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HOLMESGLEN INSTITUTE 2016 ANNUAL REPORTVocational and Higher Education

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Reproduced courtesy the artist and Murray White Room, Melbourne

Holmesglen Institute | 3

Report of Operations

04 Introduction

05 Board Chair’s Report

06 Chief Executive’s Report

07 Strategic Intent

07 Organisational Chart

08 Board

09 Controlled Entities

09 Executive

10 Highlights

15 Holmesglen Foundation

16 Financial Overview

17 Compliance

22 Workforce

24 Environmental Performance

Financial Report

29 Independent Auditor’s Report - Financial Report

33 Comprehensive Operating Statement

34 Balance Sheet

35 Statement of Changes in Equity

36 Cash Flow Statement

37 Notes to Financial Statements

95 Independent Auditor’s Report - Statement of Performance

98 Statement of Performance

100 Disclosure Index

HOLMESGLENANNUAL REPORT 2016 CONTENTS

4 | Annual Report 2016

INTRODUCTION

About HolmesglenHolmesglen’s mission is to provide accessible vocational and higher education programs to maximise student success and benefit society. The Institute is established under the Education and Training Reform Act 2006. From 1 January to 9 November 2016, the responsible Minister was the Honourable Steve Herbert MP, with the Honourable Gayle Tierney MP subsequently being appointed as the Minister for Training and Skills.

Holmesglen was officially opened in 1982 to provide a range of general technical and further education programs for the community and basic training for the building and construction trades. Today the Institute delivers a broad range of senior-secondary, vocational education and training, and higher education programs at its campuses, online and in workplaces and at partner institutions across Australia and overseas. Holmesglen has four campuses located across south-east Melbourne and the city and a Rural Learning

Centre in north-eastern Victoria. It serves Victorian communities and industry and in 2016 welcomed approximately 3,000 international students to study in Melbourne. Holmesglen also delivers education and training services in conjunction with its educational and industry partners in China, Mongolia, Indonesia and Qatar.

Operations in 2016In 2016, the Institute focussed on growing its domestic and international market, whilst continuing to expand and improve its educational programs and services. It actively extended its business development activities and formed new partnerships with education providers, industry groups and employers. Holmesglen also supported its students and Victorian communities and businesses through a range of initiatives funded through the Victorian Government’s Back to Work Fund and Community Service Fund.

On behalf of the Board and Institute we are pleased to present the 2016 Annual Report for Holmesglen Institute. This Report of Operations outlines the Institute’s activities, achievements and performance for the year and also presents the required compliance statements.

Peter LewinskyChairHolmesglen Institute22nd March, 2017

Mary FaraoneChief ExecutiveHolmesglen Institute22nd March, 2017


I am pleased to report that the Institute continues to perform well in a difficult market. The competitive pressures from private providers continues, but we are pleased to see both the Victorian and Commonwealth governments acting in relation to quality issues in the VET system. We are particularly appreciative of the support for the sector, in particular TAFEs, from the Victorian Government and the Minister for Training and Skills.

Our results clearly show that we have performed significantly better in 2016, compared to 2015, on a number of key indicators. Given the training market was still volatile and challenging in 2016, the Institute’s results are an endorsement of our current strategy and visions, and the commitment from our Chief Executive, Mary Faraone, and her team.

As a result of amendments to the Education and Training Reform Act 2006, and a subsequent change to the Institute’s Constitution, the Board composition changed significantly in 2016.

Retiring Directors as at 30 June 2016 included:• Ms Andrea Durrant• Mr Roger Leeming• Mr Neil Lucas, PSM

On behalf of the Board and the Institute, I extend my thanks to Andrea, Roger and Neil for their input and service on the Board. Roger was the Chair of the Building and Facilities Committee for a number of years and showed a keen interest in the Institute’s building program. Neil was an active member of both the Audit Committee and the Investment Committee and brought a strong governance perspective. Andrea was a member of the Investment Committee and the Higher Education Academic Committee and, whilst her period on the Board was short, she showed great enthusiasm for the Board and the Institute.

On 1 July a new Board was constituted and we welcomed six new Directors, including the Chief Executive, Mary Faraone, and a representative from the staff, Keri Bailey. Other new Directors were:• Mr Dean Cleland (commenced 5 August 2016)• Mr Jim Grant• Ms Christy Karamzalis• Ms Leonie Morgan

Six Directors who were on the Board prior to 30 June 2016 were reappointed either by the Minister or by co-option.

I thank all Directors – both new and re-appointed – for their interest in Holmesglen and their contributions to the Board’s activities. I am confident that the Board will continue to work positively for the best interests of the Institute, community and Victorian Government. I also extend my thanks to Mary Faraone, the executive and staff for the excellent work and achievements in 2016.

BOARD CHAIR’S REPORT PETER LEWINSKY


I am pleased to report that the Institute improved its performance across a number of key indicators compared to 2015. At the midway point in the current Strategic Plan 2015 – 2017, the Institute continues to prioritise activities relating to the five key themes underpinning our strategy – student and client focused; linked and engaged; responsive; ambitious and enterprising; and sustainable.

A key achievement in 2016 was receiving the Premier’s Award for International Education Provider of the Year, presented by Her Excellency the Honourable Linda Dessau AC, Governor of Victoria at Government House on 21 November 2016. The Institute also won the International Education Provider – TAFE award and our student, Freddy Mata Mendoza from Venezuela, won the International Student of the Year – VET award. The Institute is a pioneer in international education and is the largest TAFE provider for onshore international students in Australia. International education is a significant part of the Institute’s activities, positively contributing to the social fabric on campus.

We experienced a slight increase in Victorian Training Guarantee enrolments and a significant increase in higher education enrolments in 2016, compared to 2015. Other key achievements included:

• Module load completion rates increased to 87% for government subsidised students, up from 83% in 2015.• The Centre for Applied Research and Innovation was launched.• There was a 12% decrease in health and safety incidents from 2015.• Improved People Matter Survey results.• The Institute’s ICT Strategy 2017 – 2020 was approved by the Board for implementation in 2017.• A new student hub at the Moorabbin campus commenced construction.• The Holmesglen Private Hospital construction at the Moorabbin campus was completed.• Holmesglen at Eildon won gold in the RACV Victorian Tourism Awards – Business Event Venues category.• Marc Nichol won the Victorian VET Teacher of the Year at the Victorian Training Awards.

Financially the Institute has ended in a stronger position than 2014 and 2015, with positive EBITDA, EBIT and net operating result.

We are proud of our achievements in 2016 and thankful for the continued support of the Victorian Government and the Minister for Training and Skills, the Hon. Gayle Tierney MP, and previously the Hon. Steve Herbert MP.

I wish to pay tribute to the work of the Executive and Leadership Group and all the staff at the Institute who have contributed to the Institute’s success and results.

My thanks to the Board, and in particular the Chair, for the support and advice provided in 2016.

CHIEF EXECUTIVE’S REPORT MARY FARAONE


STRATEGIC INTENTOur visionIn 2017 Holmesglen will be a distinctive tertiary education provider recognised and respected as an influential leader in education and training offering an innovative curriculum approach – the Holmesglen Model.

The Institute will be noted for academic excellence, characterised by an uncompromising commitment to outstanding education and skills development, which enhances the social, professional and educational outcomes for graduates.

Holmesglen offers a broad range of programs from senior-secondary to master degrees and has specialist faculties in:• health and community wellbeing• construction technology• service skills.

The Institute’s programs are aligned to industry trends, community expectations and government policies. Holmesglen is a mature higher education provider and its expertise is recognised through its self-accrediting status, positioning the organisation as a new type of provider. The Institute is strongly engaged with industry and educational partners to drive innovation in delivery models that service individual students, local community, national and international clients.

Our enterprising culture supports our ability to diversify and grow our reach and respond quickly to market needs. Holmesglen is the key destination for international and domestic students.

The Institute is a strong and resilient workplace with loyal and committed staff. It is a financially strong and sustainable organisation underpinned by efficient corporate structures and practices.

ORGANISATIONAL CHART

Audit Committee

Asset and Infrastructure

Committee

Higher Education Academic

Committee

Remuneration Committee

Investment Committee

Mary FaraoneChief Executive

David Saunders

Executive Director Strategy and

Business Development

Enzo Spangher

Executive Director Services

Bruce Prescott

Executive DirectorTeaching and

Learning

Joanne James

Chief Financial Officer

Board

Board Committees and Executive team as at 31 December 2016

ObjectivesWe will strive to achieve our vision by being:• student and client focussed• responsive• linked and engaged• ambitious and enterprising• sustainable.

OUR VALUESEXCELLENCEENTERPRISESCHOLARSHIPINTEGRITYACCESS


BOARD

The governing body of Holmesglen Institute is the Board of Directors. The Board is ultimately responsible to the Victorian Government for the governance and management of the Institute. The powers, duties and composition of the Board are set out in legislation and the Institute’s Constitution. The Board is required to advance the objectives of the Institute and to operate in accordance with the economic and social objectives and public sector policy established by the Victorian Government.

As part of its duties, the Board reviews and approves the Institute’s strategic plan and statement of corporate intent annually to ensure that its strategies are relevant and in accordance with the external environment. In 2016, the Institute continued to implement its organisational renewal agenda with three key pillars of rethink, realign and refocus.

From 1 January to 30 June 2016, the Board comprised the following Directors:• Mr Peter Lewinsky (Chair)• Ms Ann Barker• Ms Karen Corry• Emeritus Professor Peter Darvall AO• Ms Andrea Durrant• Mr Roger Leeming• Mr Neil Lucas PSM• Mr Bruce Porter• Ms Catherine Walsh.

On 1 July 2016, the following Directors were appointed:• Mr Peter Lewinsky (Chair)• Ms Keri Bailey• Ms Ann Barker• Ms Karen Corry• Ms Mary Faraone• Mr Jim Grant• Ms Christy Karamzalis• Ms Leonie Morgan• Mr Bruce Porter• Ms Catherine Walsh.

On 5 August 2016, Emeritus Professor Peter Darvall AO and Mr Dean Cleland were appointed by co-option.

Board committeesFrom 1 January to 30 June 2016, the Board operated five committees:• Audit Committee - Chair, Mr Bruce Porter• Building and Facilities Committee - Chair,

Mr Roger Leeming• Higher Education Academic Committee - Chair,

Emeritus Professor Peter Darvall AO• Investment Committee - Chair, Mr Peter Lewinsky• Remuneration Committee - Chair, Ms Catherine Walsh.

The Board commencing on 1 July 2016, determined a new committee structure and appointed Directors as members. The Board committees currently comprise:

Asset and Infrastructure Committee - Chair, Ms Karen CorryThe Asset and Infrastructure Committee provides a monitoring overview for the Board of matters related to Institute capital facilities and infrastructure development, including ICT and major equipment items.The Committee also monitors the progress of major projects.

Audit Committee - Chair, Mr Bruce PorterThe Audit Committee is responsible for matters of accountability, risk management and internal control affecting the operations of the Institute. It also ensures the adequacy of the Institute’s financial reporting and financial management practices.

Higher Education Academic Committee - Chair, Emeritus Professor Peter Darvall AOThe Higher Education Academic Committee oversees all aspects of teaching and learning relating to higher education programs conducted at Holmesglen.

Investment Committee - Chair, Mr Bruce PorterThe Investment Committee oversees and monitors the investment of the Institute’s funds in accordance with the Institute’s investment policy.

Remuneration Committee - Chair, Ms Catherine Walsh The Remuneration Committee oversees the people-related activities at Holmesglen and ensures proper governance, compliance and capability so Holmesglen can deliver its strategic objectives.

Seated (L-R): Keri Bailey, Mary Farone, Peter Darvall, Peter Lewinsky (Chair), Karen Corry, Leonie MorganStanding (L-R): Dean Cleland, Bruce Porter, Jim Grant, Christy Karamzalis, Catherine Walsh, Ann Barker

Board Directors as at 31 December 2016


Holmesglen FoundationThe Holmesglen Foundation is a controlled entity of Holmesglen Institute, which operates through a Trust Deed between the Institute and Glenuc Pty Ltd (the Trustee). Glenuc Pty Ltd is also a fully-controlled entity of the Institute. Glenuc Pty Ltd is responsible for ensuring that the Foundation operates in accordance with its Trust Deed and that all governance and regulatory requirements are complied with. Directors of Glenuc Pty Ltd during 2016 were:• Mr Peter Lewinsky (Chair)• Mr John Dixon (retired 30 June 2016)• Mr James Grant (appointed 5 September 2016)• Ms Mary Faraone• Mr Bruce Porter.

Holmesglen International Training Services Pty LtdHolmesglen International Training Services Pty Ltd is a fully-owned subsidiary of Holmesglen Institute. In 2016 it provided tuition assurance guarantees to the Institute’s students entering into HELP loans and delivered training services to offshore clients. Directors of Holmesglen International Training Services Pty Ltd during 2016 were:• Mr David Duggan• Mr David Endean• Ms Mary Faraone.

CONTROLLED ENTITIES

EXECUTIVE

Ms Mary Faraone, Chief Executive Responsible for the effective and efficient management of the Institute, its strategic direction and the achievement of its business objectives.

Ms Joanne James, Chief Financial Officer Responsible for the management of the Institute’s corporate services, financial and human resources, and the development of strategies to optimise the provision and use of funds.

Mr Bruce Prescott, Executive Director, Teaching and LearningResponsible for the delivery of all educational programs at Holmesglen, higher education support, teaching and learning innovation and student support services.

Mr David Saunders, Executive Director, Strategy and Business Development Responsible for ensuring that Holmesglen’s growth agenda is achieved through its marketing, business development, international education operations, compliance and business improvement functions.

Mr Enzo Spangher, Executive Director, Services Responsible for effective delivery of core business services to ensure a sector-leading student experience and achievement of the Institute’s commercial objectives.

L-R: Bruce Prescott, Joanne James, Mary Faraone, Enzo Spangher and David Saunders

Executive team as at 31 December 2016


HIGHLIGHTSKEY INITIATIVES AND PROJECTSCommunity service initiativesHolmesglen successfully applied for funding under the TAFE Rescue Fund to deliver a range of services to students and continue to deliver programs in niche markets. Funded by the Victorian Government, the Community Service grants enabled Holmesglen to:• establish the Apprentice Support Centre, a

dedicated team of mentors to support trade apprentices overcome personal, financial, educational and employment related issues and remain engaged in their off-the-job training

• provide increased language, literacy and numeracy support to students, including establishing a walk-up support service co-located with the Institute libraries

• continue to provide educational programs and wrap-around services to students experiencing disadvantage and those with disabilities including residents of the Education First Youth Foyer and students studying at Holmesglen’s Vocational College and Department of Community and Transition Education

• provide increased student counselling services and establish a food-bank at each campus

• continue to deliver Certificate III programs within niche trade areas where Holmesglen is the only provider within the Victorian training system.

Back to Work projectsHolmesglen was funded to deliver three Back to Work projects, which saw the Institute:• design, develop and deliver a pilot program

to reskill retrenched and displaced electrical workers in new telecommunications and energy technologies

• deliver diploma, advanced diploma and cadetships in building surveying using new flexible delivery models and pathways for workers across Victoria

• work collaboratively with Chisholm Institute and the Brotherhood of St Laurence to develop and deliver Career Pilot - a new training program aimed at assisting unemployed young people with senior-secondary or equivalent VET qualifications to transition to employment or further study.

Holmesglen Private Hospital and Moorabbin campus student hub2016 saw the finalisation of building works at the former site of Hemisphere Conference Centre and Hotel to create the Holmesglen Private Hospital. The

development between Healthscope and the Institute will become the focal point of the Holmesglen Health Precinct, linking clinical practice, teaching and research. Alongside the hospital development, Holmesglen established a new student hub on campus. The Moorabbin hub is being funded by the Victorian Government with an allocation from the TAFE Rescue Fund.

Centre for Applied Research and InnovationHolmesglen’s Centre for Applied Research and Innovation was launched in 2016 with a view to build upon the Institute’s past successes and to further expand applied research activity within its teaching faculties. The Centre provides services ranging from strategy, partnerships and stakeholder relationships, to research ethics and integrity, and the sourcing of funding for current and proposed projects.

The Centre is an important complement to the Institute’s teaching profile and a critical driver of partnerships and collaborations on research related projects with industry, professional bodies, government, and not-for-profit organisations. It will work closely with employers, industry and professional bodies, government, and local communities across a range of research related projects, and in the trialling of industry innovations. A key initiative for 2016 has been the forging of international collaborations and networking opportunities with other research based organisations in countries such as Canada and the United Kingdom. It was against this background that Holmesglen hosted visits from a number of leading Canadian researchers throughout the year.

Call ConnectAs part of a broader initiative to improve the enrolment experience of prospective and current students, Holmesglen established its Call Connect centre. Call Connect is located at the Moorabbin campus, but is the first point of email and telephone contact for students interested in studying at Holmesglen. It partners with the teaching faculties to provide timely and relevant information about Holmesglen’s programs and supports students to apply and enrol at the Institute.

Holmesglen Private Hospital, Moorabbin campus


HIGHLIGHTSAWARDS AND ACHIEVEMENTSAustralian Event AwardsHolmesglen’s commitment to running respected events courses was recognised this year, with the Institute winning the Best Education or Training Program at the Australian Event Awards.

RACV Energy BreakthroughHolmesglen students and staff were honoured with four awards at the 2016 RACV Energy Breakthrough. The Institute competed against approximately 300 schools and managed to complete up to 830 kms in a 24-hour period. Holmesglen entered a team comprised of seven VCAL students from the Waverley and Moorabbin campuses, with three hospitality students also helping at the event. The awards won included First Place – Single Power Source (OPEN) Trial, EEV/SPS Design and Construction Award, Single Power Source (OPEN) Overall Award, and the 2016 RACV Energy Breakthrough Innovation Award.

Victorian International Education Awards - International Student of the Year - Vocational Education and Training (VET)Holmesglen student, Freddy Mata Mendoza was presented with the International Student of the Year – Vocational Education and Training honour at the 2016 Victorian International Education Awards. After coming to Melbourne from Venezuela, Freddy studied the Diploma of Furniture Design and Technology. Freddy was also the recipient of the Outstanding Certificate Student honour at the 2016 Holmesglen Awards.

Victorian International Education AwardsHolmesglen’s success in international education was celebrated at the 2016 Victorian International Education Awards. The Institute was honoured with both the TAFE provider excellence award and the Premier’s Award for International Education Provider of the Year – reflecting Holmesglen’s outstanding achievements and excellence in international education across all sectors.

2016 RACV Victorian Tourism AwardsThe continued passion of the Holmesglen at Eildon team was recognised at the 2016 RACV Victorian Tourism Awards in November. Holmesglen at Eildon was presented with the Business Event Venues Award at the ceremony. The recognition follows previous regard for the staff and venue. In the first year of operation as a commercial tourism venue, Holmesglen at Eildon was awarded Bronze in the 2015 New Tourism Business category.

(L - R) David Saunders (Executive Director - International Education and Business Development), Michelle Fernandez (Director - International Centre), Mary Faraone (Holmesglen Chief Executive), Freddy Mata Mendoza (International Student of the Year - Vocational Education & Training (VET), and Peter Lewinsky (Holmesglen Chair - Board of Directors).

Holmesglen at Eildon Team


HIGHLIGHTSAWARDS AND ACHIEVEMENTSVictorian Training Awards - Victorian Teacher/Trainer of the YearHolmesglen events teacher Marc Nichol was awarded the Victorian Teacher/Trainer of the Year accolade, as part of the 2016 Victorian Training Awards. As a winner, Marc shared in more than $100,000 in professional development grants, which were afforded to the award recipients and went on to represent Victoria at the Australian Training Awards.

Victoria Police Multicultural Media Award and Victoria Police Divisional Commendation AwardHolmesglen’s commitment to maintaining a safe environment for international students was acknowledged at two Victoria Police ceremonies in 2016. Holmesglen Events Coordinator Stephenie Garac and Victoria Police Sergeant Ric Anderson were recognised with a Victoria Police Multicultural Media Award and a Victoria Police Divisional Commendation Award.

2016 Shared Tables Thierry Marx Career Development AwardHolmesglen apprentice chef Simon Barton travelled to one of Europe’s culinary meccas to complete a two-week work placement at the Mandarin Oriental Hotel in Paris as the recipient of the 2016 Shared Tables Thierry Marx Career Development Award. Simon was awarded first place in the highly-regarded Victorian based competition, which judges entrants on their technical cooking abilities.

