Polytechnic West
Final Report
1 January 2016 to 10 April 2016 .
Statement of Compliance
Executive Summary
Appointment of the Reporting Officer Compliance with Written Law
Organisational Structure Corporate Governance
Compliance
Functions Report on Operations
Financial Statements Notes
Postal Address: PO Box 1336 Midland Western Australia 6936
T: 9267 7777 W: www.polytechnic.wa.edu.au
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Hon Liza Harvey MLA Deputy Premier; Minister for Police; Road Safety; Training and Workforce Development; Women's Interests
In accordance with Section 63 of the Financial Management Act 2006, I hereby submit for your information and presentation to Parliament, the Final Report of Polytechnic West for the period January 1 2016 to April 10 2016.
The Report has been prepared in accordance with the terms of the appointment of the Reporting Officer, as outlined by the Treasurer and the provisions of the Financial Management Act 2006.
Satvinder Sekhon Reporting Officer 16 June 2016
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In October 2015, The Minister for Training and Workforce Development launched the Training Sector Reform Project (Reform Project) to examine the function and structure of Western Australia’s public training sector. The purpose of the Reform Project is to ensure a robust and sustainable public vocational education and training (VET) sector with high quality training that is accessible and equitable to the community and that supports improved outcomes for students.
As a result of the State Government’s Training Sector Reform Project from 11 April 2016, the 11 former Institutes and their 70 campus locations will be managed by a network of five TAFE colleges. The five new TAFE colleges will be named North Metropolitan TAFE, South Metropolitan TAFE, North Regional TAFE, Central Regional TAFE and South Regional TAFE.
New arrangements will also be introduced that will see greater collaboration among the network of colleges, allowing resources and expertise to be shared across WA. This will give students, particularly those in regional areas, access to more diverse training programs.
The reforms will also see the reinstatement of the TAFE brand, in recognition of the strong historical association and awareness by local communities.
As a result of the reform operations, students and staff at Polytechnic West will transition to South Metropolitan TAFE from April 11, 2016. Therefore outcomes relating to Polytechnic West will be reported on in the amalgamated TAFE’s end of financial year reporting.
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Under Section 68(1) of the Finance Management Act 2006 (FMA) it is necessary to appoint a Reporting Officer, to perform the duties in relation to the final reports for the abolished Institute.
Approval was sought for the Treasurer to appoint a reporting officer who is responsible for the preparation of the final reports for any Institute closed by the reform. The report will be for the period 1 January 2016 to 10 April 2016 inclusive and include a set of financial statements and notes (including 2015 comparatives), an abridged report on operations and not include key performance indicators.
The final report is to be submitted to the Minister for The Department of Training and Workforce Development within 90 days from the closure date of Polytechnic West, to be tabled in Parliament 14 days after that.
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Enabling Legislation Polytechnic West is a body corporate established under section 35 of the Vocational Education and Training Act 1996.
Legislation Administered The Minister for Training and Workforce Development administers the Vocational Education and Training Act 1996.
Legislation Impacting on the Institutes Activities In the performance of its function, Polytechnic West exercised controls that provided reasonable assurance that it complied with the following relevant written laws: Aboriginal and Torres Strait Islander Act 2005 Archives Act 1983 Building and Construction Industry Training Fund and Levy Collection Act 1990 Classification (Publications, Films and Computer Games) Enforcements Act 1996 Copyright Act 1968 Commercial Tenancy (Retail Shops)Agreements Act 1985 Competition and Consumer Act 2010 Commonwealth Electoral Act 1918 Corruption and Crime Commission Act 2003 Criminal Code Act 1995 Disability Discrimination Act 1992 Disability Services Act 1993 Education Services for Overseas Students Act 2000 Education Service Providers (full-fee overseas students)Registration Act 1991 School Education Act 1999 Electoral Act 1907 Employment Dispute Resolution Act 2008 Equal Opportunity Act 1984
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Continued..
Evidence Act 1995 Fair Work (Registered Organisations) Act 2009 Financial Management Act 2006 Freedom of Information Act 1982 State Superannuation Act 2000 Higher Education Support Act 2003 Immigration (Education) Act 1971 Immigration (Education) Charge Act 1992 Income Tax Assessment Act 1997 Industrial Relations Act 1979 Limitation Act 2005 Library Board of Western Australia Act 1951 Minimum Conditions of Employment Act 1993 Occupational Safety and Health Act 1984 Privacy Act 1988 Public and Bank Holidays Act 1972 Public Interest Disclosure Act 2003 Public Sector Management Act 1994 Public Sector Code of Ethics Spam Act 2003 State Records Act 2000 State Supply Commission Act 1991 Tertiary Education Quality and Standards Agency Act 2011
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Governing Council Members 2016
Name Position Keith Vuleta Chair Douglas Hall Deputy Chair Peter McCaffrey Member Christine Coyne Member Fiona Lander Member Bradley Woods Member Keith Weston Member Prof David Wood Member
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Corporate Executive
Name Position Jill Jamieson Managing Director Blair Marsh General Manager Education and Industry Services Brenda Micale Acting General Manager Organisational Services Annette Keller General Manager Corporate Services Daniel Ronzan Acting Executive Director Commerce and Hospitality Lyn Southam Executive Director Foundation Skills and Community Services Rob Berryman Executive Director Construction Jonathon Maile Executive Director Applied Engineering
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Public Sector Standards and Ethical Codes (Breaches) Polytechnic West has policies, procedures and guidelines in place to ensure agency obligations are met with respect to the Public Sector Standards in Human Resource Management, the WA Code of Ethics and the Polytechnic West Code of Conduct.
These policies and supporting guidelines are actively promoted throughout the Institutes intranet site and by the Human Resource Directorate. In addition Polytechnic West continues to provide training for all staff on Accountable and Ethical Decision Making in line with the Public Sector Commission Instruction “Codes of Conduct and Integrity Training”.
In accordance with section 31(1) of the Public Sector Management Act 1994, Polytechnic West provides the following statements regarding compliance with the Public Sector Standards, the WA Code of Ethics and the Polytechnic West Code of Conduct.
Compliance Category Result Public Sector Standards in Human No breaches were lodged Resource Management WA Code of Ethics No report of non-compliance Polytechnic West Code of Conduct No breaches of the Code of Conduct
Public Interest Disclosures There have been no Public Interest Disclosures received for the period 1 January 2016 to 10 April 2016.
