- Inventories;- Financial assets;- Certain biological assets related to agricultural activity;

Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land. Depreciation is generally 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. 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 method are reviewed at the end of each annual reporting period.

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

Method Rate/RatesStraight 2.5%Straight 10-33.3%Straight 15.0%Straight 15-25%Straight 10.0%

The assets' residual values and useful lives are reviewed and adjusted if appropriate on an annual basis.

Intangible assets with finite lives are amortised on a straight line basis over the assets useful lives. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each annual reporting period. In addition, an assessment is made at each reporting date to determine whether there are indicators that the intangible asset concerned is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount.

Intangible assets with indefinite lives are not amortised. The useful life of intangible assets that are not being amortised are reviewed each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. In addition, the Institute tests all intangible assets with indefinite lives for impairment by comparing its recoverable amount with its carrying amount:

Any excess of the carrying amount over the recoverable amount is recognised as an impairment loss.

Interest expense is recognised as expenses in the period in which they are incurred.Interest expense includes interest on bank overdrafts and short term and long term borrowings, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary costs incurred in connection with the arrangement of borrowings and finance lease charges.

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

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.

Resources provided free of charge or for nominal consideration are recognised at their fair value.

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.

Gain/(loss) arising from fair value changes of biological assets

Goodwill and 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).

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

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset's carrying value exceeds its recoverable amount, the difference is written off by a charge to the statement of comprehensive income, except to the extent that the write down can be debited to an asset revaluation reserve amount applicable to that class of asset.

Page 11 of 53


NOTE 1


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 risks and rewards of ownership of the goods have transferred to the buyer;

Interest

Other incomeRental income

Fair value of assets and services received free of charge or for nominal consideration

1.08 Expenses from transactionsEmployee benefits

(i) Defined contribution plan

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

(ii) Defined benefit plans

Depreciation and amortisationDepreciation

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 conditions which arose after the reporting date and which may have a material impact on the results of subsequent years.

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

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.

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.

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.

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

(b) the Institute retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (c) the amount of revenue can be reliably measured;(d) it is probable that the economic benefits associated with the transaction will flow to the Institute and;(e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Interest from cash, short-term deposits and investments is brought to account on a time proportional basis taking into account interest rates applicable to the financial assets.Net realised and unrealised gains and losses on the revaluation of investments do not form part of income from transactions, but are reported as part of income from other economic flows in the net result or as unrealised gains and losses taken direct to equity, forming part of the total change in net worth in the comprehensive result.

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.

Contributions of resources received free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether restrictions or conditions are imposed over the use of the contributions. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not donated.

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

Retirement benefit obligations

The amount charged to the statement of comprehensive income 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.

Page 10 of 53


NOTE 1




Biological assets

Bloodstock





Provisions

Employee benefits















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31


NOTE 1


Net gain/(loss) on financial instruments

Revaluations of financial instruments at fair value

Impairment of financial assets

Other gains/(losses) from other economic flows

1.10 Financial assetsCash and deposits

Receivables


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.

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. 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.

Net gain/(loss) on financial instruments includes realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading, impairment and reversal of impairment for financial instruments at amortised cost, and disposals of financial assets.

The revaluation gain/(loss) on financial instruments at fair value excludes dividends or interest earned on financial assets, which is reported as part of income from transactions.

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 5% percent or more than its cost price; or where it's fair value has been less than its cost price for a period of three 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 written off by mutual consent are classified as a transaction expense. The allowance for doubtful receivables and bad debts not written off by mutual consent are adjusted as ‘other economic flows’.

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

Receivables consist of:• statutory receivables, which include predominantly amounts owing from the Victorian Government and GST input tax credits recoverable; and• contractual receivables, which include debtors in relation to goods and services, loans to third parties, accrued investment income, and finance lease receivables 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.

Investments and other financial assetsInvestments are classified in the following categories:

• financial assets at fair value through profit or loss,• loans and receivables, and• available for sale financial assets.

The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition.

Any dividend or interest earned on the financial asset is recognised in the consolidated comprehensive operating statement as a transaction.Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

• the rights to receive cash flows from the asset have expired; or• the Institute retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass through’ arrangement; or• the Institute has transferred its rights to receive cash flows from the asset and either:

(a) has transferred substantially all the risks and rewards of the asset, or(b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Institute has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to the extent of the Institute’s continuing involvement in the asset.

At the end of each reporting period, the Institute assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings. All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

Page 12 of 53


NOTE 1


Class of assetBuildingsPlant & equipmentMotor vehiclesLibrary collectionsOther

There has been no change in the methodology and rates for 2013.

Amortisation

(a) annually;(b) whenever there is an indication that the intangible asset may be impaired.

Interest Expense

Grants and other transfers

Other operating expensesSupplies and services

Fair value of assets and services provided free of charge or for nominal consideration

1.09 Other economic flows included in net result

Net gain/(loss) on non-financial assets

Disposal of non-financial assets

Biological assets are measured at fair value, and the resultant gain/(loss) is reported as an other economic flow.

Impairment of assets

- Inventories;- Financial assets;- Certain biological assets related to agricultural activity;

Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land. Depreciation is generally 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. 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 method are reviewed at the end of each annual reporting period.

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

Method Rate/RatesStraight 2.5%Straight 10-33.3%Straight 15.0%Straight 15-25%Straight 10.0%

The assets' residual values and useful lives are reviewed and adjusted if appropriate on an annual basis.

Intangible assets with finite lives are amortised on a straight line basis over the assets useful lives. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each annual reporting period. In addition, an assessment is made at each reporting date to determine whether there are indicators that the intangible asset concerned is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount.

Intangible assets with indefinite lives are not amortised. The useful life of intangible assets that are not being amortised are reviewed each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. In addition, the Institute tests all intangible assets with indefinite lives for impairment by comparing its recoverable amount with its carrying amount:

Any excess of the carrying amount over the recoverable amount is recognised as an impairment loss.

Interest expense is recognised as expenses in the period in which they are incurred.Interest expense includes interest on bank overdrafts and short term and long term borrowings, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary costs incurred in connection with the arrangement of borrowings and finance lease charges.

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

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.

Resources provided free of charge or for nominal consideration are recognised at their fair value.

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.

Gain/(loss) arising from fair value changes of biological assets

Goodwill and 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).

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

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset's carrying value exceeds its recoverable amount, the difference is written off by a charge to the statement of comprehensive income, except to the extent that the write down can be debited to an asset revaluation reserve amount applicable to that class of asset.

Page 11 of 53


NOTE 1




Biological assets

Bloodstock





Provisions

Employee benefits















Page 14 of 53



32


NOTE 1


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

Library collections

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

Bad and doubtful debts for financial assets are assessed on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. Bad debts not written off by mutual consent and the allowance for doubtful receivables are classified as ‘other economic flows’ in the net result.

The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets.

A lease is a right to use an asset for an agreed period of time in exchange for payment.Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to ownership. Leases of property, plant and equipment are classified as finance infrastructure leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership from the lessor to the lessee. All other leases are classified as operating leases

Operating leases

Institute as lessor

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments.Institute as lessee

Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset. The leased asset is not recognised in the balance sheet.All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments.In the event that lease incentives are received to enter into operating leases, the aggregate cost of incentives are recognised as a reduction of rental expense over the lease term on a straight-line basis, unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Inventories include goods and other property held either for sale or for distribution at a zero or nominal cost in the ordinary course of business operations. It includes land held-for-sale and excludes depreciable assets.

Inventories held-for-distribution are measured at cost, adjusted for any loss of service potential. All other inventories, including land held for sale, are measured at the lower of cost and net realisable value.The basis used in assessing loss of service potential for inventories held-for-distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the way it did when it was first acquired.

Cost is assigned to land for sale (undeveloped, under development and developed) and to other high value, low volume inventory items on a specific identification of cost basis.

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

All non-financial physical assets, are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment.

The initial cost for non-financial physical assets under a finance lease is measured at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease.

Where an asset is received for no or nominal consideration, the cost is the asset’s fair value at the date of acquisition.

Non-financial physical assets such as national parks, other Crown land and heritage assets are measured at fair value with regard to the property’s highest and The fair value of infrastructure systems and plant, equipment and vehicles, is normally determined by reference to the asset’s depreciated replacement cost, or The cost of constructed non-financial physical assets includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportion of variable and fixed overheads.

Where an asset is received for no or nominal consideration, the cost is the asset’s fair value at the date of acquisition.For the accounting policy on impairment of non-financial physical assets refer to Note on Impairment of non-financial assets.

The Institute values the cost of the library collection based on the following methodology - Library collections are valued at cost less accumulated depreciation

Leasehold improvementsThe cost of a leasehold improvements is capitalised as an asset and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter.

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 financial physical assets constructed by the InstituteThe 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.

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Net gain/(loss) on financial instruments

Revaluations of financial instruments at fair value


Other gains/(losses) from other economic flows

1.10 Financial assetsCash and deposits

Receivables


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.

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. 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.

Net gain/(loss) on financial instruments includes realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading, impairment and reversal of impairment for financial instruments at amortised cost, and disposals of financial assets.

The revaluation gain/(loss) on financial instruments at fair value excludes dividends or interest earned on financial assets, which is reported as part of income from transactions.

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 5% percent or more than its cost price; or where it's fair value has been less than its cost price for a period of three 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 written off by mutual consent are classified as a transaction expense. The allowance for doubtful receivables and bad debts not written off by mutual consent are adjusted as ‘other economic flows’.