Australian Commercial Radio AwardsHolmesglen graduate and current Nova 100 (Chrissie, Sam & Browny) Assistant Producer, Jack Charles was rewarded with the Best Newcomer (Off-Air) honour at the 2016 ACRAs. Jack studied screen and media: radio & TV while at Holmesglen.

Holmesglen graduate, current teacher and Breakfast Producer for Smooth FM’s More Music Breakfast Show, Lauren Saylor was part of the team that won Best Music Special (Metropolitan) at the 2016 ACRAs.

AEN Annual Awards – Apprentice of the Year Holmesglen Certificate III in Upholstery student Greg Hogan was recognised with this significant industry accolade at the AEN National Awards.

Disney Cultural Exchange ProgramThree tourism students from the Moorabbin campus, and one from Waverley, will fly to Florida’s Disney World in January 2017 to begin their training and work placements, after being accepted into the Disney Cultural Exchange Program. Student Patrick Mason-Jones will work as a lifeguard at one of Disney’s water parks, while Natalie Fisher, Sian Beli-Ruston, and Meaghan Horkings will work in merchandise throughout the various park locations.

WorldSkills Australia – Landscape Construction (Bronze)Representing the Victorian team, Holmesglen apprentice James Liley, together with his teammate Matthew Higgins, won bronze in the landscape construction competition. The award follows James’ gold medal in last year’s regional event.

Wildflowers Australia Floristry Competition - National Category 2 (First and Second Prize) and State Division Category 1 (First Prize)Holmesglen students received esteemed prizes at the 2016 Wildflowers Australia competition. Floristry students Leteisha Knecht, Katie Effern and Lynette Burton were each recognised for their floral arrangements, which invited students to interpret Olympic themes. Leteisha was awarded first place in Category 2 of the national competition, with her Holmesglen peer Katie placing second. Additionally, Lynette was announced as the winner in the state category.

2016 Master Builders Apprentice Awards - Joinery Apprentice of the YearTim Lockhart was named Joinery Apprentice of the Year at the 2016 Master Builders Awards. The accolade followed awards he received while with Holmesglen. Tim won the Holmesglen Best Apprentice (Joinery) in his first, second and third year.

Home Design Magazine and eussen Living Student Design Awards – People’s Choice AwardAlexandra Legg was included in this year’s Home Design magazine and eussen Living Student Design Awards for her creative project, Barangaroo House. Accordingly, the interior design student received a ‘People’s Choice’ honour. Since the win, Alexandra was approached by IKEA to do the design work for a community project at Brandon Park Children’s Centre and, also as part of her mentorship prize, she flew to Sydney to work on the Renovate & Build Sydney Home Show.

Australian Contemporary Emerging Design Awards – People’s Choice Freddy Mata Mendoza and Carolina Trombelli received a People’s Choice accolade at the 2016 Australian Contemporary Emerging Design Awards. Their chair design went on to feature as part of the Australian Pavilion at China’s International Furniture Fair, held in Shanghai in September. Additionally, the duo also won the Green Medallion for a separate design, which was awarded by the Australian Furniture Association.


Medela Symposium Design Competition – First PlaceHolmesglen’s Panhavuth Kret was awarded first place in the Medela Symposium Design Competition. The competition invited students to break the negative stigma attached with breastfeeding when creating their poster design. The win marked further recognition for Panhavuth after another of his designs – a logo – was chosen for the Channel 31 series, What’s Wrong With U?

NECA Apprentice Awards - State runner-up apprentice (commercial/domestic)Holmesglen apprentice Dale Horne was recognised for his contributions to the industry following the announcement of NECA Apprentice Award winners in 2016. Held annually, the awards are fitting acknowledgment for those making a positive impact within the electrical and communications contracting industry. Accordingly, Dale received the NECA state runner-up apprentice award in the ‘commercial/domestic’ field.

Metropolitan Traffic Education Centre (METEC) Young Driver of the Year Awards – 1st PlaceHamish Barlett, a Community & Transitional Education student, won first place after competing in a ‘drive off’ against ten other students. The competition was supported by METEC and Charlton Driving School and was open to all schools.

2016 Holmesglen Awards FestivalHolmesglen celebrates the achievements of all its students in the Institute’s annual awards festival. The festival culminates at the Awards Dinner, where excellence within our learning community is formally recognised. The 2016 Awards Festival acknowledged the outstanding efforts of the following Holmesglen students and staff (refer Table 1).

HIGHLIGHTSAWARDS AND ACHIEVEMENTS

Student Awards Winner Course

Outstanding VCAL Student Astrid Boyd-Lingard Victorian Certificate of Applied Learning

Outstanding Certificate Student Freddy Mata Mendoza Certificate IV Furniture Design & Technology

Outstanding Apprentice Jason Cramer Certificate III in Electrotechnology Electrician

Outstanding Diploma Student Nicola Muston Diploma of Horticulture

Outstanding International Student Simone Giurastante Bachelor of Nursing

Outstanding Higher Education Student Rachael Collier Bachelor of Early Childhood Education

Encouragement Award

Xia Ding Certificate III Spoken and Written English

Alessandro Gozali VCAL Foundation

Ben Fergusson VCAL Foundation and Certificate I in Work Education

Staff Awards Winner Area

Excellence in Customer Service Dominic Thorsen Information Office

Innovation and ExcellenceBradley Wilman and Suzie Zarris

AHSS - Drug and Alcohol Program

Botanix Plant Supply were also recognised for their contribution to vocational and higher education at Holmesglen in 2016.

Table 1: 2016 Holmesglen Awards Festival winners


HIGHLIGHTSCOMMERCIAL ACTIVITIES

HIGHLIGHTSOVERSEAS OPERATIONS

Australian Defence ForceNow in its fourth year, Holmesglen’s contract with the Australian Defence Force (ADF) involves the delivery of multiple programs in cookery and hospitality, along with the Diploma of Quality Auditing to employees from the three defence services. The service operations program was also delivered to Navy personnel. In 2016, 310 ADF personnel undertook their training at Holmesglen’s Waverley campus.

Le Cordon Bleu2016 was the second year of the partnership between Le Cordon Bleu and Holmesglen. The Diplôme de Cuisine and Diplôme de Pâtisserie were delivered at the Moorabbin campus to 210 students. Le Cordon

Bleu has earned its reputation as a global leader in cuisine, patisserie, hospitality and gastronomy training.

FuturetechIn October 2015, Holmesglen and the Victorian Branch of the Electrical Trades Union opened a new collaborative venture focussing on the training needs of electrical workers. During 2016, 518 students attended a range of OH&S and electrical and data communications courses.

SEDAThe Institute entered into an agreement with the SEDA Group for delivery of training and assessment services for sport development.

Holmesglen’s overseas operations in 2016 included delivery of Australian qualifications in China, Qatar and Mongolia and non-accredited courses in Indonesia. Holmesglen staff have also provided these projects with expert consultancy services in the design, development and delivery of VET programs. In addition, Holmesglen staff also visited over 20 countries during the year to support its international student recruitment activities and develop articulation agreements with new and existing partner institutions.

Transnational partnershipsHolmesglen has four partner institutes in China for the delivery of Australian qualifications and articulation agreements with a further two institutes. Overall in 2016, 528 Chinese students were registered across the partner providers located in Wuhan, Changsha, Ningbo and Jinan. A new partnership established in 2016 in Jiangsu Province will see the delivery of specialist Australian early childhood education programs by Institute staff.

In 2015, Holmesglen commenced transitioning its transnational partnerships to a pathways model, which was largely completed in 2016. Holmesglen staff now provide teaching services in China, focussing on English language and intensive preparation/familiarisation programs to ensure students can successfully transfer to studying onshore at a Holmesglen campus, with appropriate levels of English language proficiency and levels of credit.

International projectsHolmesglen’s contract with Rio Tinto for training services at the Oyu Tolgoi mine site in Mongolia was extended in 2015 for a further two years. During 2016, the focus shifted from in-country delivery of

engineering qualifications by Holmesglen staff to delivery by local trainers and assessors with oversight by Holmesglen. This model has been considered very successful by the client and it is hoped that it will be used as a blueprint for the company’s other international operations.

In 2016, Holmesglen’s extended contract with the Qatar Central Bank saw the opening of a specialist girls’ school for the business and finance sector. The Holmesglen project team in Qatar oversee the delivery of services in teacher training and curriculum support.

The Holmesglen Language Centre established a satellite operation in partnership with Universitas Muhammadiyah Tangerang, Indonesia to provide practical English tuition for the university’s students. During 2016, 2,630 students attended a 10 week course, delivered by local and international teachers.

Risk management and performance monitoring of overseas operationsHolmesglen’s Risk Management Plan provides the policy framework to identify and manage all strategic and operational risks, including those inherent in its overseas operations. Overseas activities also contribute to the achievement of key financial and strategic performance targets, including the growth of onshore international student enrolments and revenue from commercial activities. These are monitored by the executive and Board through the Institute’s performance and budget reporting mechanisms. Positive results for relevant measures were recorded in 2016, refer to the Statement of Performance section of this report for further detail.


HOLMESGLEN FOUNDATION

The Holmesglen Foundation was established in December 2007. The Foundation supports the Institute’s commitment to provide accessible education and skills development to all students, particularly those requiring support to undertake training and education at the Institute.

To support its vision, the Foundation’s objectives are to:• provide facilities for or services for study, research,

education and training• provide funding to undertake research, course

development, and student support services• seek or encourage philanthropic contributions from

the public and• provide funding for scholarships, academic

education, training participation and sabbaticals.

Distribution of grantsFor the year ending 31st December 2016, the Foundation made a distribution of $966,644 to the Institute. During 2016 the Institute awarded grants and scholarships and provided student support services from distributions received from the Foundation to assist students to commence and remain engaged in a broad range of courses and programs.


FINANCIAL OVERVIEW

For the year ended 31 December 2016, the Institute and its controlled entities achieved a net result surplus from transactions of $10.375 million (2015: $1.467 million) compared to a budgeted net result of $7.435 million. Taking other economic flows into account, the Institute achieved a consolidated net result of $15.975 million (2015: $15.375 million).

Comprehensive Income StatementThe Institute and its controlled entities achieved an improved net result for 2016 against budget and compared to the prior year due to the following factors:

• an 18% increase in state government contestable training revenue• an 11% increase in international education fee for service revenue• government contributions through the TAFE Rescue Fund for community service grants, including the

provision of apprenticeship and learner support and training delivery to thin and niche markets in areas of skills demand

• government capital contributions for the Institute’s new Student Hub located at its Moorabbin campus• a government contribution for specialist teaching equipment and additional support funding• a reduction in expenditure as a result of continuing cost control and expenditure management strategies

across Institute operations in line with the reduction in fee for service delivery experienced during the year.

Table 2: Five year comprehensive operating statement – consolidated (2012 – 2016)

Year ending 31st December 2016$’000

2015$’000

2014$’000

2013$’000

2012$’000

Government Contributions – Operating – State Government Contestable

42,567 36,072 39,904 64,134 87,824

Government Contributions –Operating - Other 10,763 16,757 5,443 7,667 11,671

Government Contributions - Capital 5,000 1,000 - 1,051 2,067

Sale of Goods and Services 80,836 88,098 92,011 77,352 60,121

Other Income 14,067 13,617 12,880 11,916 10,201

Total Income from Transactions 153,233 155,544 150,238 162,120 171,884

Total Expenses from Transactions (Excluding Depreciation and Interest Expense)

132,843 143,342 151,913 154,606 155,488

Earnings Before Interest Expense,Depreciation and Amortisation (EBITDA)

20,390 12,202 (1,675) 7,514 16,396

Depreciation and Amortisation 10,015 9,742 11,010 11,432 10,552

Interest Expense - 993 1,076 1,164 1,232

Net Result from Transactions 10,375 1,467 (13,761) (5,082) 4,612

Other Economic Flows included in Net Result 5,600 13,908 1,896 (1,721) 4,583

Net Result 15,975 15,375 (11,865) (6,803) 9,195

Balance SheetAt 31st December 2016, the Institute’s net worth continued to improve, with consolidated net assets and net worth increasing by 4.4% to $403.509 million (2015: 386.295 million). This improvement was due to the combined impact of the favourable trading results for the year and the revaluation gains attributable to the Institute’s investment properties.

Table 3: Five year balance sheet – consolidated (2012 – 2016)

Year ending 31st December 2016$’000

2015$’000

2014$’000

2013$’000

2012$’000

Assets 450,069 429,554 420,282 429,389 435,450

Liabilities 46,560 43,259 52,587 50,594 53,787

NET ASSETS 403,509 386,295 367,695 378,795 381,683

Accumulated Surplus 134,885 118,910 103,535 115,400 122,203

Reserves 145,817 144,578 141,353 140,588 136,653

Contributed Capital 122,807 122,807 122,807 122,807 122,807

NET WORTH 403,509 386,295 367,695 378,795 381,663


COMPLIANCE

• Education and Training Reform Act 2006• Constitution of Holmesglen Institute • Directions of the Minister for Training and Skills (or

predecessors)• TAFE institute Commercial Guidelines• TAFE institute Strategic Planning Guidelines

• Public Administration Act 2004• Financial Management Act 1994• Freedom of Information Act 1982• Building Act 1993• Protected Disclosure Act 2012• Victorian Industry Participation Policy Act 2003

Public Administration Act 2004Institute employees are employed under Part 4 of the Public Administration Act 2004. Data on headcount and the number of full time equivalents, separated by gender is shown under Workforce Data. Further details on Institute staff are also provided in the annual Workforce Analysis and Comparison Application, which is provided to the Victorian Public Sector Commission to assist them with policy and planning.

Freedom of Information Act 1982The Freedom of Information Act 1982 allows the public a right of access to documents held by the Institute. Requests for access to records should be directed to Ms Patricia Farnes, Freedom of Information Officer. Applicants are required by the Act to request access to documents in writing. No form of application is specified. A letter which clearly describes the documents(s) sought is sufficient. The letter should:

• specify that the application is a request made under the Freedom of Information Act 1982 and should not form part of a letter on another subject

• include the applicant’s name, address and telephone number where applicant can be contacted during business hours

• detail the documents(s) requested• specify the form of access required, for example copies of documents, inspection of files or other format.

Charges for access to information are in accordance with the Freedom of Information (Access Charges) Regulations 2004. Holmesglen received two applications for information under the Freedom of Information Act 1982 during the year ended 31 December 2016

Building Act 1993Holmesglen holds all building related plans and documentation for building extensions and building approvals lodged for new buildings by certified building surveyors. On completion of construction, Holmesglen has obtained certificates of occupancy and practical completion certificates from the relevant architects, building surveyors and authorities. All building certificates are kept in a database and all hardcopies are located in a fire rated archive. All building consultants and builders who are engaged by Holmesglen hold current registration as building practitioners and have current insurance cover.

Holmesglen considers that all buildings across all campuses currently conform to the building regulations that existed at the time of construction of the respective buildings. The Essential Safety Measures are recorded and reported on by the Hendry Group Pty Ltd. Holmesglen provides a copy of the current Essential Safety Measures for display within all buildings. All new buildings constructed since the promulgation of the Building Act 1993 (including subsequent amendments) comply with the relevant standards.

Holmesglen has processes in place to ensure that any alterations or improvements to buildings meet the necessary standards, ensure that they are safe and fit for purpose and comply with the updated disability code. Holmesglen engages the services of licenced tradespeople such electricians and plumbers who provide the required certificates of compliance, which are stored in a fire rated archive.

Holmesglen Institute complies with all relevant legislation and subordinate instruments including, but not limited to, the following:


Table 4: Building Act 1993 compliance (2014 – 2016)

2014 2015 2016

Building works

Building works certified for approval 1 2 4

Building works in progress subject to mandatory inspections 1 2 4

New certificate of occupancy issued - 3 -

Essential safety measures

All buildings on each campus - owned

All buildings on each campus/site - leased

Maintenance

Combination in-house and external specialist contractors

Lift contract – comprehensive/performance-based

Mechanical services contract - performance-based

Mechanical services/BAS contract - performance-based

Waste services contract - performance-based

Cleaning services contract - performance-based

Other maintenance agreements include those for heating, ventilation, air-conditioning and cooling, catering equipment, hygiene, pest control, industrial cleaning, refrigeration, vehicle fleet maintenance, backflow prevention, trade waste, electrical, plumbing, signage, car parks, gardening services and arborist.

Protected Disclosure Act 2012The Protected Disclosure Act 2012 encourages and assists people to make disclosures of improper conduct by public officers and public bodies. The Act provides protection to people who make disclosures in accordance with the Act. It also establishes a system for the matters disclosed to be investigated and rectifying action taken.

Holmesglen does not tolerate improper conduct by employees, nor the taking of reprisals against those who come forward to disclose such conduct. The Institute has policies and procedures in place which promote and facilitate the disclosure of improper conduct to the Independent Broad-based Anti-Corruption Commission (IBAC).

A Rule for Protected Disclosure was developed in 2013. It establishes a system for the protection of persons who make a protected disclosure under the Act from detrimental action by officers, students, employees and contractors of Holmesglen in accordance with section 58 (5) of the Act and ensures that all other requirements of the Act are met. The Rule is available on the Holmesglen Management System.

Officers, students, employees and contractors of Holmesglen, as well as members of the public, may make a disclosure of improper conduct or detrimental action under the Act to IBAC. IBAC can be contacted at:

Level 1, North Tower 459 Collins Street Melbourne, VIC 3000

Holmesglen’s Protected Disclosure Co-ordinator cannot receive disclosures (they must be made directly to IBAC), but is responsible for co-ordinating responses to the Commission, the Victorian Inspectorate or the Ombudsman. They are also responsible for recording any reported detrimental action against a discloser once notice is received.

Carers Recognition Act 2012Holmesglen has reviewed the application and operation of the Carers Recognition Act and ensured that the Institute meets the applicable obligations of the Carers Recognition Act 2012.

Victorian Industry Participation Policy Act 2003Holmesglen has entered into an agreement with the State Government of Victoria and Total Energy Solutions Pty Ltd for improvements in the operation and maintenance of equipment in order to achieve reductions in energy consumption and water consumption, and cost savings at the premises. Under the terms of the agreement, the Department of Innovation, Industry and Regional Development will be responsible for monitoring compliance with VIPP from time to time.


Holmesglen also commenced one construction contract during the year, totalling $5,306,324 for which the VIPP applied (see Table 5). Benefits to the Victorian economy include training and skills development for apprentices. The Institute did not enter into any other construction or other contract to which VIPP applied.

Table 5: Commitment by contractors under the VIPP

Project Contract Awarded

Contract Value (ex GST)

Metropolitan/ Regional

Overall value of local content of total contract

Number of FTE jobs Number of apprenticeships / trainees

Created Retained Created Retained

Moorabbin Campus RedevelopmentStage 2

7 March 2016

$5,306,324 Metropolitan 84.7% 0 15 0 6

National Competition PolicyHolmesglen continued to comply with the principles of the National Competition Policy. ‘Competitive Neutrality: A Statement of Victorian Government Policy’, ‘Victorian Government Timetable for the Review of Legislative Restrictions on Competition’ and any subsequent reforms.

The Institute fulfilled its obligations and met its wider responsibilities to the community by applying competitive neutrality in the public interest.

Victorian Public Sector Travel PrinciplesHolmesglen has in place policies and procedures in relation to domestic and international travel to ensure that the Institute is compliant with the Victorian Public Sector Travel Principles.

Fees and charges

Statement on compulsory non-academic fees, subscriptions and charges (Higher Education) Holmesglen charges student services and amenities fees strictly in accordance with the Higher Education Support Act 2003 (the Act) and the Administration Guidelines made under the Act. Revenue from the fee is spent strictly in accordance with the Act and for the provision of services and amenities as specified in subsection 19-38(4) of the Act.

Table 6: Statement of income and expenditure for the year ended 31 December (2014 – 2015)

2014($’000)

2015($’000)

2016($’000)

Student services and amenities fees ($’000)

Unspent / (overspent) revenue from previous period 44 88 130

SA-HELP revenue earned 25 29 35

Student services fees direct from students 143 141 135

Total revenue expendable in period 212 258 300

Student services expenses during period (124) (128) (267)

Unspent / (overspent) student services revenue 88 130 33


Statement on compulsory non-academic fees, subscriptions and charges (VET)Holmesglen charges a range of fees for programs and services offered. Due to changes in Victorian Government policy in relation to student tuition fees, fees charged vary according to individual programs. Minimum/concession fees were set at 20 per cent of the hourly tuition fee rate in accordance with the Victorian Training Guarantee 2016 Guidelines about Fees. Class materials and ancillaries fees were charged at different levels based on programs.