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Record Keeping Plan Polytechnic West’s Record Keeping Plan is maintained in accordance with the State Records Act 2000. Records awareness training remains a key component of PWAs induction process, addressing staff roles and responsibilities in regard to compliance with the Record Keeping Plan. All staff are required to complete the Polytechnic West Records Awareness Training. The course has been designed and developed to be delivered online. In addition, training in the use of the electronic document and records management system (EDRMS) is also provided to staff and is delivered both in a classroom environment and as necessary, in small groups or individual training.
Freedom of Information There have been no Freedom of Information requests for the period 1 January 2016 to 10 April 2016.
Occupational Safety and Health Polytechnic West is committed to promoting a safe workplace that adheres to, and promotes, the Occupational Safety and Health Act 1984 and the Workers Compensation and Injury Management Act 1981. Polytechnic West, as far as practicable, will provide for the safety and health at work of all its employees and others affected by the delivery of its services at all its workplaces. Polytechnic West’s senior managers and line managers are responsible for verifying that the Code of Practice on Occupational Safety and Health in the Western Australian Public Sector 2007 is adopted and implemented. Polytechnic West supports the formation of safety and health committees across the Institute, currently there are six committees representing the major campuses. They were made up of 73 elected safety and health representatives as well as management representatives. The committees meet bimonthly to address local issues, review incident and hazard reports and reported accidents.
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Polytechnic West also has an Occupational Safety and Health Standing Committee chaired by the General Manager Corporate Services. This committee ensures matters unable to be addressed at local committee level are given appropriate attention as well as endorsing safety related policies. To facilitate consultation on injury management matters, Polytechnic West has trained staff within the Human Resources directorate to provide information and assistance. There have been no significant incidents for the period 1 January 2016 to 10 April 2016.
Expenditure On Advertising, Market Research, Polling And Direct Mail In accordance with section 175ZE of the Electoral Act 1907, Polytechnic West incurred the following expenditure in advertising, market research, polling, direct mail and media advertising. Total expenditure for period 1 January 2016 to 10 April 2016 $53,725
Expenditure was incurred in the following areas: Advertising Agencies Digital Advertising $4,730 Publications/Promotional Materials $4,319 AdCorp/General $44,676 Market Research Organisations NIL Polling Organisations NIL Direct Mail Organisations NIL Media Advertising Organisations NIL
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Polytechnic West is established under section 35 of the Vocational Education and Training Act 1996.
Section 37 of the Vocational Education and Training Act 1996 outlines the functions of a college.
(1) The functions of a college are as follows — (a) to provide vocational education and training; (ba) to tender for and enter into contracts for the provision by it of vocational education and training; (bb) to provide vocational education and training on a fee for service basis; (b) to confer awards and, if it is a registered training provider and, under the terms of its registration as such, authorised to do so — (i) approved VET qualifications; and (ii) prescribed VET qualifications; (ca) to provide, for a fee or otherwise, or enter into contracts to provide, products, consultancy or other services in the course of, or incidental to, the provision by the college of vocational education and training; (c) to undertake research and development related to vocational education and training which has a direct practical application to industry, commerce and the community; (da) to turn to account the vocational education and training expertise of the college by means of the sale of services and the commercial exploitation of intellectual property, including the assignment and licensing of such property; (d) to promote equality of opportunity in the undertaking of vocational education and training; (ea) to provide adult and community education; (e) to provide or arrange for the provision of services to its students; (fa) to provide housing for its staff, and residential accommodation for its students; (fb) with the approval of the Minister, to establish and maintain branches of the college at such places in the State as its governing council thinks fit; (f) with the approval of the Minister, on terms and conditions approved by the Treasurer, to participate in business arrangements relating to the provision of vocational education and training;
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(g) to contribute to the general development of the community in the region of the college through such activities as may be authorised by the Minister; (h) to provide education on behalf of another educational institution; (i) to perform any function prescribed.
(2) A college must perform its functions in accordance with its strategic plan last approved under section 43 and its business plan last approved under section 44A.
(3) A college is not to hold land or any estate or interest in land, but this subsection does not apply to the holding of land or an estate or interest in land that is part of a business arrangement in which the college participates under subsection (1)(f).
(4) The power conferred by subsection (1)(f) is not subject to, and may be exercised despite, the State Supply Commission Act 1991.
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On the 11th April 2016, operations, staff and students of Polytechnic West will transition to South Metropolitan TAFE, as part of the Western Australian Training Sector Reform Project.
For 2016, prior to the transition, Polytechnic West had 926 FTE staff across eight campuses. As this data represents only part of the year, it is not comparable to previous years.
There were over 350 courses offered across the campuses, with enrolments for period 1 January 2016 to 10 April 2016 being 16,705 and number of unique students being 13,095. As this report is not for a full calendar year, it is not practical or meaningful to provide student and enrolment data for this period and full year student enrolment data will be reported on the in the Annual Report for South Metropolitan TAFE.