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

Receivables consist of:• statutory receivables, which include predominantly amounts owing from the Victorian Government and GST input tax credits recoverable; and• contractual receivables, which include debtors in relation to goods and services, loans to third parties, accrued investment income, and finance lease receivables 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.

Investments and other financial assetsInvestments are classified in the following categories:

• financial assets at fair value through profit or loss,• loans and receivables, and• available for sale financial assets.

The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition.

Any dividend or interest earned on the financial asset is recognised in the consolidated comprehensive operating statement as a transaction.Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

• the rights to receive cash flows from the asset have expired; or• the Institute retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass through’ arrangement; or• the Institute has transferred its rights to receive cash flows from the asset and either:

(a) has transferred substantially all the risks and rewards of the asset, or(b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Institute has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to the extent of the Institute’s continuing involvement in the asset.

At the end of each reporting period, the Institute assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings. All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

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1.11 Leases

1.12 Non-Financial AssetsInventories

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


Library collections

The cost of a leasehold improvements is capitalised as an asset and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter.

Where an asset is received for no or nominal consideration, the cost is the asset’s fair value at the date of acquisition.For the accounting policy on impairment of non-financial physical assets refer to Note on Impairment of non-financial assets.

The Institute values the cost of the library collection based on the following methodology - Library collections are valued at cost less accumulated depreciation

Leasehold improvements

The fair value of infrastructure systems and plant, equipment and vehicles, is normally determined by reference to the asset’s depreciated replacement cost, or where the infrastructure is held by a for profit entity, the fair value may be derived from estimates of the present value of future cash flows. For plant, equipment and vehicles, existing depreciated historical cost is generally a reasonable proxy for depreciated replacement cost because of the short lives of the assets concerned.

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

All non-financial physical assets, are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment.

The initial cost for non-financial physical assets under a finance lease is measured at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease.

Where an asset is received for no or nominal consideration, the cost is the asset’s fair value at the date of acquisition.

Non-financial physical assets such as national parks, other Crown land and heritage assets are measured at fair value with regard to the property’s highest and best use after due consideration is made for any legal or constructive restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset. Theoretical opportunities that may be available in relation to the asset are not taken into account until it is virtually certain that the restrictions will no longer apply.

Inventories held-for-distribution are measured at cost, adjusted for any loss of service potential. All other inventories, including land held for sale, are measured at the lower of cost and net realisable value.The basis used in assessing loss of service potential for inventories held-for-distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the way it did when it was first acquired.

Cost is assigned to land for sale (undeveloped, under development and developed) and to other high value, low volume inventory items on a specific identification of cost basis.

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

Institute as lessee

Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset. The leased asset is not recognised in the balance sheet.All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments.In the event that lease incentives are received to enter into operating leases, the aggregate cost of incentives are recognised as a reduction of rental expense over the lease term on a straight-line basis, unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Inventories include goods and other property held either for sale or for distribution at a zero or nominal cost in the ordinary course of business operations. It includes land held-for-sale and excludes depreciable assets.

Operating leases

Institute as lessor

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments.

Bad and doubtful debts for financial assets are assessed on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. Bad debts not written off by mutual consent and the allowance for doubtful receivables are classified as ‘other economic flows’ in the net result.

The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets.

A lease is a right to use an asset for an agreed period of time in exchange for payment.Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to ownership. Leases of property, plant and equipment are classified as finance infrastructure leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership from the lessor to the lessee. All other leases are classified as operating leases

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NOTE 1


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



Biological assets

Bloodstock





Provisions


Goodwill and goodwill on acquisition is initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair valued attributed to its net assets at date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.



(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;




Goodwill

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated:

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.



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 financial physical assets constructed by the InstituteThe 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.


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.

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Biological assets

Bloodstock





Provisions

Employee benefits















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Biological assets

Bloodstock





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Employee benefits















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(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

Financial liabilities

1.14 Commitments

1.15 Contingent assets and contingent liabilities

1.16 EquityContributed capital

1.17

(i) Wages and salaries, and annual leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulated sick leave expected to be wholly 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 wholly 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.

Liability for long service leave (LSL) is recognised in the provision for employee benefits.Current Liability - unconditional LSL representing 7 years 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 take leave within 12 months.

Non-current liability - conditional LSL representing less than 7 years 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.

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, workers compensation, superannuation, annual leave and long service leave accrued while on LSL taken in service) are recognised separately from provision for employee benefits.

Performance payments for TAFE Executive Officers are based on a percentage of the annual salary package 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.

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

Derecognition of financial liabilitiesA 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.

Onerous ContractsAn onerous contract is considered to exist where the Institute has a contract under which the unavoidable cost of meeting the contractual obligations exceed the economic benefits estimated to be received. Present obligations arising under onerous contracts are recognised as a provision to the extent that the present obligation exceeds the economic benefits estimated to be received

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.

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note (refer note 19) and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of the GST receivable or payable respectively.

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

Materiality

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 taken on the basis of the financial report; and (b) affect the discharge of accountability by the management or governing body of the entity.

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(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

1.17

(i) Wages and salaries, and annual leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulated sick leave expected to be wholly 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 wholly 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.

Liability for long service leave (LSL) is recognised in the provision for employee benefits.Current Liability - unconditional LSL representing 7 years 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 take leave within 12 months.

Non-current liability - conditional LSL representing less than 7 years 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.

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, workers compensation, superannuation, annual leave and long service leave accrued while on LSL taken in service) are recognised separately from provision for employee benefits.

Performance payments for TAFE Executive Officers are based on a percentage of the annual salary package 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.

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

Derecognition of financial liabilitiesA 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.

Onerous ContractsAn onerous contract is considered to exist where the Institute has a contract under which the unavoidable cost of meeting the contractual obligations exceed the economic benefits estimated to be received. Present obligations arising under onerous contracts are recognised as a provision to the extent that the present obligation exceeds the economic benefits estimated to be received

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.

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note (refer note 19) and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of the GST receivable or payable respectively.

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

Materiality

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 taken on the basis of the financial report; and (b) affect the discharge of accountability by the management or governing body of the entity.

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1.18 Rounding of amounts

1.19 Comparative information

1.20 Change in accounting policy

AASB 119 Employee benefits

1.21 New and revised AASBs in issue but not yet effective

Application date of standard1 Jan 2015

1 Jan 2014

1 Jan 2014

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

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

AASB 13 Fair Value Measurement

The Institute has applied AASB 13 Fair Value Measurement for the first time in the current year. AASB 13 establishes a single source of guidance for fair value measurements. The scope of AASB 13 is broad; the fair value measurement requirements of AASB 13 apply to both financial instrument items and non-financial instrument items for which other A-IFRS require or permit fair value measurements and disclosures about fair value measurements, except for share-based payment transactions that are within the scope of AASB 2 Share-based Payment, leasing transactions that are within the scope of AASB 17 Leases, and measurements that have some similarities to fair value but not fair value (e.g. net realisable value for the purposes of measuring inventories or value in use for impairment assessment purposes).

AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under AASB 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique. Also, AASB 13 includes extensive disclosure requirements.

AASB 13 requires prospective application from 1 January 2013. In addition, specific transitional provisions were given to entities such that they need not apply the disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, the Institute has not made any new disclosures required by AASB 13 for the 2012 comparative period (please see note 9 and 27 disclosures). Other than the additional disclosures, the application of AASB 13 has not had any material impact on the amounts recognised in the financial statements.

In the current year, the Institute has applied AASB 119 Employee Benefits (as revised in 2011) and the related consequential amendments for the first time.

In addition, AASB 119 also changes the definition of short-term employee benefits. This change has no impact on the Institute because the Institute has always defined short-term employee benefits as benefits expected to be settled wholly before twelve months after the end of the reporting period in which the employees render the related service; and measured the provision for annual leave on a discounted basis.

Certain new accounting standards and interpretations have been published that are not mandatory for the 31 December 2013 reporting period.

As at 31 December 2013 the following standards and interpretations (applicable to the Institute) had been issued but were not mandatory for financial year ending 31 December 2013. The Institute has not, and does not intend to, adopt these standards early.

Standard/Interpretation Summary Impact on entity financial statements

AASB 9 Financial Instruments This standard simplifies requirements for the classification and measurement of financial assets resulting from Phase 1 of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement).

Subject to AASB’s further modifications to AASB 9, together with the anticipated changes resulting from the staged projects on impairments and hedge accounting, details of impacts will be assessed.

AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian Accounts Standard arising from Reduced Disclosure Requirements

These standards set out the tiers of financial reporting and the reduced disclosure framework.

The Victorian Government is currentlyconsidering the impacts of ReducedDisclosure Requirements (RDRs) for certainpublic sector entities, and has not decidedif RDRs will be implemented in the Victorianpublic sector.

AASB 1055 BudgetaryReporting

AASB 1055 extends the scope of budgetaryreporting that is currently applicable for thewhole of government and general governmentsector (GGS) to NFP entities within the GGS,provided that these entities present separatebudget to the parliament.

This Standard is not applicable as nobudget disclosure is required.