ConcessionsConcession fees apply to individuals enrolling in a Certificate I to IV course with a valid Commonwealth Health Care Card, Pensioner Card or Veteran’s Gold Card. Concessions also apply to the cardholder’s dependent spouse or child. In addition, students who self-identify as Aboriginal and/or Torres Strait Islander are entitled to concession fees for all course enrolments, including diploma and advanced diploma level courses.

ExemptionsTuition fee waivers/exemptions under the Victorian Training Guarantee were made available in accordance with the Victorian Training Guarantee 2016 Guidelines about Fees to individuals:• from the Judy Lazarus Transition Centre (as a prisoner within the meaning of the Corrections Act 1986)• required to undertake a course pursuant to a community based order under the Children, Youth and

Families Act 2005• with a Young People Transitioning from Care Initiative referral.

ConsultanciesIn 2016, there were four consultancies where the total fees payable were $10,000 or greater. The total expenditure incurred during 2016 in relation to these consultancies was $84,150. The following table constitutes compliance with the requirement to make this information publicly available.

Table 7: Details of individual consultancies valued at $10,000 or greater (2016)

Consultant Summary of project Fee ($) Future expenditure

WS Group Review and consultation 22,600 Nil

McDuling Consulting Asset Management Plan 12,000 Nil

Shine Wing Aged care project 15,000 Nil

Biruu Pty Ltd Funding submissions and business case 34,550 Nil

Total 84,150 Nil

Note: Figures reported exclude GST

In 2016, there were two consultancies where the total fees payable to the consultants were less than $10,000. The total expenditure incurred during 2016 in relation to these consultancies was $2,038.00.

Information and Communication Technology expenditureFor the 2016 reporting period, the Institute had a total expenditure of $7.5 million, with the details shown below.

Table 8: ICT expenditure (2016)

Business as Usual(BAU) ICT expenditure

Non-Business as Usual (non-BAU) ICT expenditure

Operational expenditure

Capital expenditure

$7.5 million Nil $6.0 million $1.5 million

Note: Total non-BAU expenditure = operational expenditure and capital expenditure


Government advertising expenditure

Table 9: Details of government advertising expenditure for campaigns with a media spend of $100,000 or greater (2016)

Name of campaign

Summary Start / end date

Advertising (media)

expenditure ($ ex GST)

Creative and campaign

development expenditure($ ex GST)

Research and

evaluation expenditure ($ ex GST)

Print and collateral

expenditure($ ex GST)

Other campaign

expenditure($ ex GST)

2016 New Year recruitment campaign

Learn More Do More recruitment campaign executed across strategic outdoor locations, transit and radio audiences, including radio and digital for Open Day.

Jan - Feb 2016 $140,000 Nil

Nil (in house)

0 0

Mid-year recruitment campaign


May - July 2016

$135,00Nil

(in house)

$23,000(print and

install) 0

2017 New Year recruitment campaign


Oct - Dec 2016

$248,000 $52,000Nil

(in house)

$55,000(print and

install) $7,855

Major Commercial ActivitiesDuring 2016, Holmesglen Institute did not undertake any major commercial activities in accordance with the Commercial Guidelines – TAFE Institutes.

Additional information available on requestConsistent with the requirements of the Financial Management Act 1994 and subject to the provision of the Freedom of Information Act 1982, Holmesglen Institute has prepared material on the following items, which are available on request:• statement that declarations of pecuniary interests have been duly completed by all relevant officers;• details of shares held by a senior officer as nominee or held beneficially in a statutory authority or subsidiary;• details of changes in prices, fees, charges, rates and levies charged by the entity;• details of publications produced by Holmesglen Institute about itself and how these can be obtained;• details of any major external reviews carried out by the entity;• details of major research and development activities undertaken by Holmesglen Institute;• details of overseas visits undertaken, including a summary of the objectives and outcomes of each visit;• details of major promotional public relations and marketing activities by Holmesglen Institute to develop

community awareness of the Institute and its services;• details of assessments and measures undertaken to improve the occupational health and safety of employees;• general statement on industrial relations within the entity and details of time lost through industrial accidents and

disputes;• list of major committees sponsored by Holmesglen Institute and the purposes of each committee and the extent to

which their purposes have been achieved; and• details of all consultancies and contractors including: consultants/contractors engaged, services provided, and

expenditure committed to for each engagement.

Risk attestationI, Mary Faraone, Chief Executive, on behalf of the Board of Holmesglen Institute, certify that Holmesglen Institute has complied with the mandatory requirements of the Victorian Government Risk Management Framework under Direction 4.5.5 – Risk management framework and processes of the Standing Directions of the Minister for Finance. The Audit Committee verifies this assurance.

Mary FaraoneChief Executive and Director22nd March, 2017


WORKFORCE

Occupational health and safetyHolmesglen is committed, as far as practicable, to providing a safe and healthy environment for its employees, students and visitors. Everyone is responsible for their own safety and the safety of others. In 2016 Holmesglen successfully maintained its certification to the Standards for AS/NZS 4801 Safety Management Systems across all campuses. Faculties and departments are assisted by the Human Resources Occupational Health and Safety (OHS) Advisory Team to fulfil their regulatory OHS and WorkCover obligations.

On commencement and biennially thereafter, all Holmesglen employees are required to complete a suite of mandatory compliance modules on the HR learning management system. The following modules are available in the OHS catalogue of the system:

• Occupational Health and Safety Fundamentals• Bullying and Harassment for Employees• Bullying and Harassment for Managers and Supervisors• Hazardous Substances and Dangerous Good Awareness• Manual Tasks for Workers• OHS Responsibilities for Managers and Supervisors.

OHS consultative frameworkHolmesglen employees are represented by elected and trained Health and Safety Representatives, who work with their managers to identify and resolve safety issues. Across the Institute, there are 36 designated work groups.

An OHS Committee meets bi-monthly to share information and to ensure any safety issues are addressed. The committee consists of an equal number of employer and employee representatives. Employee committee members are elected from the pool of Health and Safety Representatives, however all representatives are encouraged to attend the meetings. Minutes of the meetings are displayed on safety notice boards across the Institute and are available on the staff intranet. Safety is an agenda item at all Institute meetings.

Staff Incident statistics

Table 10: Staff Incident statistics (2014 – 2016)

2014 2015 2016

Staff hazard or injury reports 80 76 67

Staff hazard or incident reports per 100 full-time equivalent (FTE) staff 7.7 8.0 6.4

Note: FTE is the average FTE for the reporting year

Workers compensation and injury managementIn 2016, lost time incidents were associated with, knee, ankle, back injuries and post-traumatic stress disorder.

Table 11: Lost Time Incidents (2014 – 2016)

2014 2015 2016

Number of lost time incidents 6 4 6

Lost time claims (standard) per 100 FTE 0.58 0.42 0.57

Note: FTE is the average FTE for the reporting year

Average claim costsThe significant cost increase in 2015/2016 was due to claims for post-traumatic stress disorder and injuries requiring surgery.

Table 12: Claim costs (2014 – 2016)

2014/15 2015/16 2016/2017 YTD

Average estimate $2,617 $121,708 $7,054

Average paid $5,051 $25,466 $2,002

Note: Costs provided by Xchanging Integrated Services.


Workforce dataHolmesglen reports workforce data consistent with the Performance and Accountability Framework and the method used to report quarterly full-time equivalent (FTE) staff numbers to the Department of Education and Training. This ensures full-time, part-time and casual employees are accounted for in the data and that calculations of FTE are consistent.

Table 13: Staff FTE (2015 – 2016)

Full Time Part Time Casual

Ongoing Fixed Term Ongoing Fixed Term Teacher Other

2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016

PACCT Staff 124.0 142.0 158.0 138.0 31.4 39.5 36.6 31.1 NA NA 31.5 28.2

Executive 17.0 18.0 0.0 0.0 0.0 0.0 0.0 0.0 NA NA 0.0 0.0

Other 3.0 3.0 11.0 7.0 0.2 0.7 1.2 0.6 NA NA 12.4 11.9

Teacher 133.0 157.0 161.0 129.0 39.2 46.0 38.8 36.5 215.6 255.2 NA NA

FTE figures rounded to one decimal place

Table 14: Active staff as at the last full pay period in December (2015 – 2016)

2015 2016

Ongoing Fixed Term Casual Ongoing Fixed Term Casual

Headcount FTE FTE FTE Headcount FTE FTE FTE

Gender

Male 152 145.0 166.5 127.7 175 168.1 140.9 153.4

Female 238 202.8 240.1 131.8 277 238.1 201.3 141.9

Age

Under 25 0 0.0 6.8 5.6 0 0.0 10.0 4.4

25 - 34 24 23.2 73.7 32.1 29 27.3 71.4 32.0

35 - 44 72 60.2 101.3 60.0 86 74.5 78.5 68.7

45 - 54 123 109.2 127.8 74.0 146 132.7 100.6 85.4

55 - 64 149 138.4 85.5 64.8 162 148.1 71.4 80.1

over 64 22 16.7 11.6 23.2 29 23.6 10.3 24.7

FTE figures rounded to one decimal placeNote: Employees have been correctly classified in the workforce data collections.

Workforce inclusionSection 8 of the Public Administration Act 2004 requires the Institute to establish processes that ensures:

• employment decisions are based on merit• employees are treated fairly and reasonably• equal employment opportunity is provided• employees have a reasonable avenue of redress against unfair or unreasonable treatment.


In 2016, Holmesglen adhered to these principles through taking the following actions.

Table 15: Actions taken to ensure compliance with the employment principles Public Administration Act 2004

Employment principle

Actions taken

Merit in employment • Employment decisions were based on objective assessment of applicants’ work related qualities, abilities and potential against the genuine requirements of the position.

• Decisions to appoint new employees or promote existing employees were based on competitive selection with recruitment processes designed to identify a suitable field of qualified candidates. This included advertising vacancies to facilitate open competition and the application of objective selection criteria.

• Managers and supervisors involved in recruitment were required to complete the online module Best Practice Recruitment, which incorporates merit and equity requirements.

Fair and reasonable treatment of staff

• Decision making processes were fair, accessible and applied consistently in comparable circumstances.• Decision making criteria were relevant, objective and readily available to the people subject to the decision.• Decisions and actions were free of bias and unlawful discrimination.• Documentation was clear and comprehensive enabling decisions to be transparent and capable of effective

review.• Through the HR Learning Management System modules, staff information booklet and induction program,

employees are made aware of the Institute’s recruitment process, grievance procedure, equal employment opportunity policy, sexual harassment policy and code of conduct.

• Specific training has been conducted to refresh staff knowledge of legislative changes in this area.

Equal opportunity • An Equal Opportunity (EO) policy statement is in place, which is accessible through the staff intranet, staff information booklet and induction program. The policy is reflected in all relevant processes.

• All employment related policies and procedures comply with applicable equal opportunity laws and support diversity across the workforce.

• Procedures are in place to notify the Chief Executive of any discrimination complaints and the findings of associated investigations.

• Data in relation to implementation of EO is monitored and evaluated on a regular basis.

Reasonable avenue of redress

• Employment related policies and procedures demonstrate a commitment to address employee grievances in an effective and timely manner. The intention is always to resolve issues internally and informally, before applying more formal internal or external processes.

• The grievance review process and the rights and responsibilities of participants is available to all employees through the staff intranet, staff information booklet and induction program.

• The process requires appropriate delegation and accountability to be assigned to enable grievances to be effectively considered. Reviews are based on consideration of relevant facts and evidence.

• The principles of natural justice and procedural fairness are applied throughout a review process.

ENVIRONMENTAL PERFORMANCE

Energy efficient buildingsHolmesglen is currently undertaking a performance-based project as part of the Efficient Government Buildings Project with a value of $5.7 million and a target of reducing CO2 emissions by 7,452 tonnes per annum. Initiatives undertaken to date within the project include:

• installation of three co-generation plants at the Chadstone campus and extension of cabling from Moorabbin Building 3 co-generation plant to Building 4

• incorporation of an international measurement and verification processes to ensure the specified CO2 emission reduction target is achieved

• routine monitoring of room timetables to identify non-occupied periods to reduce heating and cooling requirements.

In addition, the following strategies have been implemented in line with government policy:

• Purchase of at least 25 percent of all power for Holmesglen’s five metropolitan campuses from renewable sources.

• Continued installation of T5 and LED light fittings throughout the campuses.• Continued installation of separate smart metering of buildings to enable a more comprehensive monitoring

of services.• Continued implementation of the Building Automation System (BAS) on all campuses and upgrade to Alerton

Aurora package, centrally monitored from Chadstone campus.• Conversion of urinals on all sites to waterless systems and fitting refurbished buildings with dual flush

cisterns and purpose built waterless urinals.• Incorporation of rain water harvesting into some of the new building’s toilet cisterns.• Installation of new high performance plant and equipment at Chadstone, Moorabbin and Waverley campuses.


Table 16: Energy savings projected by conservation measure (2016)

Energy conservation measure Electrical (kWh) Gas (MJ) Water (kL) CO2 (t)

Lighting 2,057,513 - - 2,448

HVAC 407,284 387,000 - 504

BAS 1,039,689 - - 1,237

Rain water harvesting - - 1,358 -

Co-generation 3,709,585 (25,215,000) - 3,123

Hot water boiler upgrades - 1,581,000 - 81

VSD’s and motors 22,817 - - 27

Total 7,262,083 (23,246,000) 1,358 7,452

The following energy savings and reduction in CO2 emissions were achieved on each campus.

Table 17: Energy savings achieved by Institute campus (2016)

Campus Electrical (kWh) Gas (MJ) Water (kL) CO2 (t)

Chadstone 278,290 (3,630,935) (3,814) 4,845

Moorabbin 438,477 (2,544,508) (2,618) 2,025

Waverley (137,868) (472,094) (3,745) 552

Bulli Street 1,559 19,459 2,504 29

Total 580,457 (6,628,078) (7,673) 7,452

Environmentally sustainable designHolmesglen routinely incorporates the following principles into the design of all new buildings on campus:

• Orient buildings to maximise the benefits of solar passive heating and ventilation, while minimising costs• Make environmentally sustainable materials selection• Include energy efficient commissioning and maintenance regimes• Address transport considerations• Maximise the installation of:

• high efficiency air-conditioning infrastructure, including chilled beam technology automatic controls on air-conditioning systems

• energy efficient appliances• lighting control• rain water collection, storage and re-distribution systems for landscape and toilet cistern purposes• solar hot water systems• glazing technologies and window shading.

The three most recently constructed buildings at Holmesglen have all achieved a GBCA 5 star design rating.

Environmental Sustainability CommitteeThe Environmental Sustainability Committee met four times in 2016 to review environmental sustainability issues and initiatives. The committee receives Institute data for energy, waste, water, paper, transport and procurement and makes recommendations for future projects. The committee conducted its annual Enviro Week with the theme of Green Thinking = Positive Change to promote student awareness through a range of activities. Throughout Enviro Week, the Institute abated 185.8 tons of carbon against 207.8 megawatt hours of electricity usage.

In 2016, the Institute reduced its total consumption of energy and CO2 emissions through the following conservation measures.


Table 18: Electricity consumption (2006 – 2016, kWh)

Year Chadstone Moorabbin Waverley City Bulli St Total

2006 7,538,965 4,648,324 1,519,203 - - 13,706,492

2007 7,199,309 4,715,297 1,716,439 - - 13,631,046

2008 7,252,021 4,590,253 1,671,647 - - 13,513,921

2009 7,288,799 4,357,299 1,745,405 - - 13,391,502

2010 7,229,975 4,372,031 1,835,094 - - 13,437,099

2011 7,133,469 4,302,818 2,083,054 - - 13,519,341

2012 7,042,966 4,078,769 2,099,901 1,038,309 121,514 13,221,635

2013 6,744,558 4,079,816 2,091,449 1,099,008 143,554 14,158,384

2014 6,791,090 3,820,005 2,293,903 1,176,415 143,967 14,225,380

2015 5,921,318 2,798,345 2,099,169 1,184,370 132,202 12,137,419

2016 5,643,028 2,359,868 2,237,037 1,190,764 130,643 11,561,341

Table 19: Gas consumption (2006 – 2016, MJ)


2006 21,605,926 15,680,832 3,397,490 - - 40,684,247

2007 16,024,862 15,262,953 3,822,527 - - 35,110,342

2008 17,667,771 15,546,620 4,390,505 - - 37,604,896

2009 14,249,393 13,220,518 4,458,266 - - 31,928,177

2010 14,244,916 14,171,087 4,376,088 - - 32,792,091

2011 13,409,840 14,798,656 4,890,444 - - 33,098,940

2012 14,835,421 13,598,846 5,096,857 2,206,397 25,791 35,763,312

2013 17,543,366 13,655,327 5,151,461 1,131,286 57,648 36,407,802

2014 15,238,011 12,465,319 4,811,200 758,216 25,167 33,297,913

2015 16,033,287 5,344,087 5,798,757 1,230,779 21,852 28,428,762

2016 19,664,222 7,888,595 6,270,851 937,899 2,393 34,763,960

Table 20: Water consumption 2013 – 2016, (kL)


2013 35,416 14,698 6,482 2,994 148 59,738

2014 23,556 19,922 7,486 2,593 151 51,115

2015 23,744 11,263 11,544 2,612 149 49,312

2016 27,558 13,881 15,289 2,483 108 59,319

Table 21: Rainwater tanks and water usage by Institute campus (2016)

Chadstone Moorabbin Waverley City Bulli St

Tank capacity (L) 200,000 168,000 480,000

Not applicable to this campus

25,000

Approx. roof area (m2) 6,250 2,830 3,478 848

Total kL 11,453 5,184 6,374 1.553

Water usage: toilets (kL) 2,863 1,296 1,593 388

Water usage: gardens (kL) 8,590 3,888 4,780 1,165

Note: The mean rainfall (mm) volume for 2016 is 820.7 mm per annum (ref: Cranbourne Botanic Gardens – Bureau of Meteorology website), less 25 percent of spray, multiplied by the square metre of estimated building roof area where the tanks are installed. One mm of rainfall per m2 = one litre of water. Base estimate tanks replenished three times per annum

Energy usageThe Institute has undertaken significant facility expansion each year, making it difficult to quantify any reduction in electricity and gas consumption. Additionally, not all buildings are separately metered and all new buildings are now air-conditioned for student comfort, which increases consumption.


TransportationHolmesglen has reduced the engine capacity of its fleet vehicles, which has resulted in a reduction in 6-cylinder vehicles from 36 percent of the fleet in 2011 to less than 24 percent of the fleet in 2016.

Table 22: Vehicle fleet (2015 – 2016)

2015 2016

Petrol Diesel Petrol Diesel

Number of vehicles 65 22 62 25

Fuel usage (L) 92,819 21,565 86,546 22,363

Total greenhouse gas emissions from vehicle fleet (t) 218 58 208 60

ProcurementHolmesglen ensures the use of environmentally responsible suppliers by incorporating sustainability criteria as part of the tender evaluation process and as part of its overall procurement strategies.

Paper usage In 2016, approximately 20,000 reams of paper were used by the Institute print room services and across all local Institute multi-functional devices. Paper usage in 2016 was lower by about 4,000 reams from the previous year, due primarily to an overall reduction in printing and the use of double-sided printing.

In addition to the 20,000 reams, another 2,600 reams of paper were purchased in 2016, mainly for local Institute printers. Paper products purchased by the Institute are mainly A4 in size and are:• made of fibre from sustainable plantations • elemental chlorine-free processed• environmentally friendly in production (ie carbon neutral and recyclable)• acid-free archival quality.