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FINANCIAL STATEMENTS For the Period 1 January 2016 to10 April 2016
Polytechnic West STATEMENT OF COMPREHENSIVE INCOME 1 January 2016 Year Ended FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016 - 10 April 2016 31 December 2015 Notes $ $ COST OF SERVICES Expenses Employee benefits expense 6 23,595,187 93,725,409 Supplies and services 7 5,588,468 22,242,961 Depreciation and amortisation expense 8 1,410,696 5,213,636 Grants and subsidies 9 73,177 439,046 Cost of sales 14 - 43,965 Loss on disposal of non-current assets 17 1,279 172,048 Other expenses 10 2,432,692 10,317,151 Total cost of services 33,101,499 132,154,216
Income Revenue Fee for service 11 5,305,411 22,022,703 Student fees and charges 12 5,131,840 18,856,243 Ancillary trading 13 210,856 968,726 Sales 14 - 37,330 Interest revenue 15 219,040 937,258 Other revenue 16 298,042 2,538,331 Total revenue 11,165,189 45,360,591
Total income other than income from State Government 11,165,189 45,360,591
NET COST OF SERVICES 21,936,310 86,793,625
INCOME FROM STATE GOVERNMENT 18 Service appropriation 21,208,039 87,908,567 Services received free of charge 640,801 2,813,306 Total income from State Government 21,848,840 90,721,873
SURPLUS/(DEFICIT) FOR THE PERIOD (87,470) 3,928,248
OTHER COMPREHENSIVE INCOME Items not reclassified subsequently to profit or loss Changes in asset revaluation surplus 30 1,030,000 5,180,574 Total other comprehensive income 1,030,000 5,180,574 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 942,530 9,108,822
The Statement of Comprehensive Income should be read in conjunction with the accompanying notes. Polytechnic West STATEMENT OF FINANCIAL POSITION As at As at AS AT 10 APRIL 2016 10 April 2016 31 December 2015 Notes $ $ ASSETS Current Assets Cash and cash equivalents 31 26,784,221 24,647,193 Restricted cash and cash equivalents 19,31 954,505 1,073,825 Inventories 20 12,475 10,775 Receivables 21 6,315,296 1,914,759 Other current assets 22 437,205 1,077,250 Total Current Assets 34,503,702 28,723,802
Non-Current Assets Restricted cash and cash equivalents 19,31 340,739 269,814 Property, plant and equipment 23 197,360,692 198,144,032 Intangible assets 25 98,342 29,339 Total Non-Current Assets 197,799,773 198,443,185
TOTAL ASSETS 232,303,475 227,166,987
LIABILITIES Current Liabilities Payables 27 1,980,675 1,966,322 Provisions 28 14,330,713 15,805,073 Other current liabilities 29 8,084,492 2,613,954 Total Current Liabilities 24,395,880 20,385,349
Non-Current Liabilities Provisions 28 4,289,144 3,075,717 Total Non-Current Liabilities 4,289,144 3,075,717
TOTAL LIABILITIES 28,685,024 23,461,066
NET ASSETS 203,618,451 203,705,921
EQUITY 30 Contributed equity 68,769,121 69,799,121 Reserves 131,770,951 130,740,951 Accumulated surplus 3,078,379 3,165,849
TOTAL EQUITY 203,618,451 203,705,921
The Statement of Financial Position should be read in conjunction with the accompanying notes. Polytechnic West STATEMENT OF CASH FLOWS 1 January 2016 Year Ended FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016 - 10 April 2016 31 December 2015 Notes $ $ CASH FLOWS FROM STATE GOVERNMENT Service appropriation - Department of Training and Workforce Development 18,873,764 82,601,018 Capital appropriation - Department of Training and Workforce Development - 1,000,000 Net cash provided by State Government 18,873,764 83,601,018
Utilised as follows: CASH FLOWS FROM OPERATING ACTIVITIES Payments Employee benefits (23,809,555) (96,538,391) Supplies and services (4,776,069) (19,389,054) Grants and subsidies (73,177) (439,046) GST payments on purchases (579,159) (2,574,046) Other payments (2,031,763) (10,135,889)
Receipts Fee for service 7,332,509 22,808,008 Student fees and charges 6,180,590 18,603,302 Ancillary trading 210,856 968,726 Interest received 258,889 926,615 GST receipts on sales 263,006 1,050,594 GST receipts from taxation authority 313,445 1,530,060 Sales - 37,330 Other receipts 297,340 2,375,926 Net cash used in operating activities 31 (16,413,088) (80,775,865)
CASH FLOWS FROM INVESTING ACTIVITIES Payments Purchase of non-current physical assets (374,575) (2,969,514) Receipts Proceeds from sale of non-current physical assets 2,532 3,620 Net cash used in investing activities (372,043) (2,965,894)
Net increase/(decrease) in cash and cash equivalents 2,088,633 (140,741)
Cash and cash equivalents at the beginning of period 25,990,832 26,131,573
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD 31 28,079,465 25,990,832
The Statement of Cash Flows should be read in conjunction with the accompanying notes. Polytechnic West STATEMENT OF CHANGES IN EQUITY Accumulated FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016 Contributed Equity Reserves Surplus / (Deficit) Total Equity Notes $ $ $ $ Balance at 1 January 2015 30 69,748,249 125,560,377 (762,399) 194,546,227
Surplus - - 3,928,248 3,928,248 Other comprehensive income - 5,180,574 - 5,180,574 Total comprehensive income for the period - 5,180,574 3,928,248 9,108,822
Transaction with owners in their capacity as owners : Other contributions by owners 50,872 - - 50,872 Total 50,872 - - 50,872
Balance at 31 December 2015 69,799,121 130,740,951 3,165,849 203,705,921
Balance at 1 January 2016 69,799,121 130,740,951 3,165,849 203,705,921 Deficit - - (87,470) (87,470) Other comprehensive income - 1,030,000 - 1,030,000 Total comprehensive income for the period - 1,030,000 (87,470) 942,530
Transaction with owners in their capacity as owners: Distribution to owners (1,030,000) - - (1,030,000) Total (1,030,000) - - (1,030,000)
Balance at 10 April 2016 68,769,121 131,770,951 3,078,379 203,618,451
The Statement of Changes in Equity should be read in conjunction with the accompanying notes.
POLYTECHNIC WEST NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 10 APRIL 2016
1. Australian Accounting Standards (a) General The Institute's financial statements for the period ended 10 April 2016 have been prepared in accordance with Australian Accounting Standards. The term 'Australian Accounting Standards' includes Standards and Interpretations issued by the Australian Accounting Standard Board (AASB).
The Institute has adopted any applicable new and revised Australian Accounting Standards from their operative dates. (b) Early adoption of standards The Institute cannot early adopt an Australian Accounting Standard unless specifically permitted by Treasurer's Instruction (TI) 1101 'Application of Australian Accounting Standards and Other Pronouncements'. Partial exemption permitting early adoption of AASB 2015-7 Amendments to Australian Accounting Standards – Fair Value Disclosures of Not-for-Profit Public Sector Entities has been granted. Aside from AASB 2015-7, there has been no early adoption of any other Australian Accounting Standards that have been issued or amended (but not operative) by the Institute for the reporting period ended 10 April 2016.