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Biological assets

Bloodstock





Provisions

Employee benefits















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1.18 Rounding of amounts

1.19 Comparative information

1.20 Change in accounting policy

AASB 119 Employee benefits

1.21 New and revised AASBs in issue but not yet effective

Application date of standard1 Jan 2015

1 Jan 2014

1 Jan 2014

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

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

AASB 13 Fair Value Measurement

The Institute has applied AASB 13 Fair Value Measurement for the first time in the current year. AASB 13 establishes a single source of guidance for fair value measurements. The scope of AASB 13 is broad; the fair value measurement requirements of AASB 13 apply to both financial instrument items and non-financial instrument items for which other A-IFRS require or permit fair value measurements and disclosures about fair value measurements, except for share-based payment transactions that are within the scope of AASB 2 Share-based Payment, leasing transactions that are within the scope of AASB 17 Leases, and measurements that have some similarities to fair value but not fair value (e.g. net realisable value for the purposes of measuring inventories or value in use for impairment assessment purposes).

AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under AASB 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique. Also, AASB 13 includes extensive disclosure requirements.

AASB 13 requires prospective application from 1 January 2013. In addition, specific transitional provisions were given to entities such that they need not apply the disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, the Institute has not made any new disclosures required by AASB 13 for the 2012 comparative period (please see note 9 and 27 disclosures). Other than the additional disclosures, the application of AASB 13 has not had any material impact on the amounts recognised in the financial statements.

In the current year, the Institute has applied AASB 119 Employee Benefits (as revised in 2011) and the related consequential amendments for the first time.

In addition, AASB 119 also changes the definition of short-term employee benefits. This change has no impact on the Institute because the Institute has always defined short-term employee benefits as benefits expected to be settled wholly before twelve months after the end of the reporting period in which the employees render the related service; and measured the provision for annual leave on a discounted basis.

Certain new accounting standards and interpretations have been published that are not mandatory for the 31 December 2013 reporting period.

As at 31 December 2013 the following standards and interpretations (applicable to the Institute) had been issued but were not mandatory for financial year ending 31 December 2013. The Institute has not, and does not intend to, adopt these standards early.

Standard/Interpretation Summary Impact on entity financial statements

AASB 9 Financial Instruments This standard simplifies requirements for the classification and measurement of financial assets resulting from Phase 1 of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement).

Subject to AASB’s further modifications to AASB 9, together with the anticipated changes resulting from the staged projects on impairments and hedge accounting, details of impacts will be assessed.

AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian Accounts Standard arising from Reduced Disclosure Requirements

These standards set out the tiers of financial reporting and the reduced disclosure framework.

The Victorian Government is currentlyconsidering the impacts of ReducedDisclosure Requirements (RDRs) for certainpublic sector entities, and has not decidedif RDRs will be implemented in the Victorianpublic sector.

AASB 1055 BudgetaryReporting

AASB 1055 extends the scope of budgetaryreporting that is currently applicable for thewhole of government and general governmentsector (GGS) to NFP entities within the GGS,provided that these entities present separatebudget to the parliament.

This Standard is not applicable as nobudget disclosure is required.

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Page 14 of 53



37


NOTE 1


1.22 Critical accounting judgements and key sources of estimation uncertainty

Key sources of estimation uncertainty

•

•

•

Assets / Liabilities measured

at fair value

Fair Value Hierarchy

Valuation Technique(s) and key assumptions

Significant unobservable

input(s)

Relationship of unobservable inputs to fair

value

31/12/2013 31/12/2012Assets- $AUD

Assets- $AUD

Liabilities - $AUD

Liabilities - $AUD

In addition to the new standards above, the AASB has issued a list of amending standards that are not effective for the 2013 reporting period (as listed below). In general, these amending standards include editorial and references changes that are expected to have insignificant impacts on public sector reporting. The two AASB Interpretations in the list below are also not effective for the 2013 reporting period and considered to have insignificant impacts on public sector reporting.• AASB 2011-13 Amendments to Australian Accounting Standard - Improvements to AASB 1049• AASB 2010-10 Further Amendments to Australian Accounting Standards – Removal of Fixed Dates for First-time Adopters.• AASB 2011-2 Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project – Reduced Disclosure Requirements.• AASB 2011-3 Amendments to Australian Accounting Standards - Orderly adoption of Changes to the ABS GFS Manual and Related Amendments• AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements.• AASB 2011-6 Amendments to Australian Accounting Standards – Extending Relief from Consolidation, the Equity Method and Proportionate Consolidation – Reduced Disclosure Requirements.• AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards.• AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13.• AASB 2011-9 Amendments to Australian Accounting Standards - Presentation of Other Comprehensive Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039, 1049]• AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011).• AASB 2011-11 Amendments to AASB 119 (September 2011) arising from Reduced Disclosure Requirements.• AASB 2011-12 Amendments to Australian Accounting Standards arising from Interpretation 20• 2012-1 Amendments to Australian Accounting Standards – Fair Value Measurement – Reduced Disclosure Requirements.• 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities.• 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities.• 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009–2011 Cycle.• 2012-7 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements.• 2013-1 Amendments to AASB 1049 - Relocation of Budgetary Reporting Requirements• 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non Financial Assets• Interpretation 21 Levies

In the application of the Institute’s accounting policies, judgements, estimates and assumption about the carrying amounts of assets and liabilities must be made. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Fair value measurements and valuation processesSome of the Institute’s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability the Institute uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Institute engages third party qualified valuers to perform the valuation.

Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities is summarised below and at notes 9 and 27.

In addition, the following table provides an analysis of assets and liabilities that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Fair Value as at

1 Level 1 Quoted bid prices (unadjusted) in an active market for identical assets or liabilities that the entity can access at the measurement date.

NA NA

Page 17 of 53


NOTE 1




Biological assets

Bloodstock





Provisions

Employee benefits















Page 14 of 53



38


NOTE 1




•

•

•


at fair value




input(s)


value

31/12/2013 31/12/2012Assets- $AUD

Assets- $AUD

Liabilities - $AUD

Liabilities - $AUD










Fair Value as at


NA NA

Page 17 of 53


NOTE 1


Assets- $AUD

Assets- $AUD

Liabilities - $AUD

Liabilities - $AUD

Depreciated replacement cost as applied to non-specialised assets.

Assets- $AUD

Assets- $AUD

Liabilities - $AUD

Liabilities - $AUD

Details of Institute’s land and buildings and information about the recurring fair value measurement hierarchy as at 31 December 2013 are as follows:

2 Level 2 Discounted cash flow. Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

NA NA

3 Level 3

Depreciated replacement cost.

Specialised assets, estimates made on replacement cost of asset

The higher the construction cost, the higher the fair value.

2013

Level 1 Level 2 Level 3 Fair Value as at 31/12/13

AUD '000 AUD '000 AUD '000 AUD '000

Freehold land 1,034 1,034

Crown land

7,070 7,070

buildings used solely for educational purposes

32,293 32,293

buildings used for communal purposes

Page 18 of 53


NOTE 1


Assets- $AUD

Assets- $AUD

Liabilities - $AUD

Liabilities - $AUD

Depreciated replacement cost as applied to non-specialised assets.

Assets- $AUD

Assets- $AUD

Liabilities - $AUD

Liabilities - $AUD

Details of Institute’s land and buildings and information about the recurring fair value measurement hierarchy as at 31 December 2013 are as follows:

2 Level 2 Discounted cash flow. Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

NA NA

3 Level 3

Depreciated replacement cost.

Specialised assets, estimates made on replacement cost of asset

The higher the construction cost, the higher the fair value.

2013

Level 1 Level 2 Level 3 Fair Value as at 31/12/13

AUD '000 AUD '000 AUD '000 AUD '000

Freehold land 1,034 1,034

Crown land

7,070 7,070

buildings used solely for educational purposes

32,293 32,293

buildings used for communal purposes

Page 18 of 53


NOTE 1




•

•

•


at fair value




input(s)


value

31/12/2013 31/12/2012Assets- $AUD

Assets- $AUD

Liabilities - $AUD

Liabilities - $AUD










Fair Value as at


NA NA

Page 17 of 53


NOTE 1




Biological assets

Bloodstock





Provisions

Employee benefits















Page 14 of 53



39


NOTE 2

Income from Transactions

2013 2012

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 7,634 13,164

Other contributions by State Government 1,484 836

Total government contributions - operating 9,118 14,000

(ii) Government contributions - capital

Commonwealth capital - 1,060

State capital 600 2,478

Total government contributions - capital 600 3,538

Total government financial assistance 9,718 17,538

(b) Sales of goods and services

Student fees and charges 2,933 2,033

Rendering of services

Fee for service - Government 2,946 1,156

Fee for service - other 1,037 3,992

Total rendering of services 3,983 5,148

Other non-course fees and charges

Sale of goods 825 521

Total other fees and charges 825 521

Total revenue from sale of goods and services 7,741 7,702

(c) Interest

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

Interest on bank deposits 30 135

Total interest from financial assets not at fair value through P/L 30 135

Interest from financial assets at fair value through P/L:

Interest from debt securities 103 134

Total interest from financial assets at fair value through P/L 103 134

Net interest income 133 269

(d) Other income

Rental income:

Hire of campuses and accommodation units - 25

Total rental income - 25

Other revenue 191 498

Total other income 191 523

Institute

C:\Users\bbarker\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\DVYMQQ2Y\Book3