Financial Report

29 Independent Auditor’s Report - Financial Report

33 Comprehensive Operating Statement

34 Balance Sheet

35 Statement of Changes in Equity

36 Cash Flow Statement

37 Notes to Financial Statements

95 Independent Auditor’s Report - Statement of Performance

98 Statement of Performance

100 Disclosure Indexx

HOLMESGLENANNUAL REPORT 2016 FINANCIAL REPORT

30 | Annual Report 2016 Financial Report


HOLMESGLEN INSTITUTE

Comprehensive operating statement for the financial year ended 31 December 2016

2016 2015 2016 2015Note $'000 $'000 $'000 $'000

Continuing operations

Income from transactionsGovernment contributions - operating 2(a)(i) 53,330 52,829 52,876 52,392 Government contributions - capital 2(a)(ii) 5,000 1,000 5,000 1,000 Sale of goods and services 2(b) 80,836 88,098 80,836 88,098 Interest income 2(c) 612 889 428 406 Other income 2(d) 13,455 12,728 13,221 12,297

Total income from transactions 153,233 155,544 152,361 154,193

Expenses from transactionsEmployee benefits 3(a) 93,426 104,883 93,416 104,853 Depreciation and amortisation 3(b) 10,015 9,742 10,015 9,742 Interest expense 3(c) - 993 - - Supplies and Services 3(d) 29,474 27,885 29,240 27,495 Other operating expenses 3(e) 9,943 10,574 9,862 10,419

Total expenses from transactions 142,858 154,077 142,533 152,509

Net result from transactions (net operating balance) 10,375 1,467 9,828 1,684

Other economic flows included in net resultNet gain/(loss) on non-financial assets 4(a) 6,000 8,173 5,441 5,038 Net gain/(loss) on financial instruments 4(b) (400) 5,735 (400) 5,427

Total other economic flows included in net result 5,600 13,908 5,041 10,465

Net result from continuing operations 15,975 15,375 14,869 12,149

Net result 15,975 15,375 14,869 12,149

Other economic flows – other comprehensive incomeItems that will not be reclassified to net result

Changes in physical asset revaluation surplus 16(b) - 11,003 - 11,003 Items that may be reclassified subsequently to net result

Valuation gain/(loss) recognised on sale of financial assets 16(c) 1,239 (2,819) 1,239 (2,764) Items that have been reclassified to net result

Transfer to profit and loss on sale of financial assets 16(c) - (4,959) - (4,651)

Total other economic flows – Other comprehensive income 1,239 3,225 1,239 3,588

Comprehensive result 17,214 18,600 16,108 15,737

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

Consolidated Institute

Page 2



Balance Sheet as at 31 December 2016

2016 2015 2016 2015Note $'000 $'000 $'000 $'000

Assets

Financial assetsCash and deposits 5 21,260 27,868 9,019 19,344 Receivables 6 15,175 9,569 14,797 9,257 Investments 7 63,504 42,265 63,504 42,265

Total financial assets 99,939 79,702 87,320 70,866

Non-financial assetsInventories 8 66 74 66 74 Property, plant and equipment 11 255,682 256,414 255,682 256,414 Intangible assets 12 863 1,032 863 1,032 Investment properties 10 90,890 86,676 69,960 65,910 Non-financial assets classified as held-for-sale 10 - 3,260 - - Other non-financial assets 9 2,629 2,396 2,593 2,356

Total non-financial assets 350,130 349,852 329,164 325,786

Total assets 450,069 429,554 416,484 396,652

LiabilitiesPayables 13 28,318 27,212 28,245 26,716 Advance from Government 14 4,516 4,007 4,516 4,007 Provisions 15 13,726 12,040 13,726 12,040

Total liabilities 46,560 43,259 46,487 42,763

Net assets 403,509 386,295 369,997 353,889

EquityContributed capital 16 (a) 122,807 122,807 122,807 122,807 Physical asset revaluation surplus 16 (b) 144,313 144,313 144,313 144,313 Financial assets available-for-sale revaluation surplus 16 (c) 1,504 265 1,504 265 Accumulated surplus/(deficit) 16 (d) 134,885 118,910 101,373 86,504

Net worth 403,509 386,295 369,997 353,889

Commitments for expenditure 18- - -

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


Page3



Statement of Changes in Equity for the year ended 31 December 2016

Consolidated

Physical asset

revaluation surplus

Available for sale

financial asset

revaluation surplus

Accumulated surplus

Contributions by owner

Total

Note $'000 $'000 $'000 $'000 $'000At 1 January 2015 16 133,310 8,043 103,535 122,807 367,695

Net result for the year 15,375 15,375 Changes in physical asset revaluation surplus 16 (b) 11,003 11,003 Transfer to profit and loss on sale of financial assets 16 (c) (4,959) (4,959) Valuation gain/(loss) recognised on sale of financial assets 16 (c) (2,819) (2,819)

Year ended 31 December 2015 16 (d) 144,313 265 118,910 122,807 386,295 Net result for the year 15,975 15,975 Valuation gain/(loss) recognised on sale of financial assets

16 (c)1,239 1,239

Year ended 31 December 2016 16 (d) 144,313 1,504 134,885 122,807 403,509

Institute

Physical asset

revaluation surplus

Available for sale

financial asset

revaluation

Accumulated surplus

Contributions by owner

Total

Note $'000 $'000 $'000 $'000 $'000At 1 January 2015 16 133,310 7,680 74,355 122,807 338,152

Net result for the year 12,149 12,149 Changes in physical asset revaluation surplus 16 (b) 11,003 11,003 Transfer to profit and loss on sale of financial assets 16 (c) (4,651) (4,651) Valuation gain/(loss) recognised on sale of financial assets 16 (c) (2,764) (2,764)

Year ended 31 December 2015 16 (d) 144,313 265 86,504 122,807 353,889 Net result for the year 14,869 14,869 Valuation gain/(loss) recognised on sale of financial assets 16 (c)

1,239 1,239 Year ended 31 December 2016 16 (d) 144,313 1,504 101,373 122,807 369,997

The statement of changes in equity should be read in conjunction with the notes to the financial statements.

Page 4



Cash Flow Statement for the year ended 31 December 2016

2016 2015 2016 2015Note $'000 $'000 $'000 $'000

Cash flows from operating activitiesReceipts

Government contributions - operating 52,664 54,097 52,210 54,097 Government contributions - capital 5,000 1,523 5,000 1,000 User fees and charges received 88,266 89,192 86,526 88,077 Goods and services tax recoverable 4,390 5,946 4,295 5,946 Interest received 617 914 438 426 Dividends received 1,791 2,010 1,772 1,747 Other receipts 6,426 5,443 7,571 6,905

Total receipts 159,154 159,125 157,812 158,198

PaymentsPayments to suppliers and employees (134,481) (144,076) (134,011) (143,714) Interest and other costs of finance paid - (1,079) - - Goods and services tax paid (7,022) (5,720) (6,512) (5,669)

Total payments (141,503) (150,875) (140,523) (149,383)

Net cash flows from/(used in) operating activities 17 17,651 8,250 17,289 8,815

Cash flows from investing activitiesPayments for managed investments (20,000) (42,000) (20,000) (42,000) Proceeds from sale of investments - 43,781 - 32,173 Proceeds from repayment of loans receivable - 3,500 - 8,500 Payments for non-financial assets (7,959) (6,579) (7,959) (6,393) Proceeds from sale of non-financial assets 3,591 609 236 309

Net cash provided by/(used in) investing activities (24,368) (689) (27,723) (7,411)

Cash flows from financing activities Advance from Government 109 2,968 109 2,968

Repayment of loan - (11,857) - -

Net cash provided by/(used) in financing activities 109 (8,889) 109 2,968

Net increase (decrease) in cash and cash equivalents (6,608) (1,328) (10,325) 4,372 Cash and cash equivalents at the beginning of the financial year 27,868 29,196 19,344 14,972

Cash and cash equivalents at the end of the financial year 5 21,260 27,868 9,019 19,344

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


Page 5



Notes to the financial statements

Note Contents of the notes to the financial statements Page

1 Summary of significant accounting policies 72 Income from transactions 283 Expenses from transactions 294 Other economic flows included in net result 305 Cash and deposits 306 Receivables 307 Investments 318 Inventories 319 Other non-financial assets 31

10 Investment properties 3211 Property, plant and equipment 3512 Intangible assets 3813 Payables 3914 Borrowings 3915 Provisions 4016 Equity 4117 Cash flow information 4218 Commitments for expenditure 4319 Leased Assets 4420 Contingent assets and contingent liabilities 4421 Economic dependency 4422 Subsequent events 4423 Remuneration of auditors 4424 Superannuation 4525 Responsible persons and executive officers 4626 Related parties 4827 Subsidiaries and other related parties 4828 Institute details 4829 Financial instruments 49

31 December 2016

Page 6


Holmesglen Institute


NOTE 1

Summary of significant accounting policies

1.01 Statement of compliance

1.02

Critical accounting judgement and key sources of estimation uncertainty

Basis of accounting preparation and measurement

• 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;

The annual financial statements represent the audited general purpose financial statements for Holmesglen Institute and controlled entities being Holmesglen International Training Services Pty. Ltd., Glenuc Pty. Ltd. and the Holmesglen Foundation, and the separate financial statements and notes of Holmesglen Institute as an individual parent entity (‘Parent Entity’).

The accounting policies set out below have been applied in preparing the financial statements for the year ended 31 December 2016 and the comparative information presented for the year ended 31 December 2015.

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.

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.

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

These financial statements are presented in Australian dollars, the functional and presentation currency of the Institute, and have been prepared in accordance with the historical cost convention. Historical cost is based on the fair values of the consideration given in exchange for assets. Exceptions to the historical cost convention include:

The financial report was authorised for issue by the Board of Holmesglen Institute at its meeting of the 22 March 2017. The Institute has the power to amend and reissue the financial report.

• superannuation expense; and• actuarial assumptions for employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates.

• investment properties, which after initial recognition, are measured at fair value through profit and loss; and• available-for-sale investments which are measured at fair value with movements reflected in 'other economic flows - other comprehensive income'.

• the fair value of land, buildings, plant and equipment;

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 relate to:

Page 7




NOTE 1


1.02

• discount rates applied to material balances where applicable;• the extent of Institute's control over affiliated entities.

Fair value measurement

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

1.03 Reporting entity

Its principal address is: Holmesglen InstituteCnr Batesford and Warrigal RoadHolmesglen, Victoria, 3148.

The financial statements include all the controlled activities of the entity.

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is

For the purpose of fair value disclosures, the Institute has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

In addition, the Institute determines whether transfers have occurred between levels in the hierarchy by re assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.The Valuer General Victoria (VGV) is the Institute’s independent valuation agency.

The Institute, in conjunction with VGV, monitors changes in the fair value of each asset and liability through relevant data sources to determine whether revaluation is required.

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

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement

The following are the critical judgements apart from those involving estimations that the Institute has made in the process of applying the accounting policies and that have the most significant effect of the amounts recognised in the consolidated financial statements.

Consistent with AASB 13 Fair Value Measurement , the Institute determines the policies and procedures for both recurring fair value measurements such as property, plant and equipment, investment properties and financial instruments and for non-recurring fair value measurements such as non-financial physical assets held for sale, in accordance with the requirements of AASB 13 and the relevant Financial Reporting Directions.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Basis of accounting preparation and measurement (continued)

is directly or indirectly observable; and

unobservable.

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NOTE 1


1.04 Basis of consolidation

Entities consolidated into the Institute's reporting entity include:

Holmesglen International Training Services Pty. Ltd. Holmesglen FoundationGlenuc Pty. Ltd.

1.05 Scope and presentation of financial statementsComprehensive operating statementThe comprehensive operating statement comprises three components, being ‘net result from transactions’ (or termed as ‘net operating balance’), ‘other economic flows included in net result’, as well as ‘other economic flows – other comprehensive income’. The sum of the former two, together with the net result from discontinued operations, represents the net result.

Balance sheetAssets and liabilities are presented in liquidity order with assets aggregated into financial assets and non-financial assets.Current and non-current assets and liabilities are disclosed in the notes, where relevant. In general, non-current assets or liabilities are expected to be recovered or settled more than 12 months after the reporting period, except for the provisions of employee benefits, which are classified as current liabilities if the Institute does not have the unconditional right to defer the settlement of the liabilities within 12 months after the end of the reporting period.

The net result is equivalent to profit or loss derived in accordance with AASs.

‘Other economic flows’ are changes arising from market remeasurements. They include:

• gains and losses from disposals of non-financial assets;• revaluations and impairments of non-financial physical and intangible assets;• remeasurement arising from defined benefit superannuation plans; and• fair value changes of financial instruments

This classification is consistent with the whole of government reporting format and is allowed under AASB 101 Presentation of Financial Statements.

Cash flow statementCash flows are classified according to whether or not they arise from operating, investing, or financing activities. This classification is consistent with requirements under AASB 107 Statement of Cash Flows. For cash flow statement presentation purposes, cash and cash equivalents include bank overdrafts, which are included as current borrowings on the balance sheet.

Statement of changes in equityThe statement of changes in equity presents reconciliations of non-owner and owner changes in equity from opening balances at the beginning of the reporting period to the closing balances at the end of the reporting period. It also shows separately changes due to amounts recognised in the ‘Comprehensive result’ and amounts related to ‘Transactions with owner in its capacity as owner’.

Where control of an entity is obtained during the financial period, its results are included in the comprehensive operating statement from the date on which control commenced. Where control ceases during a financial period, the entity’s results are included for that part of the period in which control existed. Where entities adopt dissimilar accounting policies and their effect is considered material, adjustments are made to ensure consistent policies are adopted in these financial statements.

In preparing consolidated financial statements for the Institute, all material transactions and balances between consolidated entities are eliminated.

In accordance with AASB 10 Consolidated Financial Statements: - the consolidated financial statements of the Institute include all reporting entities controlled by the Institute as at 31 December 2016; and- the consolidated financial statements exclude bodies that are not controlled by the Institute, and therefore are not consolidated.

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NOTE 1


1.06 Events after reporting date

1.07 Goods and Services Tax (GST)

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 are considered to be of material interest.

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 are presented as operating cash flow.

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

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NOTE 1


1.08 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 income

(i) Dividend revenue

(ii) Rental income

(iii) Donations, bequests and contributions

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

Interest income includes interest received on bank term deposits and other investments and the unwinding over time of the discount on financial assets. Interest income is recognised using the effective interest method which allocates the interest over the relevant period.

(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

Net realised and unrealised gains and losses on the revaluation of investments do not form part of income from transactions, but are reported either as part of income from other economic flows in the net result or as unrealised gains or losses taken directly 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.

Donations, bequests and contributions are recognised when received.

Dividend revenue is recognised when the right to receive payment is established. The institute does not recognise dividends received or receivable from its associates and joint venture as income. Instead, dividends from associates and joint ventures are adjusted directly against the carrying amount of the investments using the equity method.

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;

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.

Income is recognised to the extent that it is probable that the economic benefits will flow to the entity and the income can be reliably measured at fair value. 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:

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NOTE 1


1.09 Expenses from transaction

Employee benefits

(i) Defined contribution planContributions to defined contribution plans are expensed when they become payable.

(ii) Defined benefit plans

Depreciation and amortisationDepreciation

Method Rates 2016

Computer equipmentCultural assets 1% 1%

3.33% to 44.44% 3.33% to 44.44%

Amortisation

2016 2015Capitalised software development cost (years) 10 10

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

8% to 20%14.28%

Class of Asset

Buildings

Motor vehicles

1.67% to 100%

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:

Useful life

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

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:

Straight-LineStraight-Line

Straight-LineStraight-LineStraight-Line

Rates 2015

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

Expenses from transactions are recognised as they are incurred, and reported in the financial year to which they relate.

20% to 37.45%Straight-Line

1.67% to 100%20% to 37.45%

8% to 20%14.28%

Plant and equipment

Retirement benefit obligations

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

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

Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land. Depreciation is generally calculated on a straight-line basis, at rates that allocate the asset's value, less any estimated residual value, over its estimated useful life. 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, and adjustments made where appropriate.

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

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

Library collections

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NOTE 1


1.09 Expenses from transactions (continued)

Interest Expense

1.10 Other economic flows included in net result

Net gain/(loss) on non-financial assets

Disposal of non-financial assets

Impairment of non-financial assets

• Inventories;• Financial assets;• Investment property that is measured at fair value;• Non-current assets held-for-sale.

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.

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 possible recoverable amount and so require write downs).

Interest expense is recognised in the period in which it is incurred.

Interest expense includes interest on advances, loans, overdrafts, bonds and bills, deposit, interest components of finance lease repayments, and amortisation of discounts or premiums in relation to borrowings.

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 Comprehensive Operating Statement, except to the extent that the write down can be debited to an asset revaluation reserve amount applicable to that class of asset.

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.

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

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NOTE 1


1.10 Other economic flows included in net result (continued)

Net gain/(loss) on financial instruments

Revaluations of financial instruments at fair value

Impairment of financial assets

Other gains/(losses) from other economic flows

1.11 Financial instruments

Categories of non‑derivative financial instrumentsLoans and receivables

Available-for-sale 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.

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.

Financial assets have been assessed for impairment in accordance with Australian Accounting Standards. Where a financial asset's fair value at balance date has reduced by 20 per cent or more than its cost price; or where its fair value has been less than its cost price for a period of 12 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.

Financial instruments arise out of contractual agreements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Loans and receivables are financial instrument assets with fixed and determinable payments that are not quoted on an active market. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

Loans and receivables category includes cash and deposits, term deposits with maturity greater than three months, trade receivables, loans and other receivables, but not statutory receivables.

This classification is consistent with the whole government reporting format and is allowed under AASB 101 Presentation of Financial Statements.

Available-for-sale financial instrument assets are those designated as available-for-sale or not classified in any other category of financial instrument asset.

Such assets are initially recognised at fair value. Subsequent to initial recognition, they are measured at fair value, with gains and losses arising from changes in fair value recognised in ‘Other economic flows – other comprehensive income’ until the investments are disposed.

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NOTE 1


1.11 Financial instruments (continued)

Available-for-sale financial assets (continued)

Held-to-maturity financial assets

Financial assets and liabilities at fair value through profit and loss

Financial liabilities at amortised cost

Reclassification of financial instruments

Movements resulting from impairment and foreign currency changes are recognised in the net result as other economic flows. On disposal, the cumulative gain or loss previously recognised in ‘Other economic flows – other comprehensive income’ is transferred to other economic flows in the net result.

Fair value is determined in the manner described in Note 29 Financial instruments .

Available-for-sale category includes certain equity investments and those debt securities that are designated as available-for-sale.

If the Institute has the positive intent and ability to hold nominated investments to maturity, then such financial assets may be classified as held-to-maturity. Held-to-maturity financial assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition held-to-maturity financial assets are measured at amortised cost using the effective interest method, less any impairment losses.

Subsequent to initial recognition and under rare circumstances, non-derivative financial instruments assets that have not been designated at fair value through profit or loss upon recognition, may be reclassified out of the fair value through profit or loss category, if they are no longer held for the purpose of selling or repurchasing in the near term.

Financial instrument assets that meet the definition of loans and receivables may be reclassified out of the fair value through profit and loss category into the loans and receivables category, where they would have met the definition of loans and receivables had they not been required to be classified as fair value through profit and loss. In these cases, the financial instrument assets may be reclassified out of the fair value through profit and loss category, if there is the intention and ability to hold them for the foreseeable future or until maturity.

Available-for-sale financial instrument assets that meet the definition of loans and receivable may be reclassified into the loans and receivables category if there is the intention and ability to hold them for the foreseeable future or until maturity.

The held-to-maturity category includes certain term deposits for which the Institute intends to hold to maturity.

Financial assets are categorised as fair value through profit or loss at trade date if they are classified as held-for-trading or designated as such upon initial recognition. Financial instrument assets are designated at fair value through profit or loss on the basis that the financial assets form part of a group of financial assets that are managed by the entity based on their fair values, and have their performance evaluated in accordance with documented risk management and investment strategies.

Financial instruments at fair value through profit or loss are initially measured at fair value and attributable transaction costs are expensed as incurred. Subsequently, any changes in fair value are recognised in the net result as other economic flows. Any dividend or interest on a financial asset is recognised in the net result from transactions.

Financial instrument liabilities are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the interest-bearing liability, using the effective interest rate method.

Financial instrument liabilities measured at amortised cost include all of the Institute's contractual payables, advances received and interest-bearing arrangements other than those designated at fair value through profit or loss.

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NOTE 1


1.12 Financial assetsCash and deposits

Receivables

• loans and receivables;• held to maturity investments; and • available-for-sale financial assets.

• the rights to receive cash flows from the asset have expired; or

the asset.

• the Institute retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full

• the Institute has transferred its rights to receive cash flows from the asset and either:

• statutory receivables, which include predominantly amounts owing from the Victorian Government and GST

• contractual receivables, which include debtors in relation to goods and services, loans to third parties,

Derecognition of financial assetsA financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

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.

Investments

input tax credits recoverable; and

accrued investment income, and finance lease receivables

without material delay to a third party under a ‘pass through’ arrangement; or

(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

Any dividend or interest earned on the financial asset is recognised in the consolidated comprehensive operating statement as a transaction.

Investments are classified in the following categories:

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

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:

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.

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.

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.

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NOTE 1


1.12 Financial assets (continued)Impairment of financial assets

1.13 Leases

1.14 Non-Financial AssetsInventories

Operating leasesInstitute as lessor

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.

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.

A lease is a right to use an asset for an agreed period of time in exchange for payment.

Institute as lesseeOperating 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.

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.

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 120 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.

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.

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.

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.