2. Summary of significant accounting policies The following accounting policies have been adopted in the preparation of these financial statements. Unless otherwise stated, these policies are consistent with those adopted in the previous year. (a) General statement The Institute is a not-for-profit reporting entity that prepares general purpose financial statements in accordance with the Australian Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative pronouncements of the AASB as applied by the Treasurer’s instructions. Several of these are modified by the Treasurer’s instructions to vary application, disclosure, format and wording. The Financial Management Act 2006 and the Treasurer’s instructions impose legislative provisions that govern the preparation of financial statements and take precedence over the Australian Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative pronouncements of the AASB.
Where modification is required and has had a material or significant financial effect upon the reported results, details of that modification and the resulting financial effect are disclosed in the notes to the financial statements. (b) Basis of preparation The financial statements have been prepared on the accrual basis of accounting using the historical cost convention, except for land and buildings which have been measured at fair value.
The accounting policies adopted in the preparation of the financial statements have been consistently applied throughout all periods presented unless otherwise stated.
The financial statements are presented in Australian dollars ($).
Note 3 ‘Judgements made by management in applying accounting policies’ discloses judgements that have been made in the process of applying the Institute’s accounting policies resulting in the most significant effect on amounts recognised in the financial statements.
Note 4 ‘Key sources of estimation uncertainty’ discloses key assumptions made concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. (c) Reporting entity The reporting entity comprises the Institute and bodies included at note 39 ‘Related bodies’. (d) Contributed equity AASB Interpretation 1038 ‘Contributions by Owners Made to Wholly-Owned Public Sector Entities’ requires transfers in the nature of equity contributions, other than as a result of a restructure of administrative arrangements, to be designated by the Government (the owner) as contributions by owners (at the time of, or prior to transfer) before such transfers can be recognised as equity contributions. Capital appropriations have been designated as contributions by owners by TI 955 'Contributions by Owners Made to Wholly Owned Public Sector Entities' and have been credited directly to Contributed Equity.
The transfers of net assets to/from other agencies, other than as a result of a restructure of administrative arrangements, are designated as contributions by owners where the transfers are non-discretionary and non- reciprocal. See note 30 'Equity'.
(e) Income Revenue recognition Revenue is recognised and measured at the fair value of consideration received or receivable.
The majority of operating revenue of the Institute represents revenue earned from student fees and charges, fee for service, ancillary services, trading activities and Commonwealth grants and contributions. The following specific recognition criteria must also be met before revenue is recognised for the major business activities as follows: Sale of goods Revenue is recognised from the sale of goods and disposal of other assets when the significant risks and rewards of ownership transfer to the purchaser and can be measured reliably. Provision of services Revenue is recognised by reference to the stage of completion of the transaction. Interest Revenue is recognised as the interest accrues.
Grants, donations, gifts and other non-reciprocal contributions Revenue is recognised at fair value when the Institute obtains control over the assets comprising the contributions, usually when cash is received.
Other non-reciprocal contributions that are not contributions by owners are recognised at their fair value. Contributions of services are only recognised when a fair value can be reliably determined and the services would be purchased if not donated.
Service appropriations Service Appropriations are recognised as revenues at fair value in the period in which the Institute gains control of the appropriated funds The Institute gains control of appropriated funds at the time those funds are deposited to the bank account.
State funds The funds received from the Department of Training and Workforce Development in respect of the delivery of services forming part of the Delivery Performance Agreement are included in State funds, disclosed under ‘Income from State Government'. They are the result of training successfully tendered for under competitive tendering arrangements. This revenue is recognised at nominal value in the period in which the Institute meets the terms of the Agreement. See note 18 'Income from State Government'. Gains Realised and unrealised gains are usually recognised on a net basis. These include gains arising on the disposal of non-current assets and some revaluations of non-current assets. (f) Property, plant and equipment Capitalisation/expensing of assets Items of property, plant and equipment costing $5,000 or more are recognised as assets and the cost of utilising assets is expensed (depreciated) over their useful lives. Where applicable in accordance with TI 1101, the capitalisation threshold has been applied to the aggregate value of a group or network of assets where the cost of individual item may be below the threshold but collectively the cost of the items in the group or network exceeds the threshold. Items of property, plant and equipment costing less than $5,000 are immediately expensed direct to the Statement of Comprehensive Income (other than where they form part of a group of similar items which are significant in total). Initial recognition and measurement Property, plant and equipment are initially recognised at cost.
For items of property, plant and equipment acquired at no cost or for nominal cost, the cost is the fair value at the date of acquisition. Subsequent measurement Subsequent to initial recognition as an asset, the revaluation model is used for the measurement of land and buildings and historical cost for all other property, plant and equipment. Land and buildings are carried at fair value less accumulated depreciation (buildings only) and accumulated impairment losses.
All other items of property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses.
Where market-based evidence is available, the fair value of land and buildings is determined on the basis of current market values determined by reference to recent market transactions. When buildings are revalued by reference to recent market transactions, the accumulated depreciation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount.
In the absence of market-based evidence, fair value of land and buildings is determined on the basis of existing use. This normally applies where buildings are specialised or where land use is restricted. Fair value for existing use buildings is determined by reference to the cost of replacing the remaining future economic benefits embodied in the asset, i.e. the depreciated replacement cost. Where the fair value of buildings is determined on the depreciated replacement cost basis,, the gross carrying amount and the accumulated depreciation are restated proportionately. . Fair value for restricted use land is determined by comparison with market evidence for land with similar approximate utility (high restricted use land) or market value of comparable unrestricted land. (low restricted use land).
Land and buildings are independently valued annually by the Western Australian Land Information Institute(Valuation Services) and recognised annually to ensure that the carrying amount does not differ materially from the asset's fair value at the end of the reporting period.
The most significant assumptions and judgements in estimating fair value are made in assessing whether to apply the existing use basis to assets and in determining estimated life.
Professional judgement by the valuer is required where the evidence does not provide a clear distinction between market type assets and existing use assets. Refer to note 23 'Property, plant and equipment' for further information on revaluations. Derecognition Upon disposal or derecognition of an item of property, plant and equipment, any revaluation surplus relating to that asset is retained in the asset revaluation surplus. Asset revaluation surplus The asset revaluation surplus is used to record increments and decrements on the revaluation of non-current assets on a class of assets basis. Depreciation All non-current assets having a limited useful life are systematically depreciated over their estimated useful lives in a manner that reflects the consumption of their future economic benefits.