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40


NOTE 3


2013 2012

3 Expenses from transactions $'000 $'000

(a) Employee expenses

Salaries, wages, overtime and allowances 12,127 14,813

Superannuation 1,243 1,317

Payroll tax 740 781

Worker's compensation 138 112

Long service leave 218 252

Annual leave 127 154

Termination benefits 145 612

Casual, consulting and other staff costs 1,916 142

Total employee expenses 16,654 18,183

(b) Depreciation and amortisation

Depreciation of non-current assets

Buildings 942 1,114

Plant and equipment 849 884

Motor vehicles 165 182

Library collections 160 160

Land improvements 50 -

Furniture & Fittings 6 6

Total depreciation 2,172 2,346

Amortisation of non-current physical and intangible assets

Leasehold improvements 13 6

WAN Optiv Fibre Licence 32 32

Total amortisation 45 38

Total depreciation and amortisation 2,217 2,384

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

Grants and subsidies apprentices and trainees 18 23

Total grants and other transfers 18 23

(d) Supplies and Services

Purchase of supplies and consumables 985 1,136

Communication expenses 221 369

Contract and other services 719 993

Bad debts on sale of goods and services 667 -

Cost of goods sold/distributed (ancillary trading) 167 238

Building repairs and maintenance 477 470

Fees and charges 491 295

Total supplies and services 3,727 3,501

Institute

P:\My Documents\Book5

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41


NOTE 3


2013 2012

3 Expenses from transactions $'000 $'000

Institute

(e) Other Expenses

General Expenses

Marketing and promotional expenses 187 283

Occupancy expenses 555 473

Audit fees and services 47 67

Staff development 138 125

Travel and motor vehicle expenses 364 451

Motor vehicle taxes 62 32

Other expenses 420 323

Interest write off on CDOs - 320

Total general expenses 1,773 2,074

Operating lease rental expenses:

Minimum lease payments 14 206

Total operating lease rental expenses 14 206

Subtotal 1,787 2,280

Equipment below capitalisation threshold 386 508

Total other operating expenses 2,173 2,788

(f) Goodwill and Capitalised costs written off

Cafe Rossi goodwill written off 55 -

Port of Sale capitalised costs written off 2,059 -

Total goodwill and capitalised costs written off 2,114 -


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42


NOTE 5

Cash and cash equivalents

2013 2012

5 Cash and deposits $'000 $'000

Cash at bank and on hand 963 1,998

Deposits - at call with TCV 1,000 -

Total cash and cash equivalents 1,963 1,998

2013 2012

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

Balances as above 1,963 1,998

Balance as per cashflow statement 1,963 1,998

(b) Cash at bank and on hand

The effective rate on cash at bank varied from between 2.45% and 3.40% (2012: 2.95% and 4.20% ).

Institute

Institute

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

V:\Finance1\Reporting\Annual reports\2013\Framework\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) FINAL_2103

Page 17 of 47

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NOTE 4

Other economic flows included in net result

2013 2012

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 assets 78 (2)

Total net gain/(loss) on non-financial assets and liabilities 78 (2)

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

Net gain/(loss) arising from revaluation of long service leave liability (17) (25)

Total other gains/(losses) from other economic flows (17) (25)

1

Institute

Including PPE and intangible assets. Cafe Rossi goodwill and Port Of Sale capitalised costs written off.


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43


NOTE 6

Receivables

2013 2012

6 Receivables $'000 $'000

Current receivables

Contractual

Trade receivables1 1,307 852

Provision for doubtful contractual receivables(a) (See also Note 6(a) below) (700) (49)

Revenue receivable - 18

Total contractual 607 821

Statutory

Amounts owing from Victorian Government 248 1,092

GST receivable from ATO 41 52

Total statutory 289 1,144

Total current receivables 896 1,965

Total receivables 896 1,965

1

2013 2012

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

Balance at beginning of the year 49 20

Increase in provision recognised in the net result 651 29

Balance at end of the year 700 49

(b) Ageing analysis of contractual receivables

Please refer to Table (iv) Note 27(3) for the ageing analysis of contractual receivables.

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

Please refer to Note 27 for the nature and extent of credit risk arising from contractual receivables.

Institute

Institute

The average credit on sales of goods is 30 days. No interest is charged on the first 30 days from the date of invoice. Thereafter, credit collection charges are levied as incurred on the outstanding balance. A provision has been made for estimated irrecoverable amounts from the sale of goods determined by a detailed review of debtors in 90 days plus. The provision has been increased by $651k.


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44


NOTE 7

Investments, loans and other financial assets

2013 2012

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

Fixed Interest Term Deposits with TCV - 4,500

Total current investments and other financial assets - 4,500

Non-current investments and other financial assets

Debt securities:

Collateralised Debt Obligations - 1,938

Total debt securities - 1,938

Total non-current investments and other financial assets - 1,938

Total investments and other financial assets - 6,438

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

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

Institute

Please refer to Table (iv) in Note 27(3) for the ageing analysis of investments, loans and other financial assets.

Please refer to Note 27 for the nature and extent of risks arising from investments, loans and other financial assets.


Page 20 of 48

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NOTE 8

Inventories

2013 2012

8 Inventories $'000 $'000

Current

List type of inventories held

Supplies and consumables - at cost 21 43

Raw materials - at cost 56 56

Finished goods - at cost 12 -

Inventories held-for-sale:

at cost 59 65

Total current inventories 148 164

Institute


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45


NOTE 9


LandLand

ImprovementsBuildings

Construction in progress

Plant & Equipment

Motor Vehicles

Leasehold Improvements

Furniture & Fittings

Library Total

Institute $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

At 1 January 2012

Cost - - - - - - - - 733 733

Valuation 8,778 - 44,045 1,282 10,492 1,642 300 167 - 66,706

Accumulated depreciation - - (7,093) - (6,549) (913) (24) (143) (161) (14,883)

Net book amount 8,778 - 36,952 1,282 3,943 729 276 24 572 52,556

Year ended 31 December 2012

Opening net book amount 8,778 - 36,952 1,282 3,943 729 276 24 572 52,556

Additions 1,074 - 351 1,742 314 130 - - 1 3,612

Disposals - - - - (17) (63) - - - (80)

Net revaluation increments/ decrements 126 109 (3,064) - - - 9 - - (2,820)

Transfer to assets classified as held-for-sale - - - - - - - - - -

Impairment loss charged to net result - - - - - - - - - -

Depreciation expense & amortisation expense - - (1,114) - (884) (182) (6) (6) (160) (2,352)

Exchange differences - - - - - - - - - -

Reclassification (1,874) 1,874 - - - - - - - -

Closing net book amount 8,104 1,983 33,125 3,024 3,356 614 279 18 413 50,916

At 31 December 2012

Cost - - - - - - - - 734 734

Valuation 8,104 2,438 44,735 3,024 10,769 1,568 509 168 - 71,315

Accumulated depreciation - (455) (11,610) - (7,413) (954) (230) (150) (321) (21,133)

Net book amount 8,104 1,983 33,125 3,024 3,356 614 279 18 413 50,916


Opening net book amount 8,104 1,983 33,125 3,024 3,356 614 279 18 413 50,916

Additions - - 110 - 161 223 - - - 494

Disposals - - - - - (59) - - - (59)

Impairment loss charged to net result - - - (2,059) - - - - - (2,059)

Depreciation & amortisation expense - (50) (942) - (849) (165) (13) (6) (160) (2,185)


Closing net book amount 8,104 1,933 32,293 965 2,668 613 266 12 253 47,107

At 31 December 2013

Cost - - - - - - - - - -

Valuation 8,104 2,438 44,845 965 10,930 1,732 509 168 734 70,425

Accumulated depreciation - (505) (12,552) - (8,262) (1,119) (243) (156) (481) (23,318)

Net book value at the end of the financial year 8,104 1,933 32,293 965 2,668 613 266 12 253 47,107

(a) Valuations of Property, Plant and Equipment

(b) Non‑current assets pledged as securityThere are no non current assets pedged as security

Fair value assessments have been performed at 31 December 2013 for all classes of assets. This assessment demonstrated that fair value was materially similar to carrying value, and therefore a full revaluation was not required this year. The next scheduled full revaluation for this purpose Institute will be conducted in 2017.


Page 22 of 48

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NOTE 9


LandLand

ImprovementsBuildings

Construction in progress

Plant & Equipment

Motor Vehicles

Leasehold Improvements

Furniture & Fittings

Library Total

Institute $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

At 1 January 2012

Cost - - - - - - - - 733 733

Valuation 8,778 - 44,045 1,282 10,492 1,642 300 167 - 66,706

Accumulated depreciation - - (7,093) - (6,549) (913) (24) (143) (161) (14,883)

Net book amount 8,778 - 36,952 1,282 3,943 729 276 24 572 52,556


Opening net book amount 8,778 - 36,952 1,282 3,943 729 276 24 572 52,556

Additions 1,074 - 351 1,742 314 130 - - 1 3,612

Disposals - - - - (17) (63) - - - (80)

Net revaluation increments/ decrements 126 109 (3,064) - - - 9 - - (2,820)

Transfer to assets classified as held-for-sale - - - - - - - - - -

Impairment loss charged to net result - - - - - - - - - -

Depreciation expense & amortisation expense - - (1,114) - (884) (182) (6) (6) (160) (2,352)


Reclassification (1,874) 1,874 - - - - - - - -

Closing net book amount 8,104 1,983 33,125 3,024 3,356 614 279 18 413 50,916

At 31 December 2012

Cost - - - - - - - - 734 734

Valuation 8,104 2,438 44,735 3,024 10,769 1,568 509 168 - 71,315

Accumulated depreciation - (455) (11,610) - (7,413) (954) (230) (150) (321) (21,133)

Net book amount 8,104 1,983 33,125 3,024 3,356 614 279 18 413 50,916


Opening net book amount 8,104 1,983 33,125 3,024 3,356 614 279 18 413 50,916

Additions - - 110 - 161 223 - - - 494

Disposals - - - - - (59) - - - (59)

Impairment loss charged to net result - - - (2,059) - - - - - (2,059)

Depreciation & amortisation expense - (50) (942) - (849) (165) (13) (6) (160) (2,185)


Closing net book amount 8,104 1,933 32,293 965 2,668 613 266 12 253 47,107

At 31 December 2013

Cost - - - - - - - - - -

Valuation 8,104 2,438 44,845 965 10,930 1,732 509 168 734 70,425

Accumulated depreciation - (505) (12,552) - (8,262) (1,119) (243) (156) (481) (23,318)

Net book value at the end of the financial year 8,104 1,933 32,293 965 2,668 613 266 12 253 47,107

(a) Valuations of Property, Plant and Equipment

(b) Non‑current assets pledged as securityThere are no non current assets pedged as security

Fair value assessments have been performed at 31 December 2013 for all classes of assets. This assessment demonstrated that fair value was materially similar to carrying value, and therefore a full revaluation was not required this year. The next scheduled full revaluation for this purpose Institute will be conducted in 2017.