Inventories include goods and other property held either for sale or for distribution at a zero or nominal cost, or for consumption in the ordinary course of business operations.

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NOTE 1


1.14 Non-Financial Assets (continued)Inventories (continued)

Non-financial physical assets classified as held-for-sale, including disposal group assets

Property, plant and equipment

These non-financial physical assets, related liabilities and financial assets are measured at the lower of carrying amount and fair value less costs to sell, and are not subject to depreciation or amortisation.

All non-financial physical assets, are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment. Where an asset is received for no or nominal consideration, the cost is the asset’s fair value at the date of acquisition.

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

Cost, includes an appropriate portion of fixed and variable overhead expenses. Cost is assigned to land held for sale (undeveloped, under development, developed) and to other high value, low volume inventory items on a specific identification of cost basis. Cost for all other inventory is measured on the basis of weighted average cost.

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.

• the asset is available for immediate use in the current condition; and• the sale is highly probable and the asset’s sale is expected to be completed within twelve months from the

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.

Non-financial physical assets (including disposal group assets) are treated as current and classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use.

This condition is regarded as met only when:

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.

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.

date of classification.

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NOTE 1


1.14 Non-Financial Assets (continued)Property, plant and equipment (continued)

Library collections

Revaluations of non-financial physical assets

Investment properties

For the accounting policy on impairment of non-financial physical assets, refer to Note 1.10 on Impairment of non-financial assets.

Library collections are measured 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.

Investment properties represent properties held to earn rentals or for capital appreciation or both. Investment properties exclude properties held to meet service delivery objectives of the Institute.

Investment properties are initially recognised at cost. Costs incurred subsequent to initial acquisition are capitalised when it is probable that future economic benefits in excess of the originally assessed performance of the asset will flow to the Institute.

Subsequent to initial recognition at cost, investment properties are re-valued to fair value with changes in the fair value recognised as other economic flows in the comprehensive operating statement in the period in which they arise. Fair values are determined based on a market comparable approach that reflects recent transaction prices for similar properties. These properties are neither depreciated nor tested for impairment.

Non-financial physical assets measured at fair value are revalued in accordance with Financial Reporting Directions (FRDs) issued by the Minister for Finance. A full revaluation 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. Independent valuers are generally used to conduct these scheduled revaluations. Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value.

Net revaluation increases (where the carrying amount of a class of assets is increased as a result of a revaluation) are recognised in ‘other economic flows – other comprehensive income’, and accumulated in equity under the asset revaluation surplus. However, the net revaluation increase is recognised in the net result to the extent that it reverses a net revaluation decrease in respect of the same class of property, plant and equipment previously recognised as an expense (other economic flows) in the net result.

Net revaluation decrease is recognised in ‘other economic flows – other comprehensive income’ to the extent that a credit balance exists in the asset revaluation surplus in respect of the same class of property, plant and equipment. Otherwise, the net revaluation decreases are recognised immediately as other economic flows in the net result. The net revaluation decrease recognised in ‘other economic flows – other comprehensive income’ reduces the amount accumulated in equity under the asset revaluation surplus.

Revaluation increases and revaluation decreases relating to individual assets within a class of property, plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes. The asset revaluation surplus is not transferred to accumulated funds on derecognition of the relevant asset.

Rental income from the leasing of investment properties is recognised in the comprehensive operating statement on a straight-line basis, over the lease term.

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NOTE 1


1.14 Non-Financial Assets (continued)Intangible assets

(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;(b) the intention to complete the intangible asset and use or sell it;(c) the ability to use or sell the asset;(d) the intangible asset will generate probable future economic benefits;

Intangible assets are initially recognised at cost. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated depreciation/amortisation and accumulated impairment losses. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the Institute.

When recognition criteria AASB 138 Intangible Assets are met, internally generated intangible assets are recognised and measured at cost less accumulated depreciation/amortisation and impairment.Expenditure on research activities is recognised as an expense in the period in which it is incurred.

PrepaymentsPrepayments represent payments in advance of receipt of goods and services or that part of expenditure made in one accounting period covering a term extending beyond that period.

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:

Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred.

(e) the availability of adequate technical, financial and other resources to complete the development and to use

(f) the ability to measure reliably the expenditure attributable to the intangible asset during its development. or sell the intangible asset; and

Page 20




NOTE 1


1.15 Liabilities Payables

Provisions

Employee benefits

(ii) Long service leave

The components of the current LSL liability are measured at :• nominal value (undiscounted value) - component that is expected to be wholly settled within 12 months; and• present value (discounted value) - component that is not expected to be wholly settled within 12 months.

Payables consist of:

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.

• contractual payables, such as accounts payable, and unearned income including deferred income from concession

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

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

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

Unconditional LSL is disclosed in the notes to the financial statements as a current liability, even where the Institute does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.

Conditional LSL is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. This non-current LSL liability is measured at present value.

Any gain or loss following revaluation of the present value of non-current LSL liability is recognised as a transaction, except to the extent that a gain or loss arises due to changes in bond interest for which it is then recognised as an other economic flow.

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 cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows.

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date.

(i) Wages and salaries, and annual leaveLiabilities for wages and salaries, including non-monetary benefits and annual leave, are all recognised in the provision for employee benefits as 'current liabilities', because the Institute does not have an unconditional right to defer settlements of these liabilities.

Depending on the expectation of the timing of settlement, liabilities for wages and salaries and annual leave are measured at:• undiscounted value - if the Institute expects to wholly settle within 12 months; or• present value - if the Institute does not expect to wholly settle within 12 months.

Page 21




NOTE 1


1.15 Liabilities (continued)(iii) Termination benefits

Employee benefits on-costs

Borrowings

Financial liabilities

1.16 Commitments

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee decides to accept an offer of benefits in exchange for termination of employment. 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.

Provision for on-costs such as payroll tax, workers compensation and superannuation are recognised separately from the provision of employee benefits.

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed by way of note at their nominal value and inclusive of the GST payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised in the balance sheet.

Borrowings are initially measured at fair value, being the cost of the interest bearing liabilities, net of transaction costs. The measurement basis subsequent to initial recognition depends on whether the Institute has categorised its interest-bearing liabilities as either financial liabilities designated at fair value through the profit and loss, or financial liabilities at amortised cost. Any difference between the initial recognised amount and the redemption value is recognised in net result over the period of the borrowing using the effective interest method.

The classification depends on the nature and purpose of the interest bearing liabilities. The Institute determines the classification of its interest bearing liabilities at initial recognition.

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.

Page 22




NOTE 1


1.17 Contingent assets and contingent liabilities

1.18 EquityContributed capital

1.19 Foreign currency translationsFunctional and presentation currency

Transactions and balances

1.20

1.21 Rounding of amounts

1.22 Comparative information

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note (refer to Note 20) 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 Victorian State government is 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.

Transfers of net assets arising from administrative restructurings are treated as distributions to or contributions by owners. Transfers of net liabilities arising from administrative restructurings are treated as distribution to owners.

The functional currency of each group entity is measured using the currency of the primary economic environment in which that entity operates. The Institute's financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

MaterialityIn accordance with Accounting Standard AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors , when an Australian Accounting Standard specifically applies to a transaction, other event or condition, the accounting policies applied to that item shall be determined by applying the Standard, unless the effect of applying them is immaterial.

Accounting policies will be considered material if their omission or misstatement could, either individually or collectively, influence the economic decisions that users make on the basis of the financial statements. Materiality depends on the size and nature of the omission or misstatement judged in the surrounding circumstances.

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.

Page 23




NOTE 1


1.23 Change in accounting policy

• AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101

The assessment has indicated that there is no expected impact as the revenue-based method is not used for depreciation and amortisation.

The assessment has indicated that there is no expected impact, as those that conduct rate-regulated activities have already adopted Australian Accounting Standards.• AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation [AASB 116 & AASB 138]

• AASB 2014-9 Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements [AASB 1, 127 & 128]The assessment indicates that there is no expected impact as the entity will continue to account for the investments in subsidiaries, joint ventures and associates using the cost method as mandated if separate financial statements are presented in accordance with FRD 113A.• AASB 2015‑10 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128• AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations [AASB 1 & AASB 11]• AASB 2014-6 Amendments to Australian Accounting Standards – Agriculture: Bearer Plants [AASB 101, AASB 116, AASB 117, AASB 123, AASB 136, AASB 140 & AASB 141]• AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012–2014 Cycle

Subsequent to the 2015 reporting period, the following new and revised accounting standards have been adopted in the current period and are considered to have insignificant impact on the financial reporting.

• AASB 14 Regulatory Deferral Accounts:AASB 14 permits first-time adopters of Australian Accounting Standards who conduct rate-regulated activities to continue to account for amounts related to rate regulation in accordance with their previous GAAP.

Page 24




NOTE 1


1.24 New and revised AASBs in issue but not yet effective

Applicable for annual reporting periods beginning on 1 Jan 2018

1 Jan 2019

1 Jan 2019

AASB 16 Leases The key changes introduced by AASB 16 include the recognition of most operating leases (which are currently not recognised) on balance sheet.

The assessment has indicated that as most operating leases will come on balance sheet, recognition of lease assets and lease liabilities will cause net debt to increase.

Depreciation of lease assets and interest on lease liabilities will be recognised in the income statement with marginal impact on the operating surplus. The amounts of cash paid for the principle portion of the lease liability will be presented within financing activities and the amounts paid for the interest portion will be presented within operating activities in the cash flow statement. No change for lessors.

AASB 15 Revenue from Contracts with Customers

The core principle of AASB 15 requires an entity to recognise revenue when the entity satisfies a performance obligation by transferring a promised good or service to a customer.

The changes in revenue recognition requirements in AASB 15 may result in changes to the timing and amount of revenue recorded in the financial statements. The Standard will also require additional disclosures on service revenue and contract modifications. A potential impact will be the upfront recognition of revenue from licenses that cover multiple reporting periods. Revenue that was deferred and amortised over a period may now need to be recognised immediately as a transitional adjustment against the opening retained earnings if there are no former performance obligations outstanding.

AASB 9 Financial Instruments The key changes include the simplified requirements for the classification and measurement of financial assets, a new hedging accounting model and a revised impairment loss model to recognise impairment losses earlier, as opposed to the current approach that recognises impairment only when incurred.

The assessment has identified that the financial impact of available-for-sale assets will now be reported through other comprehensive income and no longer recycled to the profit and loss.

While the preliminary assessment has not identified any material impact arising from AASB 9, it will continue to be monitored and assessed.

Certain new accounting standards and interpretations have been published that are not effective for the 31 December 2016 reporting period.As at 31 December 2016 the following standards and interpretations (applicable to the Institute) had been issued but were not effective for financial year ending 31 December 2016. The Institute has not, and does not intend to, adopt these standards early.

Standard/Interpretation Summary Impact on entity financial statements

Page 25




NOTE 1


1.24 New and revised AASBs in issue but not yet effective (continued)

Application date of standard

1 Jan 2018

1 Jan 2018

1 July 2016


This amending standard will defer the application period of AASB 9 to the 2018-19 reporting period in accordance with the transition requirements.

AASB 2014-10 Amendments to Australian Accounting Standards - Sale or Contribution of assets between an Investor and its Associate or Joint Venture (AASB 10 & AASB 128)

AASB 2015-10 amends AASB 10 Consolidated Financials Statements and AASB 128 Investments in Associates to ensure consistent treatment in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The amendments require that: · a full gain or loss to be recognised by the investor when a transaction involves a business (whether it is housed in a subsidiary or not);and ·a partial gain or loss to be recognised by the parent when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.

The assessment has indicated that there is limited impact, as revisions to AASB 10 and AASB 128 are guidance in nature.

AASB 2015-6 Amendments to Australian Accounting Standards - Extending Related Party Disclosures to Not-for-Profit Public Sector Entities (AASB 10, AASB 124 & AASB 1049)

The Amendments extend the scope of AASB 124 Related Party Disclosures to non-for-profit public sector entities. A guidance has been included to assist the application of the Standard by non-for-profit public sector entities.

The amending standard will result in extended disclosures on the entity's key management personnel (KMP), and the related party transactions.

Amends various AASs to reflect the AASB's decision to defer the mandatory application date of AASB 9 to annual reporting periods beginning on or after 1 January 2018 as a consequence of Chapter 6 Hedge Accounting, and to amend reduced disclosure requirements.

AASB 2014-1 Amendments to Australian Accounting Standards (Part E Financial Instruments)

Page 26




NOTE 1


1.24 New and revised AASBs in issue but not yet effective (continued)

Application date of standard

1 Jan 2017

1.24 New and revised AASBs in issue but not yet effective


AASB 2016-4 Amendments to Australian Accounting Standards - Recoverable Amount of Non Cash-Generating Specialised Assets of Non-for-Profit Entities

The standard amends AASB 136 Impairment of Assets to remove reference to using depreciated replacement cost (DRC) as a measure of value in use for not-for-profit entities.

The assessment has indicated that there is minimal impact. Given the specialised nature and restrictions of public sector assets, the existing use is presumed to be the highest and best use (HBU), hence current replacement cost under AASB 13 Fair Value Measurement is the same as the depreciated replacement cost concept under AASB 136.

AASB 9 (December 2009) and AASB 9 (December 2010) [AASB 9 (2009 & 2010]

# This Standard or Amendment may not be relevant to Victorian not-for-profit entities when operative.

In addition to the new standards above, the AASB has issued a list of amending standards that are not effective for the 2016 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 AASB Interpretation in the list below is also not effective for the 2016 reporting period and is considered to have insignificant impacts on public sector reporting.

• AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010). • AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial

• AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2015)• AASB 2014-8 Amendments to Australian Accounting Standards arising from AASB 9 (December 2015) – Application of

• AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101

• AASB 2015-3 Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality [AASB 7, AASB 101, AASB 134 & AASB 1049]

Instruments

• AASB 2015-5 Amendments to Australian Accounting Standards - Investment Entities: Applying the Consolidated Exception AASB 10, AASB 12, AASB 128)#

Losses [AASB 112]• AASB 2016-2 Amendments to Australian Accounting Standards - Disclosure initiative: Amendment to AASB 107• AASB 2016-3 Amendments to Australian Accounting Standards - Clarifications to AASB 15• AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-based Transactions [AASB 2]

• AASB 2016-1 Amendments to Australian Accounting Standards - Recognition of Deferred Tax Assets for Unrealised

Page 27



Notes to the financial statements31 December 2016


2016 2015 2016 2015Note $'000 $'000 $'000 $'000

2 Income from transactions(a) Grants and other transfers (other than contributions by owners)

Government financial assistance(i) Government contributions - operating

State government - contestable and fees concession 42,567 36,072 42,567 36,072 Other contributions by Commonwealth Government 1,985 2,212 1,985 2,212 Other contributions 654 507 200 70 Other contributions by State Government 8,124 14,038 8,124 14,038 Total government contributions - operating 53,330 52,829 52,876 52,392

(ii) Government contributions - capital State capital 5,000 1,000 5,000 1,000

Total government contributions - capital 5,000 1,000 5,000 1,000 Total government contributions 58,330 53,829 57,876 53,392

(b) Sales of goods and servicesStudent fees and charges 10,406 9,267 10,406 9,267 Student fees and charges ( Fee Help) 13,306 27,103 13,306 27,103 Rendering of services

Fee for service - Government 1,525 1,067 1,525 1,067 Fee for service - International operations - onshore 32,144 28,873 32,144 28,873 Fee for service - International operations - offshore 2,286 2,729 2,286 2,729 Fee for service - Training programs 17,472 16,342 17,472 16,342

Total rendering of services 77,139 85,381 77,139 85,381

Other non-course fees and chargesOther sales of goods and services 3,697 2,717 3,697 2,717

Total other fees and charges 3,697 2,717 3,697 2,717

Total revenue from sale of goods and services 80,836 88,098 80,836 88,098

(c) InterestInterest from financial assets not at fair value through P/L:

Interest on bank and other cash deposits 612 889 428 406 Net interest income 612 889 428 406

(d) Other incomeRental revenue:

Investment properties 5,364 4,978 3,622 3,415 Other (accommodation, room rental etc.) 2,313 2,235 2,913 2,835

Total rental revenue 7,677 7,213 6,535 6,250

Dividends/Distributions 2,172 2,354 2,172 2,119 Total Dividends / Distributions 2,172 2,354 2,172 2,119

Donations, bequests and contributions 5 48 5 48 Other (car parking fees, management fees etc) 3,601 3,113 4,509 3,880 Total other income 13,455 12,728 13,221 12,297

Page 28





2016 2015 2016 2015Note $'000 $'000 $'000 $'000

3 Expenses from transactions(a) Employee benefit expenses

Salaries, wages, overtime and allowances 78,963 89,758 78,954 89,731 Superannuation 6,503 6,920 6,502 6,917 Payroll tax 3,909 3,874 3,909 3,874 Long service leave 2,764 2,055 2,764 2,055 Termination benefits 286 1,924 286 1,924 Annual leave 252 (268) 252 (268) Other 749 620 749 620

Total employee benefits 93,426 104,883 93,416 104,853

(b) Depreciation and amortisationDepreciation of non-current assets

Buildings 7,850 6,871 7,850 6,871 Leasehold improvement 410 422 410 422 Plant and equipment 479 557 479 557 Cultural assets 4 4 4 4 Motor Vehicles 420 423 420 423 Library collections 270 223 270 223 Computer Equipment 413 1,072 413 1,072

Total depreciation 9,846 9,572 9,846 9,572 Amortisation of non-current assets

Software 169 170 169 170 Total amortisation 169 170 169 170 Total depreciation and amortisation 10,015 9,742 10,015 9,742

(c) Interest Expense Interest Expense on Borrowings - 993 - - Total Interest Expense - 993 - -

(d) Supplies and services:Purchase of supplies and consumables 4,387 3,806 4,387 3,806 Communication expenses 781 725 781 725 Utilities 2,359 2,027 2,186 1,862 Minor equipment 1,214 794 1,214 794 Fees and charges 5,118 6,272 5,116 6,103 Contract and other services 12,499 12,375 12,497 12,375 Building repairs and maintenance 2,932 1,755 2,875 1,699 Cost of goods sold/distributed (ancillary trading) 184 131 184 131

Total supplies and services 29,474 27,885 29,240 27,495

(e) Other ExpensesGeneral expenses

Marketing and promotional expenses 1,982 2,463 1,982 2,449 Audit fees and services 23 152 182 131 166 Bad and doubtful debts from transactions 735 318 735 318 Staff development 577 579 577 579 Travel and motor vehicle expenses 1,031 920 1,031 921 Other expenses 2,465 3,373 2,405 3,247

Total other expenses 6,942 7,835 6,861 7,680

Operating lease rental expensesLease payments 3,001 2,739 3,001 2,739

Total operating lease rental expenses 3,001 2,739 3,001 2,739 Total other operating expenses 9,943 10,574 9,862 10,419

Page 29





2016 2015 2016 2015Note $'000 $'000 $'000 $'000

4 Other economic flows included in net result(a) Net gain/(loss) on non-financial assets

Revaluation of investment properties 5,514 8,135 5,350 5,000 Revaluation of cultural assets 3 25 3 25 Net gain/(loss) on disposal of physical assets 483 13 88 13 Total net gain/(loss) on non-financial assets and liabilities 6,000 8,173 5,441 5,038

(b) Net gain/(loss) on financial instrumentsNet gain/(loss) realised on disposal of financial investments - 4,959 - 4,651 Subtotal net gain/(loss) on financial investments - 4,959 - 4,651 Net gain/(loss) on financial liabilities at amortised cost (400) 776 (400) 776 Total net gain/(loss) on financial instruments (400) 5,735 (400) 5,427

5 Cash and depositsCash at bank and on hand 2,160 1,968 2,019 1,344 Treasury Corporation of Victoria at call 19,100 18,900 7,000 18,000 Australian Bank Term Deposits - 7,000 - -

Total cash and deposits 21,260 27,868 9,019 19,344

(a) Reconciliation to cash at the end of the year

Balances as above 21,260 27,868 9,019 19,344 Balance as per cashflow statement 21,260 27,868 9,019 19,344

6 ReceivablesCurrent receivablesContractual

Sale of goods and services ¹ 4,800 3,265 4,485 3,035 Other 10 12 10 12 Revenue receivable 10,592 6,191 10,529 6,118 Provision for doubtful contractual receivables (668) - (668) -

14,734 9,468 14,356 9,165 Statutory

GST receivable 441 101 441 92 Total current receivables 15,175 9,569 14,797 9,257

1

(a) Movement in provision for doubtful contractual receivablesBalance at the beginning of the year - - - - Increase in provision recognised in the net result 668 - 668 - Balance at end of the year 668 - 668 -

(b)

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

The average credit period for sales of goods and services and for other receivables is 30 days. No interest is charged on outstanding amounts. A provision has been made for estimated irrecoverable amounts from the sale of goods when there is objective evidence that an individual receivable is impaired.