Depreciation is calculated using the straight line method, using rates which are reviewed annually. Estimated useful lives for each class of depreciable asset are:
Buildings 20 to 40 years Transportable 20 to 40 years Motor vehicles, caravans and trailers 1 to 25 years Plant, furniture and general equipment 1 to 30 years Computing, communications and software (a) 1 to 14 years
(a) Software that is integral to the operation of related hardware.
Works of art controlled by the Institute are classified as property, plant and equipment. These are anticipated to have indefinite useful lives. Their service potential has not, in any material sense, been consumed during the reporting period and so no depreciation has been recognised.
Land is not depreciated.
Library Collection In 2014, the institute recognised the Library Collection as a grouped asset from 31 December 2013. Purchases during the first year (2013) will be 100% depreciated in 31 December 2018 and derecognised in 31 December 2020 and each year subsequently treated, in accordance with the ‘rolling depreciation’ methodology adopted (see note 23). (g) Intangible assets Capitalisation/Expensing of assets Acquisitions of intangible assets costing $5,000 or more and internally generated intangible assets costing $5,000 or more, are capitalised. The cost of utilising the assets is expensed (amortised) over their useful life. Costs incurred below these thresholds are immediately expensed directly to the Statement of Comprehensive Income.
Intangible assets are initially recognised at cost. For assets acquired at no cost or for nominal cost, the cost is their fair value at the date of acquisition.
The cost model is applied for subsequent measurement requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses.
Amortisation for intangible assets with finite useful lives is calculated for the period of the expected benefit (estimated useful life which is reviewed annually) on the straight line basis. All intangible assets controlled by the Institute have a finite useful life and zero residual value. The expected useful lives for each class of intangible asset are:
Licences up to 10 years Development costs 3 to 5 years Software (a) 3 to 5 years Website costs 3 to 5 years
(a) Software that is not integral to the operation of any related hardware.
Computer software Software that is an integral part of the related hardware is recognised as property, plant and equipment. Software that is not an integral part of the related hardware is recognised as an intangible asset. Software costing less than $5,000 is expensed in the year of acquisition.
(h) Impairment of assets Property, plant and equipment and intangible assets are tested for any indication of impairment at the end of each reporting period. Where there is an indication of impairment, the recoverable amount is estimated. Where the recoverable amount is less than the carrying amount, the asset is considered impaired and is written down to the recoverable amount and an impairment loss is recognised. Where an asset measured at cost is written down to recoverable amount, an impairment loss is recognised in profit or loss. Where a previously revalued asset is written down to recoverable amount, the loss is recognised as a revaluation decrement in other comprehensive income. As the Institute is a not-for-profit entity, unless asset has been identified as a surplus asset, the recoverable amount is the higher of an asset’s fair value less costs to sell and depreciated replacement cost.
The risk of impairment is generally limited to circumstances where an asset’s depreciation is materially understated, where the replacement cost is falling or where there is a significant change in useful life. Each relevant class of assets is reviewed annually to verify that the accumulated depreciation/amortisation reflects the level of consumption or expiration of asset’s future economic benefits and to evaluate any impairment risk from falling replacement costs.
Intangible assets with an indefinite useful life and intangible assets not yet available for use are tested for impairment at the end of each reporting period irrespective of whether there is any indication of impairment.
The recoverable amount of assets identified as surplus assets is the higher of fair value less costs to sell and the present value of future cash flows expected to be derived from the asset. Surplus assets carried at fair value have no risk of material impairment where fair value is determined by reference to market-based evidence. Where fair value is determined by reference to depreciated replacement cost, surplus assets are at risk of impairment and the recoverable amount is measured. Surplus assets at cost are tested for indications of impairment at the end of each reporting period.
See note 26 ‘Impairment of assets’ for the outcome of impairment reviews and testing. See note 2(o) 'Receivables' and note 21 'Receivables' for impairment of receivables.
(i) Non-current assets (or disposal groups) classified as held for sale Non-current assets (or disposal groups) held for sale are recognised at the lower of carrying amount and fair value less costs to sell, and are disclosed separately from other assets in the Statement of Financial Position. Assets classified as held for sale are not depreciated or amortised.
(j) Leases The institute has entered into operating lease arrangements for buildings and motor vehicles. Lease payments are expensed on a straight line basis over the lease term as this represents the pattern of benefits derived.
(k) Financial instruments The Institute has two categories of financial instruments: Financial assets Cash and cash equivalents Restricted cash and cash equivalents Receivables
Financial liabilities Payables Other liabilities Initial recognition and measurement of financial instruments is at fair value which normally equates to the transaction cost or the face value. Subsequent measurement is at amortised cost using the effective interest method.
The fair value of short-term receivables and payables is the transaction cost or the face value because there is no interest rate applicable and subsequent measurement is not required as the effect of discounting is not material. (l) Cash and cash equivalents For the purpose of the Statement of Cash Flows, cash and cash equivalents include restricted cash and cash equivalents. These are comprised of cash on hand and short-term deposits with original maturities of three months or less that are readily convertible to a known amount of cash and which are subject to insignificant risk of changes in value.
(m) Accrued salaries Accrued salaries (see note 27 'Payables') represent the amount due to staff but unpaid at the end of the reporting period, as the end of the last pay period for that reporting period does not coincide with the end of the reporting period. Accrued salaries are settled within a fortnight of the reporting period end. The Institute considers the carrying amount of accrued salaries to be equivalent to its fair value.
The accrued salaries suspense account (see note 19 ‘Restricted cash and cash equivalents’) consists of amounts paid annually into a suspense account over a period of ten financial years to largely meet the additional cash outlay in each eleventh year when 27 pay days occur instead of the normal 26. No interest is received on this account.
(n) Inventories Inventories are measured at the lower of cost and net realisable value. Costs are assigned by the method most appropriate to each particular class of inventory, with the majority being measured on a first in first out basis. Inventories not held for resale are measured at cost unless they are no longer required, in which case they are measured at net realisable value.
See note 20 'Inventories'. (o) Receivables Receivables are recognised at original invoice amount less an allowance for any uncollectible amounts (i.e. impairment). The collectability of receivables is reviewed on an ongoing basis and any receivables identified as uncollectible are written-off against the allowance account. The allowance for uncollectible amounts (doubtful debts) is raised when there is objective evidence that the Institute will not be able to collect the debts. The carrying amount is equivalent to fair value as it is due for settlement within 30 days.