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46


NOTE 10

Biological assets

10 Biological assets

2013 2012

Consumable assets $'000 $'000

Mature assets

Cattle 13 19

Total consumable assets 13 19

Qty Qty

Quantities

Cattle 24 31

Total quantity of consumable assets 24 31

Output

Natural increase 11 -

Total quantity of output 11 -

$'000 $'000

Fair value of output was

Determined using market value 6 -

Total fair value of output 6 -

2013 2012

10 Biological assets $'000 $'000

Reconciliation of changes in carrying amount of biological assets

Carrying amount at 1 January 19 30

Increases due to:

Births 6 -

Decreases attributable to:

Sales (6) (11)

Other (6) -

Carrying amount at 31 December 13 19

(a) Valuations of biological assets

Institute

Biological assets - animals

Biological assets - reconciliation

Institute

The fair value was determined based on the market comparable approach that reflects recent transaction prices for similar assets. In estimating the fair value of the assets, the highest and best use of the assets in their current use. There has been no change to the valuation technique during the year.


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47


NOTE 11

Intangible assets

Goodwill SoftwareTrademarks & Licences

Total

Institute $’000 $’000 $’000 $’000

At 1 January 2012

Cost 55 - 645 700

Accumulated amortisation and impairment - - (103) (103)

Net book amount 55 - 542 597


Opening net book amount 55 - 542 597

Amortisation charge 1 - - (32) (32)

Closing net book amount 55 - 510 565

At 31 December 2012

Cost 55 - 645 700

Accumulated amortisation and impairment - - (135) (135)

Net book amount 55 - 510 565


Opening net book amount 55 - 510 565

Additions - 3,736 - 3,736

Impairment losses charged to net result (55) - - (55)

Amortisation charge 1 - - (32) (32)

Closing net book amount - 3,736 478 4,214

At 31 December 2013

Cost 55 - 645 700

Accumulated amortisation and impairment (55) 3,736 (167) 3,514

Net book value at the end of the financial year - 3,736 478 4,214


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48


NOTE 12

Other non-financial assets

2013 2012

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

Current other non-financial assets

Prepayments 143 -

Total current other non-financial assets 143 -

Total other non-financial assets 143 -

Institute


Page 25 of 48

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NOTE 13

Payables

2013 2012

13 Payables $'000 $'000

Current

Contractual

Supplies and services 413 856

Wages and salaries 117 -

Amounts payable to government and agencies - 1,911

Revenue in advance 593 395

1,123 3,162

Statutory

GST payable 69 147

FBT payable 5 -

Total current payables 1,197 3,309

Total payables 1,197 3,309

The carrying amounts of the Institutes payables are denominated in the following currencies:

2013 2012

(a) Foreign currency risk $'000 $'000

Australian Dollars 1,197 3,309

1,197 3,309

Notes1

Maturity analysis of contractual payables

Refer to Note 27 for maturity analysis of contractual payables.

Institute

Institute

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.


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49

2013 2012

NOTE 12: OTHER NON-FINANCIAL ASSETS $’000 $’000

Current other non-financial assets

Prepayments 144 -

Total current other non-financial assets 144 -

Total other non-financial assets 144 -


NOTE 14

Provisions

2013 2012

14 Provisions $'000 $'000

Current provisions expected to be settled within 12 months

Employee benefits

Annual leave 338 349


Total current provisions expected to be settled within 12 months 519 575

Current provisions expected to be settled after 12 months

Employee benefits

Long service leave 1,256 1,332

Total current provisions expected to be settled after 12 months 1,256 1,332

Total current provisions 1,775 1,907

Non-current

Employee benefits:


Total non-current provisions 322 335

Total provisions 2,097 2,242

2013 2012

Movements in Provisions $'000 $'000

Carrying amount at start of year 2,242 2,765

Additional provisions recognised 1,051 347

Amounts used (1,213) (880)

Unused amounts reversed - (15)

Increase in discounted amount 17 25

Carrying amount at end of year 2,097 2,242

Movements in each class, other than employee provisions during the financial year areset out below:

Institute

Institute


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50


NOTE 15

Equity

2013 2012

15 Equity $'000 $'000

(a) Contributed Capital

Balance at 1 January 15,556 15,556

Capital contributions 3,736 -

Balance at 31 December 19,292 15,556

(b) Accumulated surplus / (deficit)


Net result for the year (9,058) (874)


(c) Reserves

Composition of Reserves

Land surplus 4,517 4,517

Buildings surplus 4,177 4,177

Available-for-sale revaluation surplus1 388 388


Total equity 51,190 56,512

2013 2012

15 Movements in Reserves $'000 $'000

Asset Revaluation Surplus - Land


Revaluation increment on non-current assets - 244


Asset Revaluation Surplus - Buildings


Revaluation (decrement) on non-current assets - (3,064)


Financial assets available-for-sale revaluation surplus

Balance at 1 January 388 390

Valuation gain/(loss) recognised - (2)

Balance at 31 December 388 388

Institute

Institute


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51

Financial Reporting Framework


NOTE 16

Cash flow information

2013 2012

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 (9,058) (874)

Non-cash flows in operating result

Depreciation and amortisation of non-current assets 2,217 2,384

Net (gain) / loss on sale of non-current assets (79) 2

Goodwill write off 55 -

Port of Sale transfer - (543)

Capitalised costs write off 2,059 -

Trade Centre land transfer - (1,074)

Movement in allowance for doubtful debts 651 29

Net gain/(loss) on employee benefits provision 17 25

Total non-cash flows in operating result 4,920 823

Movements in operating assets and liabilities

Decrease / (increase) in trade receivables (455) 21

Decrease / (increase) in inventories 17 (6)

Decrease / (increase) in other debtors 872 1,456

Increase / (decrease) in payables (2,111) (220)

Increase / (decrease) in employee benefits (164) (548)

Increase / (decrease) in other financial assets (143) -

Total movement in operating assets and liabilities (1,984) 703

Net cash flows provided by/(used in) operating activities (6,123) 652

Institute


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52



NOTE 17

Commitments

2013 2012

17 Commitments $'000 $'000

(a) Lease commitments

Within one year 140 53

Later than one year but not later than five years 291 188

Later than five years 1,087 1,007

Total lease commitments 1,518 1,248

GST reclaimable on the above (138) (113)

Net commitments operating leases 1,380 1,135

Representing:

Cancellable operating leases 1,233 1,248

Non-cancellable operating leases 147 -

Total lease commitments 1,380 1,248

(i) Operating leases

2013 2012

$'000 $'000

Centrally Managed Property Leases - 46

Total centrally managed property leases - 46

Lease Commitments

Institute

As at the reporting date leased property centrally managed and paid on behalf of the Institute by the Office of Training and Tertiary Education were as follows:

Commitments in relation to leases contracted for at the reporting date but not recognised as liabilities, payable:

Institute


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NOTE 18

Leased assets

2013 2012

18 Leased assets $'000 $'000

As at the reporting date the Institute leased out the following assets:

Café & canteen - Forestech campus, Kalimna - 3

Building K - Fulham campus, Sale - 19

Gross amount of leased assets - 22

Institute

The Institute leases out certain land, buildings and equipment, which are excess to current requirements, at current market rates.


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53



NOTE 19

Contingent Assets and Contingent Liabilities

There were no known contingent assets or contingent liabilities as at balance date (2012 - Nil)


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NOTE 20

Economic dependency

2013 2012

20 Economic dependency $'000 $'000

Higher Education & Skills Group 7,634 13,164

7,634 13,164

1 Higher Education & Skills Group

Institute

The Institute is dependent on a significant volume of revenue derived from the Higher Education & Skills Group (formerly the Victorian Skills Commission). The revenues predominantly fund the delivery of general and specific training courses.


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NOTE 22

Remuneration of auditors

2013 2012

22 Remuneration of auditors $'000 $'000

Remuneration of Victorian Auditor General's Office for:

Audit or review of the financial statements 20 23

Total remuneration of Victoria Auditor General's Office 20 23

Remuneration of other auditors

Internal Auditors 27 44

Total remuneration of other auditors of subsidiaries 27 44

Total Remuneration of auditors 47 67

Institute


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NOTE 21

Subsequent events

21 Subsequent events

Advance TAFE have signed a memorandum of understanding whereby Advance TAFE will be amalgamated wtih Gipps TAFE to form a combined operation commencing on the 1st May 2014 to trade under the name Federation Training with a view to then being amalgamated into the operation of Federation University of Australia pending acceptable financial and operating performance over a twenty month period. In doing so the amalgamated operations receive support funding through the state government's TAFE Structural Adjustment Fund as announced by the Minister on the 16th April 2014 to support the amalgamation activities.