Refer to note 29 (ii) for the nature and extent of credit risk arising from contractual receivables from related parties.

Page 30





2016 2015 2016 2015Note $'000 $'000 $'000 $'000

7 Investments

Current investmentsVictorian Funds Management Corporation - managed investments 63,504 42,265 63,504 42,265

Total equities and managed investments 63,504 42,265 63,504 42,265

Total current investments 63,504 42,265 63,504 42,265 Total investments 63,504 42,265 63,504 42,265

8 InventoriesCurrent

Supplies and consumables - at cost 66 74 66 74 Total current inventories 66 74 66 74

9 Other non-financial assetsCurrent other non-financial assetsPrepayments 2,629 2,396 2,593 2,356 Total current other non-financial assets 2,629 2,396 2,593 2,356 Total other non-financial assets 2,629 2,396 2,593 2,356

Page 31





2016 2015 2016 2015Note $'000 $'000 $'000 $'000

10 Investment propertiesAt Fair valueOpening balance at 1 January 86,676 30,965 65,910 10,260 Transfer of Investment property to property, plant and equipment (1,300) - (1,300) - Additions - 186 - - Transfer of certain Moorabbin land and buildings from property,plant and equipment - 50,650 - 50,650 Disposals and property held for sale - (3,260) - - Net gain/ (loss) from fair value adjustments 5,514 8,135 5,350 5,000 Closing balance at 31 December 90,890 86,676 69,960 65,910

10 (a) Non-current physical assets classified as held-for-sale

Opening balance at 1 January (Land and Buildings) 3,260 - - - Property held for Sale (3,260) 3,260 - - Closing balance at 31 December - 3,260 - -

(b)

Consolidated Investment Property details: Level 1 Level 2 Level 3

Classified in accordance with the fair value hierarchy, see Note 1

Carrying amount as at 31 Dec 2016

Quoted Prices

Observable Price Inputs

Un-observable Inputs

$'000 $'000 $'000 $'000128 Elizabeth Street, Melbourne 14,450 - 14,450 - 40 Bowen Street, Malvern East 1,330 - 1,330 - 13 Fletcher Street, Moorabbin 950 - 950 - 5 Ballinger Road, Horsham 3,920 - 3,920 - 3 Ballinger Road, Horsham 280 - 280 - Building 1 & 2 Moorabbin Campus 58,500 - 58,500 - 627-629 Waverley Road, Waverley 8,075 - 8,075 - 550 Warrigal Road, Chadstone 720 - 720 - 621 Warrigal Road, Chadstone 845 - 845 - 625 Warrigal Road, Chadstone 610 - 610 - 629 Warrigal Road, Chadstone 595 - 595 - 631 Warrigal Road, Chadstone 615 - 615 - Total Consolidated Investment Properties 90,890 - 90,890 -

Fair value measurement hierarchy as at 31 December 2016Fair value hierarchy

Page 32



Notes to the financial statements31 December 201610 Investment Properties (continued)

Institute Investment Property details: Level 1 Level 2 Level 3



Quoted Prices



$'000 $'000 $'000 $'000Buildings 1 & 2 Moorabbin Campus 58,500 - 58,500 - 627-629 Waverley Road, Waverley 8,075 - 8,075 - 550 Warrigal Road, Chadstone 720 - 720 - 621 Warrigal Road, Chadstone 845 - 845 - 625 Warrigal Road, Chadstone 610 - 610 - 629 Warrigal Road, Chadstone 595 - 595 - 631 Warrigal Road, Chadstone 615 - 615 - Total Institute Investment Properties 69,960 - 69,960 -

(c)

Consolidated Investment Property details: Level 1 Level 2 Level 3



Quoted Prices



$'000 $'000 $'000 $'000

128 Elizabeth Street, Melbourne 15,400 - 15,400 - 40 Bowen Street, Malvern East 1,100 - 1,100 - 13 Fletcher Street, Moorabbin 830 - 830 - 5 Ballinger Road, Horsham 3,250 - 3,250 - 3 Ballinger Road, Horsham 186 186Building 1 & 2 Moorabbin Campus 54,000 54,000627-629 Waverley Road, Waverley 7,500 - 7,500 - 14 Batesford Road, Chadstone 1,300 - 1,300 - 550 Warrigal Road Chadstone 610 - 610 - 621 Warrigal Road, Chadstone 805 - 805 - 625 Warrigal Road, Chadstone 565 - 565 - 629 Warrigal Road, Chadstone 570 - 570 - 631 Warrigal Road, Chadstone 560 - 560 - Total Consolidated Investment Properties 86,676 - 86,676 -

Fair value hierarchy

There were no changes in valuation techniques throughout the period to 31 December 2016The fair value of the Consolidated entity's investment properties at 31 December 2016 have been arrived at on the basis of an independent valuation carried out by independent valuers. The valuation was determined by reference to market evidence of transaction prices for similar properties with no significant unobservable adjustments, in the same location and condition and subject to similar lease and other contracts.

The Valuer General Victoria (VGV) appointed O'Briens Valuers & Property Consultants as the Institute's independent valuer.

Fair value measurement hierarchy as at 31 December 2015

There were no transfers between levels in 2016 (2015: no transfers)


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Notes to the financial statements31 December 201610 Investment Properties (continued)

Institute Investment Property details: Level 1 Level 2 Level 3



Quoted Prices



$'000 $'000 $'000 $'000

Buildings 1 & 2 Moorabbin Campus 54,000 54,000627-629 Waverley Road, Waverley 7,500 - 7,500 - 14 Batesford Road, Chadstone 1,300 - 1,300 - 550 Warrigal Road Chadstone 610 - 610 - 621 Warrigal Road, Chadstone 805 - 805 - 625 Warrigal Road, Chadstone 565 - 565 - 629 Warrigal Road, Chadstone 570 - 570 - 631 Warrigal Road, Chadstone 560 - 560 - Total Institute Investment Properties 65,910 - 65,910 -


Page 34




11 Property, plant and equipment

Land

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(a) Consolidated $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000At 1 January 2015- Cost - - - 7,168 3,800 - 2,888 2,386 2,621 18,863 - Valuation 61,950 237,738 2,271 - 2,942 415 - - 3,366 308,682 Accumulated depreciation - (15,402) (1,209) - (3,516) - (1,710) (1,702) (4,494) (28,033) Net book amount 61,950 222,336 1,062 7,168 3,226 415 1,178 684 1,493 299,512

Year ended 31 December 2015Opening net book amount 61,950 222,336 1,062 7,168 3,226 415 1,178 684 1,493 299,512 Additions - 4,962 - 360 78 - 678 150 229 6,457 Disposals - (94) (66) - (12) - (189) - - (361) Net revaluation increments/(decrements) 13,818 (2,815) - - - - - - - 11,003 Net gain/(loss) on non-financial assets - - - - - 25 - - - 25 Depreciation expense (1) - (6,871) (422) - (557) (4) (423) (223) (1,072) (9,572) Transfer to Investment Properties (19,700) (30,950) - - - - - - - (50,650) Transfer from assets under construction - 7,168 - (7,168) - - - - - - Closing net book amount 56,068 193,736 574 360 2,735 436 1,244 611 650 256,414

At 31 December 2015- Cost - - - 360 3,980 - 2,875 1,893 2,189 11,297 - Valuation 56,068 213,886 2,204 - 2,735 436 - - 3,367 278,696 Accumulated depreciation - (20,150) (1,630) - (3,980) - (1,631) (1,282) (4,906) (33,579) Net book amount 56,068 193,736 574 360 2,735 436 1,244 611 650 256,414

Year ended 31 December 2016Opening net book amount 56,068 193,736 574 360 2,735 436 1,244 611 650 256,414 Additions - 29 5,289 518 596 1,527 7,959 Disposals - - - - (38) (110) (148) Net gain/(loss) on non-financial assets - - - - - 3 - - - 3 Depreciation expense (1) (7,850) (410) - (479) (4) (420) (270) (413) (9,846) Transfer from Investment Properties 975 325 - - - - - - - 1,300 Transfer from assets under construction (9) 9 - Closing net book amount 57,043 186,240 164 5,640 2,745 435 1,310 341 1,764 255,682

At 31 December 2016- Cost - 29 - 5,640 4,364 - 2,895 1,893 3,716 18,537 - Valuation 57,043 214,211 2,204 - 2,735 435 - - 3,367 279,995 Accumulated depreciation - (28,000) (2,040) - (4,354) - (1,585) (1,552) (5,319) (42,850) Net book value at the end of the financial year 57,043 186,240 164 5,640 2,745 435 1,310 341 1,764 255,682

Notes(1) The useful lives of assets as stated in Note 1 are used in the calculation of depreciation as shown in note 3(b).

(2) The consolidated figures for property, plant and equipment are the same as the Institute as an individual entity.

(3) In accordance with government purpose classifications, the Institute's property, plant and equipment are assets used for the purpose of education. Property, plant and equipment includes all operational assets.

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11 Property, plant and equipment (continued)(b)

Classified in accordance with the fair value hierarchy, see Note 1Fair value hierarchy Fair value hierarchyLevel 1 Level 2 Level 3 Level 1 Level 2 Level 3

Carrying amount as at 31

Dec 2016

Quoted Prices


Un-observable Price Inputs

Carrying amount as at 31

Dec 2015

Quoted Prices


Un-observable Price Inputs

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Land 57,043 57,043 56,068 56,068Buildings 186,240 186,240 193,736 193,736Leasehold Improvements 164 164 574 574Plant and equipment 2,745 2,745 2,735 2,735Cultural assets 435 435 436 436Motor Vehicles 1,310 1,310 1,244 1,244Library 341 341 611 611Computer equipment 1,764 1,764 650 650

Total net book value 250,042 435 249,607 256,054 436 255,618

( c) Valuations of Property, Plant and Equipment

Land and buildings

Plant and equipment

Vehicles

Library and leasehold improvements

There were no changes in valuation techniques throughout the period to 31 December 2016.

For all assets measured at fair value, the current use is considered the highest and best use.

Library and leasehold improvements are held at cost less depreciation. As there is no evidence of a reliable market-based fair value (or other relevant fair value indicators) for leasehold improvements, depreciated cost is the fair value for these types of assets. The valuation of leasehold improvements is based on significant unobservable inputs and accordingly is classified as Level 3 assets.

The CSO adjustment is a reflection of the valuer's assessment of the impact of restrictions associated with an asset to the extent that is also equally applicable to market participants. This approach is in light of the highest and best use consideration required for fair value measurement, and takes into account the use of the asset that is physically possible, legally permissible, and financially feasible. As adjustments of CSO are considered as significant unobservable inputs, land is classified as Level 3 assets.

For the Institute's majority of buildings, the depreciated replacement cost method is used, adjusting for the associated depreciations. As depreciation adjustments are considered as significant, unobservable inputs in nature, buildings are classified as Level 3 fair value measurements.

An independent valuation of the Institute's land and buildings was performed by the Valuer General Victoria. The valuation was performed using the market approach adjusted for CSO. The effective date of the valuation was 31 December 2012.

Plant and equipment is held at fair value. When plant and equipment is specialised in use, such that it is rarely sold other than as part of a going concern, fair value is determined using the depreciated replacement cost method.

Vehicles are valued using the depreciated replacement cost method. Fair value is determined using the depreciated replacement cost.

The market approach is used for land, although it is adjusted for the community service obligation (CSO) to reflect the nature of the land being valued.

Fair value assessments have been performed at 31 December 2016 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 the Institute will be conducted in 2017.

Fair value measurement hierarchy for assets

2016 2015

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11 Property, plant and equipment (continued)

(d)Reconciliation of Level 3 fair value at 31 December 2016 L

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Opening Balance 56,068 193,736 574 2,735 1,244 611 650 Purchases (sales) 29 480 486 1,527 Transfer from assets under construction - 9 Transfer in (out) of Level 3 975 325 Depreciation (7,850) (410) (479) (420) (270) (413)Subtotal 57,043 186,240 164 2,745 1,310 341 1,764 Gains or losses recognised in other economic flows - other comprehensive income

Net Revaluation increment - - Closing Balance 57,043 186,240 164 2,745 1,310 341 1,764

(e) Description of significant unobservable inputs to Level 3 valuations

LandBuildingsLeasehold improvements Useful lifePlant and equipment Useful lifeMotor Vehicles Useful lifeLibrary Useful lifeComputer equipment Useful life

There were no changes in valuation techniques or significant unobservable inputs between 31 December 2015 and 31 December 2016.

Depreciated costDepreciated replacement costDepreciated replacement cost

Depreciated replacement costDepreciated replacement cost

Significant unobservable inputs

Community service obligation adjustmentUseful life of buildings

Valuation technique

Market approachDepreciated replacement cost

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12 Intangible assets

Computer Software Total$’000 $’000

ConsolidatedAt 1 January 2015Opening net book amount 1,202 1,202

Amortisation charge (170) (170) Net book amount 1,032 1,032

Year ended 31 December 2016Opening net book amount 1,032 1,032

Amortisation charge (169) (169) Closing net book amount 863 863

InstituteAt 1 January 2015Opening net book amount 1,202 1,202

Amortisation charge (170) (170) Net book amount 1,032 1,032

Year ended 31 December 2016Opening net book amount 1,032 1,032

Amortisation charge (169) (169) Closing net book amount 863 863

At 31 December 2015Cost 1,720 1,720

Accumulated amortisation and impairment (518) (518) Net book amount 1,202 1,202

At 31 December 2016Cost 1,720 1,720

Accumulated amortisation and impairment (857) (857) Net book amount 863 863

NoteSignificant intangible assetsThe Institute has capitalised software development expenditure for the development of its student management system. Its useful life is 10 years and will be fully amortised by 2022.

Page 38




2016 2015 2016 2015Note $'000 $'000 $'000 $'000

13 PayablesCurrentContractual

Supplies and services (1) 9,780 9,052 9,724 8,927 Revenue in advance 18,538 18,160 18,521 17,789

Total current payables 28,318 27,212 28,245 26,716

Notes

(a) Maturity analysis of contractual payables

14 Borrowings Non-Current

Advance from Government 5,533 5,424 5,533 5,424 Impact of revaluing at fair value (1,017) (1,417) (1,017) (1,417)

Total non-current borrowings 4,516 4,007 4,516 4,007

Total borrowings 4,516 4,007 4,516 4,007

(i) Maturity analysis of borrowings

(ii) Nature and extent of risk arising from borrowings

(iii) During the current and prior year, there were no defaults and breaches of any of the loans.

Please refer to Note 29 (iii) for the nature and extent of risks arising from contractual payables.

Please refer to Note 29 (iii) for the maturity analysis of borrowings

Please refer to Note 29 (iii) for the nature and extent of risks arising from borrowings.

InstituteConsolidated

(1) The average credit period is 30 days. No interest is charged on these payables over 30 days. (2) For an analysis of the sensitivity of payable to foreign currency risk refer to note 29 (iv).

Please refer to Note 29 (iii) for the maturity analysis of contractual payables.

(b) Nature and extent of risk arising from contractual payables

During 2014, the Institute entered into an agreement with the State Government of Victoria/Department of Education and Early Childhood Development (DEECD) and total Energy Solutions Pty Ltd for work to be carried out at the Institute's premises to reduce greenhouse gas emissions, energy costs and water use.

Under the agreement, DEECD agrees to make advances to the Institute up to $5.7M based on invoices paid to the supplier. The Advance is to be repaid over seven years, with the first instalment due on 15 December 2017. As at the 31 December 2016 the Institute has drawn down $5.533M. The agreement confirms that the advance constitutes a debt and payable by the Institute to DEECD with an interest rate of 0%.

Page 39




2016 2015 2016 2015Note $'000 $'000 $'000 $'000


15 ProvisionsCurrent ProvisionsEmployee benefits (a)Annual leave (a) Unconditional and expected to wholly settle within 12 months¹ 2,053 1,801 2,053 1,801 Long service leave (a) Unconditional and expected to wholly settle within 12 months¹ 745 660 745 660 Unconditional and expected to wholly settle after 12 months² 7,665 6,922 7,665 6,922 Sub total 10,463 9,383 10,463 9,383

Provision for on costs (a)Annual leave Unconditional and expected to wholly settle within 12 months¹ 320 280 320 280 Long service leave Unconditional and expected to wholly settle within 12 months¹ 117 103 117 103

1,197 1,041 1,197 1,041 Total current provisions 12,097 10,807 12,097 10,807

Non-current ProvisionsLong service leave

1,409 1,069 1,409 1,069 Long service leave - on costs

220 164 220 164 Total non-current provisions 1,629 1,233 1,629 1,233 Total provisions 13,726 12,040 13,726 12,040

Notes:1

2

(a) Employee benefits and on costsCurrent employee benefits

Annual leave 2,053 1,801 2,053 1,801 Long service leave 8,410 7,582 8,410 7,582

Subtotal 10,463 9,383 10,463 9,383

Non current employee benefitsLong service leave 1,409 1,069 1,409 1,069

Subtotal 1,409 1,069 1,409 1,069 Total employee benefits 11,872 10,452 11,872 10,452

Provision for on costs Current on costs 1,634 1,424 1,634 1,424 Non current on costs 220 164 220 164 Total on costs 1,854 1,588 1,854 1,588

Total employee benefits and on costs 13,726 12,040 13,726 12,040

Unconditional and expected to wholly settle after 12 months²

Conditional and expected to wholly settle after 12 months²

Conditional and expected to wholly settle after 12 months²

Employee benefits consist of annual leave, long service leave accrued by employees and staff redundancies. On costs such as payroll tax and workers' compensation insurance are not employee benefits and are reflected as a separate provision.Amounts are measured at present value.

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2016 2015 2016 2015Note $'000 $'000 $'000 $'000


16 Equity(a) Contributed Capital

Balance at 1 January 122,807 122,807 122,807 122,807 Balance at 31 December 122,807 122,807 122,807 122,807

(b) ReservesComposition of ReservesPhysical asset revaluation surplus

Land 59,012 59,012 59,012 59,012 Buildings 84,099 84,099 84,099 84,099

Plant and Equipment 1,202 1,202 1,202 1,202 Balance at 31 December 144,313 144,313 144,313 144,313

Movements in ReservesBalance at 1 January 144,313 133,310 144,313 133,310 Revaluation increment on non-current assets - 11,003 - 11,003

Balance at 31 December 144,313 144,313 144,313 144,313

LandBalance at 1 January 59,012 45,194 59,012 45,194 Revaluation increment on non-current assets - 13,818 - 13,818 Balance at 31 December 59,012 59,012 59,012 59,012

BuildingsBalance at 1 January 84,099 86,914 84,099 86,914

- (2,815) - (2,815) Balance at 31 December 84,099 84,099 84,099 84,099

Plant and EquipmentBalance at 1 January 1,202 1,202 1,202 1,202 Balance at 31 December 1,202 1,202 1,202 1,202

(c) Available for sale revaluation reserve*Balance at 1 January 265 8,043 265 7,680 Balance at beginning of financial year 265 8,043 265 7,680

- (3,084) - (3,029)

Transfer to profit and loss on sale of financial assets - (4,959) - (4,651) Subtotal 265 (8,043) 265 (7,680) Gain / (loss) on revaluation of Victorian Funds Management Corporation investments 1,239 265 1,239 265

Balance at 31 December 1,504 265 1,504 265

Revaluation decrement on non-current assets

The asset revaluation reserve for land comprises increments/(decrements) arising from revaluations every 5 years. The last valuation was 31/12/12.

Valuation gain/(loss) recognised on sale of financial assets

The asset revaluation reserve for buildings comprises increments/(decrements) arising from revaluations every 5 years. The last valuation was 31/12/12.

The asset revaluation reserve for plant and equipment comprises increments/(decrements) arising from revaluations every 5 years. The last valuation was 31/12/12.