See note 2(k) ‘Financial instruments’ and note 21 ‘Receivables’.
(p) Payables Payables are recognised at the amounts payable when the Institute becomes obliged to make future payments as a result of a purchase of assets or services. The carrying amount is equivalent to fair value, as settlement is generally within 30 days. See note 2(k) ‘Financial instruments’ and note 27 'Payables'.
(q) Provisions Provisions are liabilities of uncertain timing or amount and are recognised where there is a present legal or constructive obligation as a result of a past event and when the outflow of resources embodying economic benefits is probable and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at the end of each reporting period. See note 28 ‘Provisions’.
(i) Provisions - employee benefits All annual leave and long service leave provisions are in respect of employees’ services up to the end of the reporting period. Annual leave
Annual leave is not expected to be settled wholly within 12 months after the end of the reporting period and is therefore considered to be ‘other long-term employee benefits’. The annual leave liability is recognised and measured at the present value of amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement. When assessing expected future payments consideration is given to expected future wage and salary levels including non-salary components such as employer superannuation contributions, as well as the experience of employee departures and periods of service. The expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.
The provision for annual leave is classified as a current liability as the Institute does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.
Professional leave The provision for professional allowance leave relates to the entitlement of lecturers under the WA TAFE lecturers general agreement for four weeks professional leave during each calendar year of service. Since this entitlement cannot be accrued from year to year it is not ordinarily provided for at 31 December but has been provided at 10 April 2016. Professional allowance leave liabilities have been classified as current as they must be used each calendar year and cannot be accrued from year to year. As at 10 April 2016, this leave has been taken in advance of the accrual resulting in a negative balance.
Long service leave Long service leave is not expected to be settled within 12 months after the end of the reporting period is recognised and measured at the present value of amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement. When assessing expected future payments consideration is given to expected future wage and salary levels including non-salary components such as employer superannuation contributions, as well as the experience of employee departures and periods of service. The expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows. Unconditional long service leave provisions are classified as current liabilities as the Institute does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. Pre- conditional and conditional long service leave provisions are classified as non-current liabilities because the Institute has an unconditional right to defer the settlement of the liability until the employee has completed the requisite years of service.
Deferred Leave The provision for deferred leave relates to Public Service employees who have entered into an agreement to self- fund an additional twelve months leave in the fifth year of the agreement. The provision recognises the value of salary set aside for employees to be used in the fifth year. This liability is measured on the same basis as annual leave. Deferred leave is reported as a current provision as employees can leave the scheme at their discretion at any time.
Purchased leave
The provision for purchased leave relates to Public Service employees who have entered into an agreement to self- fund up to an additional 10 weeks leave per calendar year. The provision recognises the value of salary set aside for employees and is measured at the undiscounted amounts expected to be paid when the liabilities are settled. Superannuation The Government Employees Superannuation Board (GESB) and other funds administer public sector superannuation arrangements in Western Australia in accordance with legislative requirements. Eligibility criteria for membership in particular schemes for public sector employees vary according to commencement and implementation dates. Eligible employees contribute to the Pension Scheme, a defined benefit pension scheme closed to new members since 1987, or the Gold State Superannuation Scheme (GSS), a defined benefit lump sum scheme closed to new members since 1995. Employees commencing employment prior to 16 April 2007 who were not members of either the Pension Scheme or the GSS became non-contributory members of the West State Superannuation Scheme (WSS). Employees commencing employment on or after 16 April 2007 became members of the GESB Super Scheme (GESBS). From 30 March 2012, existing members of the WSS or GESBS and new employees have been able to choose their preferred superannuation fund provider. The Institute makes contributions to GESB or other funds providers on behalf of employees in compliance with the Commonwealth Government’s Superannuation Guarantee (Administration) Act 1992. Contributions to these accumulation schemes extinguish the Institute’s liability for superannuation charges in respect of employees who are not members of the Pension Scheme or GSS. The GSS is a defined benefit scheme for the purposes of employees and whole-of-government reporting. However, it is a defined contribution plan for Institute purposes because the concurrent contributions (defined contributions) made by the Institute to GESB extinguishes the Institute’s obligations to the related superannuation liability. The Institute has no liabilities under the Pension Scheme or the GSS. The liabilities for the unfunded Pension Scheme and the unfunded GSS transfer benefits attributable to members who transferred from the Pension Scheme, are assumed by the Treasurer. All other GSS obligations are funded by concurrent contributions made by the Institute to the GESB.
The GESB makes all benefit payments in respect of the Pension Scheme and GSS, and is recouped from the Treasurer for the employer's share. See also note 2(r) 'Superannuation expense'.
(ii) Provisions - other Employment on-costs Employment on-costs, including workers’ compensation insurance, are not employee benefits and are recognised separately as liabilities and expenses when the employment to which they relate has occurred. Employment on- costs are included as part of 'Other expenses' and are not included as part of the Institute's 'Employee benefits expense’. The related liability is included in 'Employment on-costs provision'. (See note 10 'Other expenses' and note 28 'Provisions'.) (r) Superannuation expense The superannuation expense in the Statement of Comprehensive Income comprises employer contributions paid to the GSS (concurrent contributions), the West State Superannuation Scheme (WSS), the GESB Super Scheme (GESBS) and other superannuation funds.
(s) Assets and services received free of charge or for nominal cost Assets or services received free of charge or for nominal cost that the Institute would otherwise purchase if not donated, are recognised as income at the fair value of the assets or services where they can be reliably measured. A corresponding expense is recognised for services received. Receipts of assets are recognised in the Statement of Financial Position.
Assets or services received from other State Government agencies are separately disclosed under Income from State Government in the Statement of Comprehensive Income.
(t) Comparative figures Comparative figures are, where appropriate, reclassified to be comparable with the figures presented in the current financial year.
3. Judgements made by management in applying accounting policies The preparation of financial statements requires management to make judgements about the application of accounting policies that have a significant effect on the amounts recognised in the financial statements. The Institute evaluates these judgements regularly.
Operating Lease Commitments The Institute has entered into several commercial leases and has determined that the lessors retain substantially all the significant risks and rewards incidental to ownership of the property. Accordingly, the leases have been classified as operating leases.