P:\My Documents\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) v10_0704_2404

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NOTE 21

Subsequent events


Advance TAFE have signed a memorandum of understanding whereby Advance TAFE will be amalgamated wtih Gipps TAFE to form a combined operation commencing on the 1st May 2014 to trade under the name Federation Training with a view to then being amalgamated into the operation of Federation University of Australia pending acceptable financial and operating performance over a twenty month period. In doing so the amalgamated operations receive support funding through the state government's TAFE Structural Adjustment Fund as announced by the Minister on the 16th April 2014 to support the amalgamation activities.

P:\My Documents\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) v10_0704_2404

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Macintosh HD:Users:tamaramarsh:Downloads:Advance TAFE -‐ 2013 Accounts (Final updated for AASB 119 AASB13) v10_0704_2904.xlsx

Page 1 of 1

30/04/14 12:28 PM


Notes to the Financial Statements -‐ Advance TAFEfor the year ended 31 December 2013

NOTE 21

Subsequent events


Advance TAFE have signed a memorandum of understanding whereby Advance TAFE will be amalgamated with Gipps TAFE to form a combined operation commencing on the 1st May 2014 to trade under the name Federation Training with a view to then being amalgamated into the operation of Federation University of Australia pending acceptable financial and operating performance over a twenty month period. In doing so the amalgamated operations receive support funding through the state government's TAFE Structural Adjustment Fund as announced by the Minister on the 16th April 2014 to support the amalgamation activities.



54



NOTE 23

Superannuation (Part I)

2013 2012

23 Superannuation $'000 $'000

Paid Contribution for the Year

Defined benefit plans :

State Superannuation Fund – revised and new 50 100

Total defined benefit plans 50 100

Defined contribution plans:

VicSuper 786 866

Other 406 351

Total defined contribution plans 1,192 1,217

Total paid contribution for the year 1,242 1,317

Contribution Outstanding at Year End

Defined benefit plans:

State Superannuation Fund – revised and new 3 7

Total defined benefit plans 3 7

Defined contribution plans:

VicSuper 57 60

Other 31 29

Total defined contribution plans 88 89

Total 91 96

1 In accordance with the accounting policy the Institute does not recognise any defined benefits liabilities. As at the reporting data there were no loans to the Institute from any fund.

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.

Institute

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


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55



NOTE 24

Key management personnel disclosures (Part I)

Responsible persons related disclosures

(i) Minister

(ii) Members of the Board of Advance TAFE of TAFE Board

Ministerial appointment

(iii) Executive Officers

Chief Executive Officer - Shaun McDonagh (appointed 31/07/2013)

There were no other key management personnel.

All of the above persons were also key management persons during the year ended 31 December 2013

2013 2012

24 Key management personnel disclosures $'000 $'000

Remuneration of Board members

Board Nominee Director - Andrew Reynolds (appointed 01/09/13)

Institute

The following persons also had authority and responsibility for planning, directing and controlling the activities of Institute during the financial year:

Responsible persons

Executive Manager Corporate Services - Nicholas Fordham (appointed 02/07/13)

Executive Manager Learning and Innovation - Karen Bird (appointed 13/07/13)

Executive Manager Learning and Innovation - Catherine Brigg (resigned 12/07/13)

Chief Finance Officer - Brenton Barker (appointed 23/09/13)

Executive Manager Development - Jane Ponting (resigned 13/09/13)

Executive Manager Corporate Services - Peter Quilligan (resigned 01/07/13)

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.

The relevant Minister is The Hon Peter Hall MP, Minister for Higher Education and Skills. 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.

Board Director / Chair - Scott Rossetti

Board Director - Angus Hume

Board Nominee Director - Thelma Hutchinson (appointed 01/09/13)

Board Director - Catherine GreavesBoard Director - Lyndon WebbBoard Director - Gabrielle Bell

Board Nominee Director - Dianne Wilkinson (appointed 01/09/13)Board Nominee Director - Tim Weight (appointed 01/09/13)


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56



NOTE 24


88 368

- -

No. No.

Income range

Less than $10,000 5 9

$10,000 - $19,999 4 2

$300,000 - $309,999 - 1

Total number of Responsible Persons 9 12

$'000 $'000

Retirement benefits of Board members

- -

Total retirement benefits of Board members - -

2013 2012


Executive Officers' Remuneration

Base remuneration of executive officers 527 429

Total remuneration of executive officers 527 462

No. No.

Income range

$20,000 - $29,999 - -

$30,000 - $39,999 1 -

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.

The retirement benefits paid by the Institute in connection with the Board members of the Institute amounted to:

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

Executive officers

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:

Institute

Remuneration received, or due and receivable from the Institute in connection with the management of any related party entity.


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NOTE 24


Responsible persons related disclosures

(i) Minister

(ii) Members of the Board of Advance TAFE of TAFE Board

Ministerial appointment

(iii) Executive Officers

Chief Executive Officer - Shaun McDonagh (appointed 31/07/2013)

There were no other key management personnel.

All of the above persons were also key management persons during the year ended 31 December 2013

2013 2012


Remuneration of Board members

Board Nominee Director - Andrew Reynolds (appointed 01/09/13)

Institute

The following persons also had authority and responsibility for planning, directing and controlling the activities of Institute during the financial year:

Responsible persons

Executive Manager Corporate Services - Nicholas Fordham (appointed 02/07/13)

Executive Manager Learning and Innovation - Karen Bird (appointed 13/07/13)

Executive Manager Learning and Innovation - Catherine Brigg (resigned 12/07/13)

Chief Finance Officer - Brenton Barker (appointed 23/09/13)

Executive Manager Development - Jane Ponting (resigned 13/09/13)

Executive Manager Corporate Services - Peter Quilligan (resigned 01/07/13)

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.

The relevant Minister is The Hon Peter Hall MP, Minister for Higher Education and Skills. 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.

Board Director / Chair - Scott Rossetti

Board Director - Angus Hume

Board Nominee Director - Thelma Hutchinson (appointed 01/09/13)

Board Director - Catherine GreavesBoard Director - Lyndon WebbBoard Director - Gabrielle Bell

Board Nominee Director - Dianne Wilkinson (appointed 01/09/13)Board Nominee Director - Tim Weight (appointed 01/09/13)


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57



NOTE 24


88 368

- -

No. No.

Income range

Less than $10,000 5 9

$10,000 - $19,999 4 2

$300,000 - $309,999 - 1

Total number of Responsible Persons 9 12

$'000 $'000

Retirement benefits of Board members

- -

Total retirement benefits of Board members - -

2013 2012


Executive Officers' Remuneration

Base remuneration of executive officers 527 429

Total remuneration of executive officers 527 462

No. No.

Income range

$20,000 - $29,999 - -

$30,000 - $39,999 1 -

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.

The retirement benefits paid by the Institute in connection with the Board members of the Institute amounted to:

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

Executive officers

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:

Institute

Remuneration received, or due and receivable from the Institute in connection with the management of any related party entity.


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NOTE 24


$60,000 - $69,999 2 -

$70,000 - $79,999 2 -

$80,000 - $89,999 1 -

$110,000 - $129,999 - -

$130,000 - $139,999 1 -

$140,000 - $149,999 - 1

$150,000 - $159,999 - 1

$160,000 - $169,999 - 1

Total executive officers 7 3

Total annualised employee equivalent (AEE) 4 3

2013 2012

24 Key management personnel disclosures No. No.

Excutive Officers' personnel compensation

Termination benefits 1 -

Total key management personnel compensation 1 -

Institute

Key management personnel


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58



NOTE 25

Related parties

Key management personnel

Disclosures relating to directors and specified executives are set out in Note 24.

Transactions with related parties

There were no transactions at any time during the year with related parties.


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NOTE 26

Institute details

26 Institute details

The registered office of the Institute is:

Advance TAFE

48 Main st, Bairnsdale VIC 3875

The principal place of business is:

Advance TAFE

48 Main st, Bairnsdale VIC 3875


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59



NOTE 27- 1

Financial Instruments (Part I)

27 Financial Instruments

Financial risk management

(i) Financial risk management objectives

(ii) Financial risk exposures and management

Carrying amount of financial instruments by category: 2013 2012$'000 $'000

Financial Assets Note CategoryCash and Deposits 5 Cash 1,963 1,998 Receivables (a) 6 Loans and receivables 607 821 Other financial assets 7 Other financial assets - - Term Deposit - 4,500 Collateralised Debt Obligations - 1,938

2,570 9,257

Financial LiabilitiesPayables (a) 13 Financial liabilities 1,123 3,162

1,123 3,162

Institute

The Institute's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Institute's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Institute. The Institute uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk.

Risk management is carried out by a central treasury unit with the Finance function of the Institute under policies approved by the Board. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

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, financial liability and equity instrument is disclosed in note 1 of the financial statements.

The Institute's financial instruments consist mainly of deposits with banks, local money market instruments, short term investments, accounts receivables and payables and leases.