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2016 2015 2016 2015Note $'000 $'000 $'000 $'000


16 Equity (continued)

(d) Accumulated surplus / (deficit)Balance at 1 January 118,910 103,535 86,504 74,355 Net operating result for the year 15,975 15,375 14,869 12,149 Balance at 31 December 134,885 118,910 101,373 86,504

Total equity 403,509 386,295 369,997 353,889

17 Cash flow information(a) Reconciliation of net result for the period

Net result for the year 15,975 15,375 14,869 12,149

Non cash movements:Depreciation and amortisation of non-current assets 10,015 9,742 10,015 9,742 Net (gain) / loss on sale of non-current assets (483) (13) (88) (13) Net (gain) / loss on disposal of financial investments - (4,959) - (4,651) Fair value gains on other non- financial assets (5,517) (8,160) (5,353) (5,025) Net (gain)/loss on financial liabilities at amortised cost 400 (776) 400 (776) Total non-cash flows in operating result 4,415 (4,166) 4,974 (723)

Movements in operating assets and liabilitiesDecrease / (increase) in trade receivables (5,606) (1,924) (5,540) (2,313) Decrease / (increase) in inventories 8 9 8 9 Decrease / (increase) in other assets (233) (1,081) (237) (1,047) Increase / (decrease) in payables 1,406 828 1,529 1,531 Increase / (decrease) in employee benefits 1,686 (791) 1,686 (791) Total movement in operating assets and liabilities (2,739) (2,959) (2,554) (2,611)

Net cash flow from/(used in) operating activities 17,651 8,250 17,289 8,815

* The available for sale revaluation reserve arises on the revaluation of available for sale financial assets. Where a revalued financial asset is sold that portion of the reserve which relates to that financial asset, and is effectively realised, is recognised in profit and loss. Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in profit and loss.

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2016 2015 2016 2015Note $'000 $'000 $'000 $'000


18 Commitments for expenditure

(a) Capital expenditure commitments payableCapital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:

Property, Plant and EquipmentPayable:

- Within one year 3,207 297 3,207 297 - Later than one year but not later than five years - - - -

Total Property, Plant and Equipment 3,207 297 3,207 297 GST reclaimable on the above (292) (27) (292) (27) Net Commitments Property, Plant and Equipment 2,915 270 2,915 270

(b) Non-cancellable operating lease commitments payableCommitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

- Within one year 1,842 2,569 1,842 2,569 - Later than one year but not later than five years 783 1,574 783 1,574

Total minimum lease payments in relation to non-cancellable operating leases 2,625 4,143 2,625 4,143

GST reclaimable on the above (239) (377) (239) (377)

Net commitments non-cancellable operating leases 2,386 3,766 2,386 3,766

(c) Other expenditure commitmentsCommitments for contracts relating to property service agreements (e.g. cleaning, waste management and security services) and licence agreements in existence at the reporting date but not recognised as liabilities,Payable:

- Within one year 6,779 2,937 6,779 2,937 - Later than one year but not later than five years 9,799 5,551 9,799 5,551

Total other expenditure commitments 16,578 8,488 16,578 8,488 GST reclaimable on the above (1,508) (772) (1,508) (772) Net commitments other expenditure commitments 15,070 7,716 15,070 7,716

The Institute leases certain land, buildings and equipment. These leases range in length with the shortest lease terminating one month from the 31 December 2016 and the longest lease terminating 4 years and 11 month from the 31 December 2016.

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2016 2015 2016 2015Note $'000 $'000 $'000 $'000


19 Leased Assets

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

Institute owned properties 90,890 86,676 69,960 65,910 Gross amount of leased assets 90,890 86,676 69,960 65,910

Operating lease receivablesPayments due

- Within one year 5,513 5,229 4,363 4,216 - Later than one year but not later than five years 21,243 20,876 16,907 16,391 - Later than five years 78,479 79,580 78,424 77,325

Net operating lease receivables 105,235 105,685 99,694 97,932

20 Contingent assets and contingent liabilities

Contingent Assets

Contingent Liabilities

21 Economic dependencyState government - contestable 42,567 36,072 42,567 36,072 State capital 5,000 1,000 5,000 1,000

47,567 37,072 47,567 37,072

22 Subsequent events

23 Remuneration of auditors

Remuneration of Victorian Auditor General's Office for: Audit of the financial statements 87 51 87 51 Audit of the financial statements of subsidiary 21 16 - - Total remuneration of Victorian Auditor-General's Office 108 67 87 51 Remuneration of other auditors : Other Assurance Services 44 115 44 115 Total remuneration of other auditors 44 115 44 115 Total Remuneration of Auditors 152 182 131 166

In 2016, Holmesglen Institute was dependent on 27.9% of Government Contributions - Operating compared to 23.4% in 2015. This level of dependency is common within the TAFE sector.

No matters or circumstances have arisen since the end of the reporting period which significantly affect the operations of the Institute, the result of those operations or the state of affairs of the Institute in future years.

The Institute has a number of employee and contractor legal proceedings as at 31 December 2016 (Nil 2015). The Institute is unable to quantify the financial impact of these contingent liabilities.

The Institute has no contingent assets at 31 December 2016 (2015: Nil)

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2016 2015 2016 2015Note $'000 $'000 $'000 $'000


24 Superannuation

Paid Contribution for the YearDefined benefit plans:

State Superannuation Fund – revised and new 336 438 336 438

Total defined benefit plans 336 438 336 438

Defined contribution plans:VicSuper 3,471 3,962 3,471 3,962 Other 2,497 2,415 2,497 2,415

Total defined contributions plans 5,968 6,377 5,968 6,377

Total paid contribution for the year 6,304 6,815 6,304 6,815

Contribution Outstanding at Year EndVarious Funds 666 922 666 922

Total 666 922 666 922

(a) The bases for contributions are determined by the various schemes.

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 it 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.

Superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the Comprehensive Operating Statement of the Institute.

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

Page 45




25 Responsible persons and executive officers

(i) Minister

(ii) Chief Executive

Mary Faraone appointed 1/10/2013.

(iii) Members of the Board of Holmesglen Institute

P. Lewinsky - Chair (re-appointed 1/7/16) B. Porter (re-appointed 1/7/16)M. Faraone, Chief Executive (appointed 1/7/16)A. Barker (re-appointed 1/7/16) C. Karamzalis (appointed 1/7/16)Emeritus Professor P. Darvall AO (re-appointed 5/8/16) C. Walsh (re-appointed 1/7/16)K. Corry (re-appointed 1/7/16) K. Bailey (appointed 1/7/16)J. Grant (appointed 1/7/16) A. Durrant (ceased 30/6/16)L. Morgan (appointed 1/7/16) N. Lucas (ceased 30/6/16)R. Leeming (ceased 30/6/16)

2016 2015No No

Income rangeThe number of board members whose remuneration from the Institute was within the specified bands are as follows:

Less than 9,999 2 3 10,000 - 19,999 6 - 20,000 - 29,999 1 1 30,000 - 39,999 5 6 60,000 - 69,999 1 1 Total number of board members 15 11 Total remuneration of board members ($'000) 371 302

In accordance with the directions of the Minister for Finance under the Financial Management Act 1994 , the following disclosures are made regarding responsible persons and executive officers for the reporting period.

The relevant Minister was The Hon. Steve Herbert, MP, Minister for Training and Skills for the period 1 January 2016 to 9 November 2016. The Hon. Gayle Tierney MLC commenced as the Minister for Training and Skills effective from 9 November 2016.

Remuneration of the Minister for Higher Education and Skills 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.

Remuneration of the board members in connection with the management of the Institute is disclosed below:

D. Cleland (appointed 5/8/16)

Remuneration received or receivable by the Chief Executive in connection with the management of the Institute during the period is included in note 25 (iv).

Page 46




25

(iv) Executive Officers

Income range 2016 2015 2016 2015

The number of executive officers whose total remuneration from the Institute exceeded $100,000, separately identifying base remuneration and total remuneration, disclosed within the income band of $10,000 in a table format: No No No No

100,000 - 109,999 - 1 - 1 110,000 - 119,999 - - - - 130,000 - 139,999 - 1 - 2 140,000 - 149,999 1 1 2 - 150,000 - 159,999 - 1 - 1 160,000 - 169,999 4 6 4 7 170,000 - 179,999 5 - 4 - 180,000 - 189,999 - 2 - 2 190,000 - 199,999 2 - 2 - 200,000 - 209,999 - 1 - 1 210,000 - 219,999 2 1 2 1 220,000 - 229,999 2 1 2 1 240,000 - 249,999 - 1 - - 270,000 - 279,999 - - 1 1 300,000 - 309,999 1 1 - -

Total number of executive officers 17 17 17 17 Total annualised employee equivalent (AEE) 16.5 17 16.5 17 Total amount of remuneration ($'000) 3,241 3,172 3,182 2,982

Related party transactions

Other transactions

Payment to other personnel

Responsible persons and executive officers (Continued)

The number of executive officers, including the chief executive officer, and their total remuneration during the reporting period are shown in the table below in their relevant income bands.

The base remuneration of executive officers is shown in the fourth and fifth columns. Base remuneration is exclusive of bonus payments, long service leave, redundancy payments and retirement benefits.

The total annualised employee equivalent provides a measure of full time equivalent executive officers over the reporting period.

Remuneration of the executive officers is disclosed below.

Total Remuneration Base Remuneration

There were no related party transactions other than transactions referred to in note 26.

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

There were no contractors charged with significant management responsibilities to whom the total expenses paid by the Institute exceeded $100,000 per person.

Page 47




26 Related partiesKey management personnelDisclosures relating to directors and specified executives are set out in note 25.

Loans to/from related parties 2016 2015 2016 2015Note $'000 $'000 $'000 $'000

Loans to subsidiariesBeginning of the year - - - 5,000 Loans repaid - - - (5,000) End of year - - - -

No provisions for doubtful debts have been raised in relation to any outstanding balances, and no expense has been recognised in respect of bad or doubtful debts due from related parties.

Other transactions

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

27 Subsidiaries and other related partiesThe consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries and other related parties in accordance with the accounting policy described in note 1.04.

Class of

sharesEquity

holdingEquity

holding2016 2016 2015

Name of entity % %Holmesglen International Training Services Pty Ltd. Ordinary 100 100Glenuc Pty. Ltd. Ordinary 100 100Holmesglen Foundation

28 Institute details

The registered office of the Institute is:


The principle place of business is:

Cnr Batesford and Warrigal RoadsHolmesglen, Victoria, 3148.

Australia

Country of incorporation

Australia


Page 48




29 Financial instruments

Financial risk management(i) Financial risk management objectives and policies

Carrying amount of financial assets by category: 2016 2015 2016 2015Note $'000 $'000 $'000 $'000

(a) Cash and Deposits 5 21,260 27,868 9,019 19,344 (b) Receivables¹:

Trade receivables 6 4,800 3,265 4,485 3,035 6 10 12 10 12

26,070 31,145 13,514 22,391

(c) Available-for-sale financial assets

Equities and managed investment schemes 7 63,504 42,265 63,504 42,265 Total available -for-sale financial assets 63,504 42,265 63,504 42,265


(d) Financial liabilities Payables¹ 13 9,780 9,052 9,724 8,927 Advance from Government 14 4,516 4,007 4,516 4,007 Total financial liabilities 14,296 13,059 14,240 12,934

Note:1 Receivables and payables disclosed here exclude statutory receivables and statutory payables.

The carrying amounts of the Institute's contractual financial assets and financial liabilities by category are disclosed below:


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 principal financial instruments comprise cash assets, term deposits, receivables (excluding statutory receivables), investment in equities and managed investments and payables (excluding statutory payables).

Total cash, deposits and receivables

Investment and other financial assets:

The Institute's activities expose it to a variety of financial risks: market risk (including foreign currency risk, 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 across the Institute in accordance with the Risk Management Policy and Plan approved by the Board. The Finance Department identifies, evaluates and manages financial risks in close co‑operation with the Institute's operating units. 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 and investment of excess liquidity.

Other receivables

Page 49




29 Financial instruments

Financial risk management

Financial risk management objectives and policies (continued)

•

•

•

2016 2015 2016 2015Net holding gain/(loss) on financial instruments by category Note $'000 $'000 $'000 $'000

(a) Net holding gain/(loss)Net gain/(loss) on disposal of financial assets in net result 4 (b) - 4,959 - 4,651 Net holding gain/(loss) - financial assets 4 (b) - 4,959 - 4,651 Financial liabilities at amortised cost 4 (b) (400) 776 (400) 776 Net holding gain/(loss) - financial liabilities (400) 776 (400) 776 Total net holding gain/(loss) (400) 5,735 (400) 5,427

(b) Interest Income/(expense)Financial assets available -for-sale recognised in net result 2 (c) 612 889 428 406 Interest income/(expense) - financial assets 612 889 428 406 Financial liabilities at amortised cost 3 (c) - (993) - - Interest income/(expense) - financial liabilities - (993) - - Total interest income/(expense) 612 (104) 428 406

(c) Fee Income/(expense)Financial assets available -for-sale recognised in net result 2 (d) 2,172 2,354 2,172 2,119 Fee income/(expense) - financial assets 2,172 2,354 2,172 2,119 Total fee income/(expense) 2,172 2,354 2,172 2,119


for cash and cash equivalents, loans or receivables and available-for-sale financial assets, the net gain or loss is calculated by taking the movement in the fair value of the asset, the interest income, plus or minus foreign exchange gains or losses arising from revaluation of the financial assets, and minus any impairment recognised in the net for financial liabilities measured at amortised cost, the net gain or loss is calculated by taking the interest expense, plus or minus foreign exchange gains or losses arising from the revaluation of financial liabilities measured at amortised cost; andfor financial asset and liabilities that are designated at fair value through profit or loss, the net gain or loss is calculated by taking the movement in the fair value of the financial asset or liability.

The net holding gains or losses are determined as follows:

The net holding gains or losses of the Institute's contractual financial assets and financial liabilities by category are disclosed below.

Page 50




29 Financial instruments (continued)

(ii) Credit risk

•• If a student fails to meet his repayment obligations the student's enrolment is suspended and all results are withheld

Credit risk arises from the contractual financial assets of the Institute, which comprise cash and deposits, non-statutory receivables, available-for-sale contractual financial assets and derivative instruments. The Institute’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the Institute. Credit risk is measured at fair value and is monitored on a regular basis by Institute management.

The Institute minimises concentrations of credit risk in relation to trade accounts receivable by undertaking transactions with a large number of customers. The majority of customers are concentrated in Australia. The major customers relate to the provision of Vocational Education and Training services to industry and the community. The Institute continues to provide training, consultancy and other services for these customers who adhere to industry trade terms.

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

In addition, the Institute does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. The Institute’s policy is to only deal with banks with high credit ratings.

Provision of impairment for contractual financial assets is recognised when there is objective evidence that the Institute will not be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 90 days overdue, and changes in debtor credit ratings.

The carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents the Institute’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

There are no material financial assets which are individually determined to be impaired. Currently the Institute does not hold any collateral as security nor credit enhancements relating to any of its financial assets.

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

A schedule of repayment is agreed with the student at the time of making an application for a payment plan

Page 51





(ii) Credit risk (continued)Credit quality of contractual financial assets that are neither past due nor impaired 1

Consolidated

Financial institutions (AA- rating)

Government agencies

(AAA rating)

Other counter-

party Total

$'000 $'000 $'000 $'00021,260 - - 21,260

Receivables - - 4,810 4,810 Investments and other financial assets - 63,504 - 63,504 Total contractual financial assets 2016 21,260 63,504 4,810 89,574

8,968 18,900 - 27,868 Receivables - - 3,277 3,277 Investments and other financial assets - 42,265 - 42,265 Total contractual financial assets 2015 8,968 61,165 3,277 73,410

Note1

Institute

Financial institutions (AA- rating)

Government agencies

(AAA rating)

Other counter-

party Total

$'000 $'000 $'000 $'0009,019 - - 9,019

Receivables - - 4,495 4,495 Investments and other financial assets - 63,504 - 63,504 Total contractual financial assets 2016 9,019 63,504 4,495 77,018

1,344 18,000 - 19,344 Receivables - - 3,047 3,047 Investments and other financial assets - 42,265 - 42,265 Total contractual financial assets 2015 1,344 60,265 3,047 64,656

Note1

Cash and deposits

2015Cash and deposits

The total amounts exclude statutory amounts (e.g. amounts owing to/from Victorian Government, GST input tax credit recoverable and taxes payable).

Cash and deposits

2016

2016

2015Cash and deposits


Page 52





(ii) Credit risk (continued)

Ageing analysis of financial assets

Consolidated Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years

$'000 $'000 $'000 $'000 $'000 $'000 $'000

Receivables1:Trade receivables 4,800 315 764 1,448 2,273 - - Revenue receivablesOther receivables 10 10 - - - - - Loans to related parties

Investment and other financial assets:Equities and managed investments 63,504 63,504 - - - - -

Total 2016 financial assets 68,314 63,829 764 1,448 2,273 - -

Receivables1:Trade receivables 3,265 2,674 586 5 - - Other receivables 12 12 - - - - -


Total 2015 financial assets 45,542 42,277 2,674 586 5 - - Note

1

2016 Financial assets



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 tables discloses the ageing analysis for financial assets:

Carrying amount

Not past due and

not impaired

Past due but not impairedImpaired financial

assets

Page 53





(ii) Credit risk (continued)Ageing analysis of financial assets (continued)

Institute Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years

$'000 $'000 $'000 $'000 $'000 $'000 $'000

Receivables1:Trade receivables 4,485 764 1,448 2,273 - - Other receivables 10 10 - - - - -


Total 2016 financial assets 67,999 63,514 764 1,448 2,273 - -

Receivables1:Trade receivables 3,035 2,444 586 5 - - Other receivables 12 12 - - - - -


Total 2015 financial assets 45,312 42,277 2,444 586 5 - - Note

1 The total amounts exclude statutory amounts (e.g. amounts owing to/from Victorian Government, GST input tax credit recoverable and taxes payable).

Impaired financial

assets



Carrying amount

Not past due and

not impaired

Past due but not impaired

Page 54





(iii) Liquidity risk

Maturity analysis of financial liabilities

Consolidated Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years

5+ years

$'000 $'000 $'000 $'000 $'000 $'000 $'000

Payables1:Supplies and services 9,780 9,780 9,780 - - - -

BorrowingsAdvances from government 4,516 5,533 - - - 5,533 -

Total 2016 financial liabilities 14,296 15,313 9,780 - - 5,533 -


BorrowingsAdvances from government 4,007 5,424 - - 815 4,609 -

Total 2015 financial liabilities 13,059 14,476 9,052 - 815 4,609 - Note

1

Institute Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years

5+ years

$'000 $'000 $'000 $'000 $'000 $'000 $'000


BorrowingsAdvances from government 4,516 5,533 - - 5,533 -

Total 2016 financial liabilities 14,240 15,257 9,724 - - 5,533 -


BorrowingsAdvances from government 4,007 5,424 - - 815 4,609 -

Total 2015 financial liabilities 12,934 14,351 8,927 - 815 4,609 - Note

1

2015 Financial liabilities


• careful maturity planning of its financial obligations by matching the maturity profiles of financial assets and liabilities, and continuously

The Institute’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and the current assessment of risk. Cash for unexpected events is generally sourced from the Institute's cash and current investments.

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

The following tables discloses the contractual maturity analysis for the financial liabilities.

Carrying amount

Nominal amount

Maturity dates





Carrying amount

Nominal amount

Maturity dates

Liquidity risk is the risk that the Institute would be unable to meet its financial obligations as and when they fall due. The Institute settles financial obligations within 30 days from date of invoice.

The Institute’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet.

The responsibility for liquidity risk management rests with the Institute's Board, 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 an adequate level of reserves and uncommitted funds that can be drawn at short notice to meet its short-term obligations;• holding investments and other contractual financial assets that are readily tradeable in the financial markets; and

monitoring forecast and actual cash flows.

Page 55





(iv) Market risk

Foreign currency risk

Interest rate risk

The Institute has minimal exposure to foreign currency risk.

The Institute in its daily operations is exposed to a number of market risks. Market risks relate to the risk that market rates and prices will change and that this will have an adverse affect on the operating result and/or net worth of the Institute. e.g. an adverse movement in interest rates or foreign currency exchange rates.

The Institute’s exposures to market risk are primarily through foreign currency risk, interest rate risk and equity price risk. Objectives, policies and processes used to manage each of these risks are disclosed below.

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.

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.

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

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.

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, or cause a fluctuation in the fair value of the financial instruments.

Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market interest rates. The Institute does not hold any interest bearing financial instruments that are measured at fair value, and therefore has no exposure to fair value interest rate risk.

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Institute has minimal exposure to cash flow interest rate risk through its cash and deposits that are at floating rate.

The Institute manages cash flow interest rate risk through a mixture of short term and longer term investments. Management monitors movement in interest rates on a daily basis.