4. Key sources of estimation uncertainty Key estimates and assumptions concerning the future are based on historical experience and various other factors that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.
Several estimations and assumptions in calculating the Institute’s long service leave provision include expected future salary rates, discount rates, employee retention rates and expected future payments. Changes in these estimations and assumptions may impact on the carrying amount of the long service leave provision.
Student receivables under 60 days due are considered collectable. Student receivables over 90 days are analysed for collectability based on historical collection rates and the provision is adjusted accordingly.
General receivables from other government agencies are considered risk free (no allowance for doubtful debt) and all others are individually assessed, with an allowance to the full value if required.
Inventory stocks (bookshops) are ordered on a just in time basis to match current year teaching requirements. Obsolescence is considered less than 5% of annual trading purchases and therefore no provision is made. A decision was made in 2014 to discontinue bookshop trading from 2015 onwards.
The Institute revalues its land and buildings every year during which time estimates of useful life are provided to give guidance on depreciation rates used in intervening years.
No provision has been made for sick leave as the Institute’s annual costs do not exceed the annual value of entitlements.
5. Disclosure of changes in accounting policy and estimates
Initial application of an Australian Accounting Standard The Institute has not applied any Australian Accounting Standards effective for reporting period 1 January 2016 to 10 April 2016 that impacted on the Institute.
Voluntary changes in accounting policy There are no voluntary changes in Accounting Policy for the reporting period ending 10 April 2016.
Future impact of Australian Accounting Standards not yet operative The Institute cannot early adopt an Australian Accounting Standard unless specifically permitted by TI 1101 Application of Australian Accounting Standards and Other Pronouncements. Consequently, the Institute has not applied early any Australian Accounting Standards that have been issued that may impact the Institute and any Australian Accounting Standards that are operative after 10 April 2016 will not apply due to closure of the Institute.
Changes in Accounting Estimates There have been no changes in accounting estimates. Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016 1 January 2016 Year Ended to 10 April 2016 31 December 2015 $ $
6 Employee benefits expense Wages and salaries (a) 21,427,023 85,949,137 Superannuation - defined contribution plans (b) 2,168,164 7,776,272 23,595,187 93,725,409
(a) Includes the value of the fringe benefit to the employee plus the fringe benefits tax component, leave entitlements including superannuation contribution component. (b) Defined contribution plans include West State, and Gold State and GESB and other eligible funds.
Employment on-costs expenses, such as workers' compensation insurance, are included at note 10 'Other expenses'. Employment on-costs liability is included at note 28 'Provisions'.
7 Supplies and services Consumables and minor equipment 1,162,320 3,809,954 Communication expenses 128,640 476,550 Utilities expenses 591,117 2,313,388 Consultancies and contracted services 2,455,051 11,076,377 Minor works 452,296 1,510,902 Repairs and maintenance 29,031 163,266 Operating lease and hire charges 247,955 1,034,870 Travel and passenger transport 19,933 103,752 Advertising and public relations 52,600 305,565 Supplies and services - other 439,208 1,417,532 Supplies and Services - PD staff activities 10,317 30,805 5,588,468 22,242,961
8 Depreciation and amortisation expense
Depreciation Buildings 944,247 3,344,779 Motor vehicles, caravans and trailers 24,447 84,308 Plant, furniture and general equipment 344,920 1,399,042 Computers and communication network 92,126 377,266 Total depreciation 1,405,740 5,205,395
Amortisation Software 4,956 8,241 Total amortisation 4,956 8,241
Total depreciation and amortisation 1,410,696 5,213,636
9 Grants and subsidies Recurrent Apprentices and trainees (travel, accommodation and other off-the-job assistance) 73,177 439,046 73,177 439,046
10 Other expenses Building maintenance 446,628 2,234,218 Doubtful debts expense 175,647 12,928 Employment on-costs 1,703,495 7,311,881 Student prizes and awards 10,358 16,821 Losses and write-offs 3,880 21,262 Other 92,685 720,041 2,432,692 10,317,151
11 Fee for service Fee for service - general 1,056,875 4,646,427 Fee for service - Government (other than Department of Training and Workforce Development) 1,654,843 7,538,680 International division fees 2,059,677 7,855,599 Fee for service - other 534,016 1,981,997 5,305,411 22,022,703 Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016 1 January 2016 Year Ended to 10 April 2016 31 December 2015 $ $
12 Student fees and charges Tuition fees 3,139,763 14,061,943 Resource fees 1,782,038 3,746,398 Other Institute fees 119,217 579,144 Student Fees - Recognised Prior Learning fees 72,753 303,988 Incidental Fees 18,069 164,770 5,131,840 18,856,243
13 Ancillary trading Live works (not a trading activity) 172,634 847,251 Other ancillary revenue 38,222 121,475 210,856 968,726
14 Trading profit/(loss)
(a) Bookshop: Sales - 37,330 Cost of sales: Opening inventory - (49,353) Purchases - 5,388 - (43,965) Closing inventory - - Cost of goods sold - (43,965) Trading loss - Bookshop - (6,635)
(b) Other trading Sales - - Cost of sales: Opening inventory (10,775) (10,340) Purchases (1,700) (435) (12,475) (10,775) Closing inventory 12,475 10,775 Cost of goods sold - -
Trading profit/(loss) - Other trading - -
Total Trading loss - (6,635)
See note 2(n) 'Inventories' and note 20 'Inventories'.
15 Interest revenue Interest revenue 219,040 937,258 219,040 937,258
16 Other revenue Rental and facilities fees 88,280 357,996 Sponsorship and donations revenue 51,747 135,681 Insurance Claims - 444,528 Refunds relating to prior year (a) - 850,501 Miscellaneous revenue 158,015 749,625 298,042 2,538,331 (a) 2015 includes prior year International and Higher Educaton revenue $441,000. Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016 1 January 2016 Year Ended to 10 April 2016 31 December 2015 $ $ 17 Net loss on disposal of non-current assets
Net proceeds from disposal of non-current assets Plant, furniture and general equipment 2,532 3,620 Total proceeds from disposal of non-current assets 2,532 3,620
Carrying amount of non-current assets disposed Buildings - (143,000) Motor vehicles, caravans and trailers - (490) Plant, furniture and general equipment (3,811) (31,104) Computers and communication network - (1,074) Total cost of disposal of non-current assets (3,811) (175,668)
Net loss (1,279) (172,048)
See note 23 ‘Property, plant and equipment’.