The main risks the Institute is exposed to through its financial instruments are market risk, foreign currency risk, price risk, funding risk, interest rate risk, credit risk and liquidity risk.

(iii) Categorisation of financial instruments


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60



NOTE 27- 1


Net holding gain/(loss) on financial instruments by category: 2013 2012$'000 $'000

Financial Assets CategoryOther financial assets Other financial assets - - Collateralised Debt Obligations - (62)

- - Note:

Market risk

Foreign currency risk

Price risk

Interest rate risk

Funding risk

Concentrations of credit risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, 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 risk is the risk 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 manages funding risk by continuing to diversify and increase funding from Commercial activities, both domestically and off shore.

The model used by the Victorian State Government to fund TAFE Institutes is undergoing continued change and the Institute has implemented controls to manage the funding risk and monitor its impact.

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 objective is to manage the rate risk 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.

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

The Institute is exposed to price risk in respect of changes to the market price of investments.

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

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

Institute

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

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


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61



NOTE 27- 1


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

In view of the working capital levels as at the 31st December 2013 weekly cash flow monitoring is taking place as turn around initiatives are closely monitored.

Liquidity risk

• All loan monies must relate to the cost of attendance at the Institute, whether that be for fees, materials, books or protective clothing, etc.

• A schedule of repayment is agreed with the student at the time of making application.

• If a student falls behind in repayments, a process is implemented which includes reminder letters, individual interview, repayment rescheduling and, if necessary, contacting guarantors and/or a debt collection agency.

The Institute minimises credit risk in relation to student loans receivable in the following ways:

• Specific loan conditions have been established which are applicable to all loans. A $50 loan fee was established in 2008 to minimise the number of student loans, and encourage up-front payments.

• Loan terms can range up to 6 months &/or to the end of the course, whichever falls first.

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

The trade receivables balance at 31 December 2013 and 31 December 2012 do not include any counter parties with external credit ratings. Customers are assessed for credit worthiness using the criteria detailed above.

• all potential customers are rated for credit worthiness taking into account their size, market position and financial standing; and

• customers that do not meet the group’s strict credit policies may only purchase in cash or using recognised credit cards.

Credit risk is managed on a category basis and reviewed regularly by the audit and risk committee. It arises from exposures to customers as well as through deposits with financial institutions.

The finance committee monitors credit risk by actively assessing the rating quality and liquidity of counter parties:

• surplus cash reserves must be invested with the Treasury Corporation of Victoria or the Victorian Funds Management Corporation.

There are no material amounts of collateral held as security at 31 December 2013.


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62



NOTE 27 - 2

Financial Instruments (Part II)

27 Financial instruments

(ii) Summarised sensitivity analysis

Result Equity Result Equity Result Equity Result Equity

31 December 2013 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Financial assets

Cash and deposits 1,963 (20) (20) 20 20 - - - -

Receivables 607 - - - - - - - -

Other financial assets - - - - - - - - -

Term Deposit - - - - - - - - -

Total increase/ (decrease) in financial assets 2,570 (20) (20) 20 20 - - - -


Payables (1,123) - - - - - - - -

Total increase/ (decrease) in financial liabilities (1,123) - - - - - - - -

Total increase/ (decrease) 1,447 (20) (20) 20 20 - - - -

Result Equity Result Equity Result Equity Result Equity

31 December 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Financial assets

Cash and cash equivalents 1,998 (20) (20) 20 20 - - - -

Receivables 821 - - - - - - - -

Other financial assets - - - - - - - - -

Term Deposit 4,500 - - - - - - - -

Collateralised Debt Obligations 1,938 - - - - - - - -

Total increase/ (decrease) in financial assets 9,257 (20) (20) 20 20 - - - -


Payables (3,162) - - - - - - -

Total increase/ (decrease) in financial liabilities (3,162) - - - - - - - -

Total increase/ (decrease) 6,095 (20) (20) 20 20 - - - -

1% -5% 5%

The following table summarises the sensitivity of the Institute’s financial assets and financial liabilities to interest rate risk, foreign exchange risk and other price risk.

Other price risk

-1% 1% -5% 5%

Carrying amount

Carrying amount

Interest rate risk

Interest rate risk Other price risk

-1%


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63



NOTE 27 - 3

Financial instruments (Part III)


(iii) Financial instrument composition and interest rate exposure

Weighted average

effective rate

Total Carrying Amount per

Balance Sheet

Floating interest rate

Fixed interest rate

Non-Interest Bearing

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

Financial assets

Cash and deposits

Cash at bank and on hand 2.45 963 963 - -

Contractual receivables -

Trade receivables - 607 - - 607

Investment, loans and other financial assets - Term Deposit - - - - -

Total financial assets 1,570 963 - 607

Trade and other payables - 1,123 - - 1,123

Total financial liabilities - 1,123 - - 1,123

Weighted average

effective rate


Balance Sheet


Fixed interest rate


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

Financial assets


Cash at bank and on hand 3.64 1,998 1,998 - -



Investments, loans and other financial assets - Term Deposit 3.90 4,500 - 4,500 - Collateralised Debt Obligations - 1,938 1,938 - -

Total financial assets 9,257 3,936 4,500 821

Financial liabilities -



Note1. Other receivables does not include statutory receivables.

(iv) Ageing analysis of financial assets

Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years

Contractual receivables

Trade receivables 607 458 171 39 639 - (700)

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

Total 2013 financial assets 607 458 171 39 639 - (700)


Trade and other payables 1,197 1,190 7 - - - -

Total 2013 financial liabilities 1,197 1,190 7 - - - -

2012 Financial assets


Trade receivables 803 - 351 200 252 - (49)

Revenue receivables 18 18 - - - - -

Investments, loans and other financial assets - Term Deposit 4,500 4,500 - - - - - Collateralised Debt Obligations 1,938 - - - - 2,000 (62)

Total 2012 financial assets 7,259 4,518 351 200 252 2,000 (111)


Trade and other payables 3,162 3,162 - - - - -

Total 2012 financial liabilities 3,162 3,162 - - - - -

2012 Financial liabilities

Impaired financial

assets

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 contractural maturity analysis for the Institute's financial assets and financial liabilities.


Maturity datesCarrying amount

Not past due and not

impaired

2013

2012

Exposure to interest rate risk is insignificant and may arise primarily through the Institute’s borrowings. Minimisation of risk is achieved by mainly undertaking fixed rate or non interest bearing financial instruments. For financial liabilities, the Institute mainly undertakes financial liabilities with relatively even maturity profiles. The Institute’s borrowings are managed by [specify] and any movements in interest rates are monitored on a daily basis. [amend as appropriate for the Institute]The Department’s exposure to interest rate risk is set out below



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NOTE 27 - 3




Weighted average

effective rate


Balance Sheet


Fixed interest rate


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

Financial assets

Cash and deposits








Weighted average

effective rate


Balance Sheet


Fixed interest rate


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

Financial assets












Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years


















Impaired financial

assets






impaired

2013

2012




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64



NOTE 27 - 3




Weighted average

effective rate


Balance Sheet


Fixed interest rate


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

Financial assets

Cash and deposits








Weighted average

effective rate


Balance Sheet


Fixed interest rate


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

Financial assets












Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years


















Impaired financial

assets






impaired

2013

2012




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NOTE 27 - 3




Weighted average

effective rate


Balance Sheet


Fixed interest rate


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

Financial assets

Cash and deposits








Weighted average

effective rate


Balance Sheet


Fixed interest rate


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

Financial assets












Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years


















Impaired financial

assets






impaired

2013

2012




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65



NOTE 27- 4

Financial instruments (IV)


Fair value estimation

Carrying Amount

Net Fair Value

Carrying Amount

Net Fair Value

27 Financial instruments $’000 $’000 $’000 $’000

Financial assets


Cash at bank and on hand 963 963 1,998 1,998

Deposits at call 1,000 1,000 - -


Trade receivables 607 607 821 821

Receivables from other parties 289 289 1,144 1,144

Investments, loans and other financial assets

Term Deposit - - 4,500 4,500

Collateralised Debt Obligations - - 1,938 1,938

Total financial assets 2,859 2,859 10,401 10,401


Payables 1,123 1,123 3,162 3,162

Borrowings - - - -

Total financial liabilities 1,123 1,123 3,162 3,162

2012

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

The fair value of financial instruments traded in active markets (such as publicly traded derivatives) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Institute is the current bid price.

The fair values of unlisted shares are based on cash flows discounted using a rate based on the market interest rate and the risk premium specific to the unlisted securities .

Derivative contracts classified as held-for-trading are fair valued by comparing the contracted rate to the current market rate for a contract with the same remaining period to maturity.

The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives) is determined using valuation techniques. The Institute uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward exchange contracts is determined using forward exchange market rates at the balance sheet date.

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 market interest rate that is available to the Institute 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. Financial assets where the carrying amount exceeds fair values have not been written down as the Institute intends to hold these assets to maturity.

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

2013


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66



NOTE 27- 4

Financial instruments (IV)

•

•

•

Fair value measurements recognised in the balance sheet are categorised into the following levels:

Level 1 Level 2 Level 3

2013 Quoted

Prices Observable Price Inputs

Un-observable

Inputs

$’000 $‘000 $‘000 $‘000

Financial assets

Collateralised Debt Obligations - - - -

Total financial assets - - - -

Level 1 Level 2 Level 3

2012 Quoted

Prices Observable Price Inputs

Un-observable

Inputs

$’000 $‘000 $‘000 $‘000

Financial assets

Collateralised Debt Obligations 1,938 - 1,938 -

Total financial assets 1,938 - 1,938 -

The following tables provide an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.


Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).


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67

Disclosure IndexITEM NO.

SOURCE REFERENCE REPORTING REQUIREMENT

PAGE NO.

REPORT OF OPERATIONS

CHARTER AND PURPOSE

1 FRD 22D Manner of establishment and the relevant Minister 5

2 FRD 22D Objectives, functions, powers and duties 5

3 FRD 22D Nature and range of services provided including communities served 5

MANAGEMENT AND STRUCTURE

4 FRD 22D Organisational structure and chart, including accountabilities 7

5 FRD 22D Names of Board members 6

FINANCIAL AND OTHER INFORMATION

6 FRD 03A Accounting for Dividends 31

7 FRD 07A Early adoption of authoritative accounting pronouncements n/a

8 FRD 10 Disclosure Index 67-70

9 FRD15B Executive officer disclosures 55-57

10 FRD 17A Long Service leave wage inflation and discount rates 34, 49

11 FRD19 Private provision of public infrastructure n/a

12 FRD 20A Accounting for State motor vehicle lease arrangements prior to 1 Feb 2004 n/a

13 FRD22 & SD 4.2(k)

Operational and budgetary objectives, performance against objectives and achievements 21-66

14 FRD 22D Occupational health and safety statement including performance indicator and performance against those indicators

14

15 FRD 22D Workforce data for current and previous reporting period including a statement on employment and conduct principles

10-11, 15

16 FRD 22D Summary of the financial results for the year including previous 4 year comparisons 19

17 FRD 22D Significant changes in financial position during the year 28

18 FRD 22D Major changes or factors affecting performance 28

19 FRD 22D Post-balance sheet date events likely to significantly affect subsequent reporting periods 28

20 FRD 22D Summary of application and operation of the Freedom of Information Act 1982 15

21 FRD 22D Statement of compliance with building and maintenance provisions of the Building Act 1993 14

22 FRD 22D Statement on National Competition Policy 15

23 FRD 22D Summary of application and operation of the Protected Disclosure Act 2012 15

24 FRD 22D Summary of Environmental Performance. 15

25 FRD 22C Details of consultancies over $10,000 (refer to FRD for information required) 15

26 FRD 22C Details of consultancies under $10,000 (refer to FRD for information required) 15

27 FRD 22D List of certain other information available on request (as specified in the FRD) 14

28 FRD 24C Reporting of office based environmental impacts 15

29 FRD 25A Victorian Industry Participation Policy Disclosures 15


68

Disclosure Index

ITEM NO.


PAGE NO.

30 FRD 26A Accounting for VicFleet motor vehicle lease arrangements on or after 1 February 2004 n/a

31 FRD 29 Workforce Data Disclosures on the public service employee workforce 11

32 FRD30A Standard requirements for the design and print of annual reports 2

33 SD 4.5.5 Risk Management compliance attestation 16

34 SD 4.2 (g) Qualitative and Quantitative information to be included 4-16

35 SD 4.2 (h) Statement that Report prepared in accordance with Financial Reporting Directions 21

36 SD 4.2 (j) Sign-off by member of Responsible Body 21

37 CG 10 (clause 27)

Major Commercial Activities 12-13

38 CG 12 (clause 33)

Controlled Entities 28

FINANCIAL REPORT

FINANCIAL STATEMENTS REQUIRED UNDER PART 7 OF THE FINANCIAL MANAGEMENT ACT 1984

39 SD 4.2 (a) The financial statements must be prepared in accordance with:

• Australian accounting standards (AAS and AASB standards) and other mandatory professional reporting requirements (including urgent issues group consensus views);

• Financial Reporting Directions; and

• business rules.

21

21

21

40 SD 4.2 (b) The financial statements are to comprise the following:

• income statement;

• balance sheet;

• statement of recognised income and expense; and

• cash flows statement; and

• notes to the financial statements.

23

24

25

26

27-66

OTHER REQUIREMENTS UNDER STANDING DIRECTION 4.2

41 SD 4.2 (c) The financial statements must where applicable be signed and dated by the Accountable Officer, CFAO and a member of the Responsible Body, stating whether, in their opinion:

• the financial statements present fairly the financial transactions during the reporting period and the financial position at the end of the period;

• the financial statements are prepared in accordance with this direction and applicable Financial Reporting Directions; and

• the financial statements comply with applicable Australian accounting standards (AAS and AASB standards) and other mandatory professional reporting requirements (including urgent issues group consensus views).

21-22

21-22

21-22

42 SD 4.2 (d) Rounding of amounts. 35

43 SD 4.2 (e) Review and sign off by Audit Committee or responsible body 17, 22

44 SD 4.2 (f) Compliance with DTF Model Financial report 21-66


69

ITEM NO.


PAGE NO.

OTHER REQUIREMENTS AS PER FINANCIAL REPORTING DIRECTIONS IN NOTES TO THE FINANCIAL STATEMENTS

45 FRD 9A Disclosure of administered assets and liabilities n/a

46 FRD 11 Disclosure of ex-gratia payments 15

47 FRD 21B Disclosures of Responsible Persons, Executive Officer and Other Personnel (Contractors with significant management responsibilities) in the Financial Report

55-57

48 FRD 101 First time adoption n/a

49 FRD 102 Inventories 33, 44

50 FRD 103D Non-current physical assets 32-33, 45

51 FRD 104 Foreign currency 28,42, 48, 59

52 FRD 105A Borrowing costs n/a

53 FRD 106 Impairment of assets 32, 45

54 FRD 109 Intangible assets 33, 47

55 FRD 107 Investment properties n/a

56 FRD 110 Cash flow statements 56

57 FRD 112C Defined benefit superannuation obligations 54

58 FRD 113 Investment in subsidiaries, jointly controlled entities and associates n/a

59 FRD 114A Financial instruments – general government entities and public non-financial corporations 65

60 FRD 115 Non-current physical assets – first time adoption n/a

61 FRD 119 Contributions by owners 25

62 FRD 119A Transfers through contributed capital 25

63 FRD 120G Accounting and reporting pronouncements applicable to the reporting period 36

64 FRD 121 Infrastructure assets n/a

PART 7 OF THE FINANCIAL MANAGEMENT ACT 1994 (FMA)

65 FMA 49 (a) Must contain such information as required by the Minister. 21

66 FMA 49 (b) Must be prepared in a manner and form approved by the Minister. 21

67 FMA 49 (c) Must present fairly the financial transactions of an institute during the financial year to which they relate. 21

68 FMA 49 (d) Must present fairly the financial position of an institute as at the end of the year. 21

69 FMA 49 (e) Must be certified by the Accountable Officer for an institute in the manner approved by the Minister. 21

Disclosure Index


70

ITEM NO.


PAGE NO.

COMPLIANCE WITH OTHER LEGISLATION AND SUBORDINATE INSTRUMENTS

70 Legislation The TAFE institute Annual Report must contain a statement that it complies with all relevant legislation and subordinate instruments, including, but not limited to, the following:

Education and Training Reform Act 2006 (ETRA)

TAFE institute constitution

Directions of the Minister for Higher Education and Skills (or predecessors)

TAFE institute Commercial Guidelines

TAFE institute Strategic Planning Guidelines

Public Administration Act 2004

Freedom of Information Act 1982

Building Act 1983

Protected Disclosure Act 2012

Victorian Industry Participation Policy Act 2003

14-15

71 ETRA

s 3.2.8

Statement about compulsory non-academic fees, subscriptions and charges payable in 2013. 15

PRESENTATION OF REPORTING AND PERFORMANCE INFORMATIONAudited Statements of Key Performance Measures (KPIs) must include an audited statement of performance for certain KPIs.

72 FRD 27B Reporting and performance should be presented using KPIs and a signed Performance Management Certificate should also be completed.

(The following 11 are the mandatory KPIs)

1. Participation of 15-24 year olds.

2. Participation of 25-64 year olds.

3. Module Load Completion Rate.

4. Student satisfaction.

5. Total Cost per Student Contact Hour (SCH).

6. Working Capital Ratio.

7. Net Operating Margin.

8. Fee for Service Revenue.

9. Revenue per EFT Staff.

10. Student Contact Hours (SCH).

11. Energy Consumption.

18

OVERSEAS OPERATIONS OF VICTORIAN TAFE INSTITUTES

73 PAEC and VAGO (June 2003 Special Review item 3.110)

• financial and other information on initiatives taken or strategies relating to the institute’s overseas operations.

• nature of strategic and operational risks for overseas operations;

• strategies established to manage such risks of overseas operations;

• performance measures and targets formulated for overseas operations;

• the extent to which expected outcomes for overseas operations have been achieved.

n/a

Disclosure Index


The Hon. Peter Hall, MLCMinister for Higher Education and Skills andMinister responsible for the Teaching Profession

24 February 2014

Dear Minister,


The Annual Report was approved by the Advance TAFE Board on 24 February 2014.

Yours sincerely,


Where to find us

Bairnsdale

Melbourne

Sale

Lakes Entrance








2013

1300

133 717advancetafe.edu.au

International callers +61 3 5152 0700

Interstate callers 03 5152 0700

PO Box 886 Bairnsdale Vic, 3875

ABN: 41 975 960 230

ANNUAL REPORT

‘Head To Head’ by 2013 Advance TAFE student Simon Glass - painted as part of his studies for Certificate II in Mumgu-dhal Tyama-tiyt