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

The exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities are set out in the financial instrument composition and maturity analysis tables below:

Page 56





Consolidated

Floating interest

rate

Fixed interest

rate

Non-Interest Bearing

% $'000 $'000 $'000 $'000Financial assetsCash at bank and on hand 0.50% 2,160 2,160 - - Deposits at call 1.78% 19,100 - 19,100 - Receivables1:

Trade receivables 4,800 - - 4,800 Other receivables 10 - - 10

Investment and other financial assets:Equities and managed investments 63,504 63,504 - -


Financial liabilitiesPayables1:

Supplies and services 9,780 - - 9,780 Borrowings

Advances from government 4,516 - - 4,516 Total financial liabilities 14,296 - - 14,296

Consolidated

Floating interest

rate

Fixed interest

rate


% $'000 $'000 $'000 $'000Financial assetsCash at bank and on hand 0.50% 1,968 1,968 - - Deposits at call 1.95% 18,900 - 18,900 - Term deposits 2.50% 7,000 - 7,000 - Receivables1:







Note1

Financial instrument composition and interest rate exposure Weighted

average effective rate

Total Carrying Amount per

Balance Sheet

Interest rate exposure

2016

Weighted average

effective rate


Balance Sheet


2015

Receivables and payables exclude statutory receivables and statutory payables (e.g. amounts owing to/from Victorian Government, GST input tax credit recoverable and taxes payable).

Page 57





Financial instrument composition and interest rate exposure

Institute

Floating interest

rate

Fixed interest

rate








Advances from government 4,516 4,516 Total financial liabilities 14,240 - - 14,240

Institute

Floating interest

rate

Fixed interest

rate









Note1

Equity price risk

2015

Receivables and payables exclude statutory receivables and statutory payables (e.g. amounts owing to/from Victorian Government, GST input tax credit recoverable and taxes payable).


2016

Weighted average

effective rate


Balance Sheet


There has been no other 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 equity price risk through its investments with the Victorian Funds Management Corporation (VFMC). The VFMC monitors performance and manages the equity price risk through diversification of its investment portfolio.

Weighted average

effective rate


Balance Sheet

Page 58


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Pag

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29 Financial instruments (continued)(vi) Fair value estimation

Consolidated Carrying Amount

Net Fair Value

Carrying Amount

Net Fair Value

$’000 $’000 $’000 $’000Financial assets

Cash and cash equivalents - Cash at bank 2,160 2,160 1,968 1,968 Cash and cash equivalents - Deposits at call 19,100 19,100 18,900 18,900 Term deposits - - 7,000 7,000

Receivables1:4,800 4,800 3,265 3,265

10 10 12 12 Investment and other financial assets:

63,504 63,504 42,265 42,265 Total financial assets 89,574 89,574 73,410 73,410


Supplies and services 9,780 9,780 9,052 9,052 Borrowings

Advances from government 4,516 4,516 4,007 4,007 Total financial liabilities 14,296 14,296 13,059 13,059

Note1

the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

based on observable market data (unobservable inputs).

Trade receivablesOther receivables


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

Fair values of financial instrument asset and liabilities are determined using the fair value hierarchy that categorises the inputs to valuation techniques used to measure fair value into three levels 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

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not

The Institute considers that the carrying amount of trade receivables and payables is a reasonable approximation of their fair values due to the short-term nature of trade receivables and payables.

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:

2016 2015

that the Institute can access at the measurement date.

Equities and managed investments

Page 61





(vi) Fair value estimation (continued)

Institute Carrying Amount

Net Fair Value

Carrying Amount

Net Fair Value

$’000 $’000 $’000 $’000Financial assets

Cash and cash equivalents - Cash at bank 2,019 2,019 1,344 1,344 Cash and cash equivalents - Deposits at call 7,000 7,000 18,000 18,000

Receivables1:4,485 4,485 3,035 3,035

10 10 12 12 Investment and other financial assets:

Equities and managed investments 63,504 63,504 42,265 42,265 Total financial assets 77,018 77,018 64,656 64,656


Supplies and services 9,724 9,724 8,927 8,927 Borrowings

Advances from government 4,516 4,516 4,007 4,007 Total financial liabilities 14,240 14,240 12,934 12,934

Note1

Level 1 Level 2 Level 3

Quoted Prices



Consolidated $’000 $‘000 $‘000 $‘000Investment and other financial assets:

Managed Investments - Victorian Funds Management Corp. 63,504 63,504 - - Total financial assets 63,504 63,504 - -


Quoted Prices



Institute $’000 $‘000 $‘000 $‘000Investment and other financial assets:

Equities and managed investments 63,504 63,504 - - Total financial assets 63,504 63,504 - -

Other receivables

2016 2015


Trade receivables

The fair value of financial assets and liabilities recognised in the balance sheet are categorised into the following fair value hierarchy levels:

Fair value hierarchyCarrying

amount as at 31 December

2016

Fair value hierarchy Carrying

amount as at 31 December

2016

Page 62





(vi) Fair value estimation (continued)

Level 1 Level 2 Level 3 Quoted

Prices Observable Price Inputs


Consolidated $’000 $‘000 $‘000 $‘000


Total financial assets 42,265 42,265 - -


Quoted Prices


Un-observable

Inputs Institute $’000 $‘000 $‘000 $‘000


Total financial assets 42,265 42,265 - -



Carrying amount as at 31 December

2015

There have been no transfers between levels during the period.

Carrying amount as at 31 December

2015

Page 63


STATEMENT OF PERFORMANCE

STATEMENT OF PERFORMANCE FOR YEAR ENDING 31ST DECEMBER 2016

Indicator title Description and methodology Metric 2016

Target2016

ActualExplanation of

variancesPrior year

result

Training Revenue diversity

Breakdown of training revenue split by Government funded and Fee for ServiceTraining revenue split by:• Victorian Training Guarantee (VTG)• Fee for Service (FFS)

Percentage32.0%

68.0%

34.9%

65.1%

Growth in VTG enrolments resulted

in an increase in VTG training

revenue.

30.7%

69.3%

Employment costs as a proportion of training revenue *

Employment and Third Party training delivery costs as a proportion of training revenue (VTG and FFS)Employment costs + 3rd party training delivery costs / Training Revenue

Percentage 74.0% 76.4%

A significant reduction in

employment costs as a proportion of

training revenue was achieved for 2016.

81.4%

Training revenue per teaching FTE*

Training Revenue (excl. revenue delivered by third parties) per Teaching FTETraining revenue (excl. revenue delivered by 3rd parties) / Teaching FTEs

Dollars $213,034 $195,111

Training revenue per Teaching FTE lower than target due to lower demand for

fee for service VET programs.

$215,128

Operating margin percentage

Operating margin %EBIT (excl. capital contributions) / Total Revenue (excl. capital contributions)

Percentage 0.3% 3.6% Target achieved 0.9%

KPIs against the 2016 Statement of Corporate Intent

Grow market share

Growth in VTG enrolments(Number of students)

Percentage 2% 5% Target achieved -10%

Growth in non – VTG enrolments(Number of enrolments)

Percentage 5% - 16.1%

The reduction in non – VTG enrolments was due to lower demand for fee for service VET

programs.

-12.25%

Growth in higher education EFTSL (including partner delivery)

Percentage > 5% 18% Target achieved 10%

Develop a high performing workplace culture

Higher Education student overall satisfaction(Graduate outcome survey)


VET student overall satisfaction(Learner questionnaire)


Overall Job Satisfaction scale Percentage > 56% 59% Target achieved 56%

Engagement IndexIndex score

Score > 60% 61% Target achieved 60%

Develop a high performing workplace culture

Two interfaculty collaborative projects(Actual projects)

Number of Projects

2 2 Target achieved n/a **

Reduced number of staff on long term stress leaveNumber of

staff< 5 5 No reduction

achieved 5

Decrease in number ofstaff complaints

Number of complaints

n/a 14 Target not achieved 11

Improved audit resultsCertification against AS/NZ4801 – Occupational health and safety management systems.

Non-conformance

issues0 0

Continuing certification against

AS/NZ4801 standard was

achieved with no non-conformances.

0

PACCT Agreement signed off by all partiesSigned

agreementSigned

agreementNo

Agreement delayed and currently with government for

approval

No

Enhance our position and reputation

Increase in website hits(Website traffic sessions)

Percentage 10% -2.2%

Total website traffic decreased compared to the previous year, however, the

pipeline of potential students generated through the website has improved over the same period with a 14 percent

increase

n/a **

Two new research projects Number 2 2 Target achieved n/a **

Two new collaborative or partnership opportunities(Number of Memorandums of Understanding signed)

Number 2 3 Target exceeded n/a **


Note: Account groupings (e.g. employment costs, training revenue etc.) included in the table above are prescribed by the official Department of Education and Training (DET) financial account structure, and are in line with the quarterly financial data submission template provided by DET for completion by TAFE institutes. Prior year actuals for employment costs have been restated to exclude termination payments made during the year. Prior year actuals for training revenue per FTE have also been restated for a change in the methodology used to calculated casual teaching FTEs.* No target established for 2016 ** New KPI for 2016 Statement of Corporate Intent and no comparable data available

Indicator title Description and methodology Metric 2016

Target2016

ActualExplanation of

variancesPrior year

result

KPIs against the 2016 Statement of Corporate Intent (Continued)

Improve business systems and processes

SMS Functionality meets benchmark(Number of planned upgrades)

Number of upgrades

2 2 2 SMS version upgrades achieved n/a **

Increased productivity across the InstituteEmployment costs as a proportion of training revenue)

Percentage 74.0% 76.4%

A significant reduction in

employment costs as a proportion of

training revenue was achieved for 2016.

81.4%

Improve financial performance

Efficiency in expenditure Reduction in expenditure as a proportion of revenue

Percentage < - 5% - 5.9% Target exceeded - 9.5%

Ratio of government funding to commercial fundingGovernment funding as % of total revenue

Percentage 50% 38%

Government funding has increased as a % of total

revenue due to an improvement in VTG enrolments and a

reduction in fee for service VET training

revenue.

35%

Positive EBITDA margin (excluding capital contributions)

Percentage > 0% 10.4% Target achieved 7.2%

Plan infrastructure requirements

No serious IT incidents(Unplanned outages > 1 day)

Number of incidents

0 0 Target achieved 0

Improved student /client satisfaction survey results on IT

Survey result

n/a * n/a * Not measured in 2016 n/a **

Decrease in complaints relating to IT or infrastructure from 2015

Number of complaints

n/a * n/a * Not measured in 2016 n/a **

Increase usage of facilities student contact hours per gross square meter

Ratio > 50 49.3

Usage decreased for 2016 due to lower fee for service VET

training delivery

50.9

New commercial venture at Waverley campus No metricSigned

agreementn/a *

Two proposals received during

2016.n/a **

Meet funding agreement requirements for Moorabbin Hub

No metric n/a n/a

The Moorabbin Student Hub will be completed and all funding agreement

requirements met in 2017.

n/a **

Enhance Industry collaboration and engagement

Improved employer survey result Percentage No metricNot yet

reportable

Employer Survey is conducted the

following yearn/a **

100 | Annual Report 2016Financial Report

Item Number

Source SUMMARY OF REPORTING REQUIREMENTPage

number

REPORT OF OPERATIONS

CHARTER AND PURPOSE

1 FRD 22G Manner of establishment and the relevant Minister 4, 77

2 FRD 22G Purpose, functions, powers and duties linked to a summary of activities, programs and achievements 4-15

3 FRD 22G Nature and range of services provided including communities served 4-7, 10-15

MANAGEMENT AND STRUCTURE

4 FRD 22G Organisational structure and chart, including responsibilities 7-9

5 FRD 22G Names of Board members 8, 77

FINANCIAL AND OTHER INFORMATION

6 FRD 03A Accounting for Dividends 59

7 FRD 07A Early adoption of authoritative accounting pronouncements NA

8 FRD 10 Disclosure Index 100-102

9 FRD 17B Long Service leave and annual leave for employees 52, 71

10 FRD 20A Accounting for State motor vehicle lease arrangements prior to 1 Feb 2004 NA

11 FRD 22G Operational and budgetary objectives, performance against objectives and achievements 16, 98-99

12 FRD 22GOccupational health and safety statement including performance indicators, performance against those indicators. Reporting must be on the items listed at (a) to (e) in the FRD

22

13 FRD 22GWorkforce data for current and previous reporting period including a statement on employment and conduct principles and that employees have been correctly classified in the workforce data collections

23

14 FRD 22G Summary of the financial results for the year including previous 4 year comparisons 16

15 FRD 22G Summary of significant changes in financial position 5, 6, 16, 33

16 FRD 22GKey initiatives and projects, including significant changes in key initiatives and projects from previous years and expectations for the future

10, 14-16

17 FRD 22G Post-balance sheet date events likely to significantly affect subsequent reporting periods 75

18 FRD 22G Summary of application and operation of the Freedom of Information Act 1982 17

19 FRD 22G Discussion and analysis of operating results and financial results 5, 6, 16

20 FRD 22G Significant factors affecting performance 5, 6, 16

21 FRD 22GWhere a TAFE has a workforce inclusion policy, a measurable target and report on the progress towards the target should be included

23-24

22 FRD 22GSchedule of any government advertising campaign in excess of $100,000 or greater (exclusive of GST) include list from (a) – (d) in the FRD

21

23 FRD 22G Statement of compliance with building and maintenance provisions of the Building Act 1993 17-18

24 FRD 22G Statement, where applicable, on the implementation and compliance with the National Competition Policy 19

25 FRD 22G Summary of application and operation of the Protected Disclosure Act 2012 18

26FRD 22G and FRD

24CSummary of Environmental Performance including a report on office based environmental impacts 24-27

27 FRD 22G

Consultants:Report of Operations must include a statement disclosing each of the following1. Total number of consultancies of $10,000 or more (excluding GST)2. Location (eg website) of where details of these consultancies over $10,000 have been made publicly available 3. Total number of consultancies individually valued at less than $10,000 and the total expenditure for the

reporting periodAND for each consultancy more than $10,000, a schedule is to be published on the TAFE institute website listing:• Consultant engaged • Brief summary of project• Total project fees approved (excluding GST)• Expenditure for reporting period (excluding GST)• Any future expenditure committed to the consultant for the project

20

The Annual Report will be available on Institute

website once approved

28FRD 22G

Statement, to the extent applicable, on the application and operation of the Carers Recognition Act 2012 (Carers Act), and the actions that were taken during the year to comply with the Carers Act

18

29FRD 22G

List of other information available on request from the Accountable Officer, and which must be retained by the Accountable Officer (refer to list at (a) – (l) in the FRD)

21

DISCLOSURE INDEX


Item Number


number

30 FRD 22G

An entity shall disclose the following in the Report of Operations:a) Total entity ICT Business As Usual (BAU) expenditure for the full 12 months reporting period; andb) Total entity ICT Non-Business As Usual expenditure for the full 12 months reporting period; and provide a breakdown for: (i) Operational expenditure (OPEX); and (ii) Capital expenditure (CAPEX)

20

31 FRD 25B Victorian Industry Participation Policy Disclosures 18-19

32 FRD 26A Accounting for VicFleet motor vehicle lease arrangements on or after 1 February 2004 NA

33 FRD 29AWorkforce Data Disclosures on the public service employee workforce. Note: TAFEs must report on a calendar year basis (i.e. not financial year basis).

23

34 SD 3.7.1The Responsible Body must ensure that the Agency applies the Victorian Government Risk Management Framework.

21

35 FRD 22G An entity’s report of operations shall contain general and financial information, including other relevant information, outlining and explaining an entity’s operations and activities for the reporting period.

4-27

36 SD 5.2.1(a)The Accountable Officer must implement and maintain a process to ensure the Agency’s Annual Report is prepared in accordance with the FMA, these Directions, the Instructions, applicable Australian Accounting Standards and Financial Reporting Directions.

32

37 SD 5.2.3 The Report of Operations must be signed and dated by the Responsible Body or a member of the Responsible Body 4, 32, 97

38CG 10

w(clause 27)Major Commercial Activities 21

39CG 12

(clause 33)Controlled Entities 9, 16

FINANCIAL REPORT

FINANCIAL STATEMENTS REQUIRED UNDER PART 7 OF THE FINANCIAL MANAGEMENT ACT 1994

40 SD 5.2.2(b)The financial statements have been prepared in accordance with applicable requirements in the FMA, the Directions, the Financial Reporting Directions and Australian Accounting Standards.

38

OTHER REQUIREMENTS UNDER STANDING DIRECTION 4.2 / FINANCIAL MANAGEMENT ACT 1994 (FMA)

41SD 5.2.2(a)

andFMA s 49

An Agency’s financial statements must include a signed and dated declaration by:• the Accountable Officer;• subject to Direction 5.2.2(c), the CFO; and• for Agencies with a statutory board or equivalent governing body established by or under statute, a member of

the Responsible Body.

32

42 FRD 30C Rounding of amounts 54

43SD

3.2.1.1(c)

The Responsible Body must establish an Audit Committee to:• review annual financial statements and make a recommendation to the Responsible Body as to whether to

authorise the statements before they are released to Parliament by the Responsible Minister7-8

OTHER REQUIREMENTS AS PER FINANCIAL REPORTING DIRECTIONS IN NOTES TO THE FINANCIAL STATEMENTS

44 FRD 11A Disclosure of ex-gratia payments NA

45 FRD 21BDisclosures of Responsible Persons, Executive Officer and Other Personnel (Contractors with significant management responsibilities) in the Financial Report

77-78

46 FRD 102 Inventories 48-49, 62

47 FRD 103F Non-financial physical assets34, 49-50,

66-68

48 FRD 104 Foreign currency 54

49 FRD 105A Borrowing costs NA

50 FRD 106 Impairment of assets 48

51 FRD 107A Investment properties 50, 63-65

52 FRD 109 Intangible assets 51, 69

53 FRD 110 Cash flow statements 36

54 FRD 112D Defined benefit superannuation obligations 76

55 FRD 113A Investment in subsidiaries, jointly controlled entities and associates 79

56 FRD 114A Financial instruments – general government entities and public non-financial corporations 80-94

57 FRD 119A Transfers through contributed capital 54, 72

58 FRD 120I Accounting and reporting pronouncements applicable to the reporting period 55-58

102 | Annual Report 2016Financial Report

Requests for further information under the provisions of the Freedom of Information Act should be directed to:

Freedom of Information OfficerHolmesglenPO Box 42Holmesglen VIC 3148

Further copies of the annual report and other corporate publications can be obtained from:

Holmesglen Marketing DepartmentPO Box 42Holmesglen VIC 3148

Item Number


number

COMPLIANCE WITH OTHER LEGISLATION, SUBORDINATE INSTRUMENTS AND POLICIES

59 Legislation

The TAFE institute Annual Report must contain a statement that it complies with all relevant legislation, and subordinate instruments, (and which should be listed in the Report) including, but not limited to, the following:• Education and Training Reform Act 2006 (ETRA)• TAFE institute constitution• Directions of the Minister for Training and Skills (or predecessors)• TAFE institute Commercial Guidelines• TAFE institute Strategic Planning Guidelines• Public Administration Act 2004• Financial Management Act 1994• Freedom of Information Act 1982• Building Act 1993• Protected Disclosure Act 2012• Victorian Industry Participation Policy Act 2003

17

60 ETRA s3.2.8 Statement about compulsory non-academic fees, subscriptions and charges payable in 2016 19-20

61 Policy Statement that the TAFE institute complies with the Victorian Public Sector Travel Principles 19

62Key

Performance Indicators

Institutes to report against:• KPIs set out in the annual Statement of Corporate Intent; and• Employment costs as a proportion of training revenue;• Training revenue per teaching FTE;• Operating margin percentage;• Training Revenue diversity.

98-99

OVERSEAS OPERATIONS OF VICTORIAN TAFE INSTITUTES

63

PAEC andVAGO

(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.

14, 59

Chadstone campusBatesford Road, ChadstoneVictoria, Australia 3148

City campus332 St Kilda Road, Southbank Victoria, Australia 3006

Moorabbin campus488 South Road, MoorabbinVictoria, Australia 3189

Waverley campus595 Waverley Road, Glen WaverleyVictoria, Australia 3150 Rural Learning CentreMoore Road, EildonVictoria, Australia 3713

Moorabbin-Bulli Street campus36 Bulli St, MoorabbinVictoria, Australia 3189

Arden Street campusLevel 2, 200 Arden St, North Melbourne Victoria, Australia 3051

All written correspondence to:PO Box 42Holmesglen Victoria, Australia 3148

T: +61 3 9564 1555E: [email protected]

Copyright © Holmesglen Institute, March 2017Holmesglen is the trading name of Holmesglen InstituteCRICOS Provider Code: 00012G. TOID: 0416

holmesglen institute 2016 annual report€¦ · i wish to pay tribute to the work of the executive...

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