18 Income from State Government
Appropriation received during the year: Service appropriation (a) (State funds received from Department of Training and Workforce Development): Delivery and Performance Agreement (DPA) 21,163,049 72,485,494 Superannuation - 6,709,544 Voluntary Severances - 5,739,610 Other recurrent funds 44,990 2,973,919 Total State funds 21,208,039 87,908,567
Services received free of charge from other State government agencies during the financial period : Department of Training and Workforce Development - Corporate systems support 520,433 2,569,667 - Marketing and publications 118,148 219,055 - Human resources, and industrial relations support 2,220 24,584 640,801 2,813,306
Total income from State Government 21,848,840 90,721,873
(a) Service appropriations fund the net cost of services delivered.
10 April 2016 31 December 2015 $ $ 19 Restricted cash and cash equivalents Current Carryover - Capital works grants received from Department of Training and Workforce Development 954,505 1,073,825 954,505 1,073,825
Non-current Accrued salaries suspense account (27th Pay provision) 340,739 269,814 340,739 269,814
20 Inventories Current Inventories held for resale: Other (at cost) 12,475 10,775 Total 12,475 10,775
See also note 2(n) 'Inventories' and note 14 'Trading profit/(loss)'. Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016 10 April 2016 31 December 2015 $ $ 21 Receivables
Current Receivables - trade 1,173,670 910,535 Receivables - students 4,952,518 799,493 Receivables - Credit Card Control Account (218,277) 12,792 Accrued revenue 964,134 690,474 Allowance for impairment of receivables (733,655) (672,733) GST receivable 176,906 174,198 Total receivables 6,315,296 1,914,759
Reconciliation of changes in the allowance for impairment of receivables: Balance at start of period (672,733) (995,037) Doubtful debts expense (175,647) (12,928) Amount written off during the period 114,725 335,232 Balance at end of period (733,655) (672,733)
The Institute does not hold any collateral or other credit enhancements as security for receivables.
See also note 2(o) 'Receivables' and note 36 'Financial instruments'.
22 Other assets
Current Prepayments 437,205 1,077,250 Total current 437,205 1,077,250
23 Property, plant and equipment
Land At fair value (a) 56,000,000 56,000,000 56,000,000 56,000,000 Buildings At fair value (a) 136,550,780 136,449,000 At cost - 101,780 Accumulated depreciation (1,046,027) (101,780) 135,504,753 136,449,000 Buildings under construction Construction costs 609,397 185,252 609,397 185,252 Motor vehicles, caravans and trailers At cost 1,145,559 1,145,559 Accumulated depreciation (842,632) (818,185) 302,927 327,374 Plant, furniture and general equipment At cost 14,268,519 14,145,125 Accumulated depreciation (10,493,321) (10,155,890) 3,775,198 3,989,235 Leased plant, furniture and general equipment At capitalised cost 808,755 808,755 Accumulated depreciation (808,755) (808,755) - - Computer equipment, communication network At cost 3,439,597 3,438,627 Accumulated depreciation (3,042,893) (2,950,767) 396,704 487,860 Works of art At fair value 105,165 105,165 105,165 105,165 Library Collection At cost 666,548 600,146 Accumulated depreciation (note 2f) - - 666,548 600,146
197,360,692 198,144,032 Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016
(a) Land and buildings were revalued as at 1 January 2015 by the Western Australian Land Information Authority (Valuation Services). The valuations were performed during the year ended 31 December 2015 and recognised at 31 December 2015. In undertaking the revaluation, fair value was determined by reference to market values for land: $ 14,900,000. For the remaining balance, fair value of buildings was determined on the basis of depreciated replacement cost and fair value of land was determined on the basis of comparison with market evidence for land with low level utility (high restricted use land). See note 2(f) 'Property, plant and equipment'.
Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of the reporting period are set out in the table below.
Computer Plant, furniture equipment, Buildings under Motor vehicles, and general communication Library Land Buildings construction caravans and trailers equipment network Works of art Collection Total As at 10 April 2016 $ $ $ $ $ $ $ $ $ Carrying amount at start of year 56,000,000 136,449,000 185,252 327,374 3,989,235 487,860 105,165 600,146 198,144,032 Additions - - 424,145 - 134,694 970 - 66,402 626,211 Transfers (a) (1,030,000) - - - - (1,030,000) Other Disposals - - - - (3,811) - - - (3,811) Revaluation increments (a) 1,030,000 - - - - - 1,030,000 Depreciation - (944,247) - (24,447) (344,920) (92,126) - - (1,405,740) Carrying amount at end of period 56,000,000 135,504,753 609,397 302,927 3,775,198 396,704 105,165 666,548 197,360,692
Computer Plant, furniture equipment, Buildings under Motor vehicles, and general communication Library Land Buildings construction caravans and trailers equipment network Works of art Collection Total As at 31 December 2015 $ $ $ $ $ $ $ $ $ Carrying amount at start of year 55,570,000 133,101,519 334,162 355,283 4,849,883 676,270 105,165 386,110 195,378,392 Additions - 50,873 1,884,904 69,703 571,986 190,425 - 214,036 2,981,927 Transfers - 2,033,814 (2,033,814) ------Other Disposals - (143,000) - (13,304) (33,592) (1,569) - - (191,465) Revaluation increments/(decrements) 430,000 4,750,573 ------5,180,573 Depreciation - (3,344,779) - (84,308) (1,399,042) (377,266) - - (5,205,395) Carrying amount at end of period 56,000,000 136,449,000 185,252 327,374 3,989,235 487,860 105,165 600,146 198,144,032
(a) Land sold by the Department of Training and Workforce Development in October 2015 was correctly removed from the Land balance but not recorded as an equity distribution to government. The necessary entries to re-credit Asset Revaluation Reserve and debit Equity Distribution has been passed this year.
Information on fair value measurements is provided in Note 24. Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016
24 Fair value measurements
Assets measured at fair value : Level 1 Level 2 Level 3 Fair Value At end of period 2016 $ $ $ $ Land (Note 23) - 14,900,000 41,100,000 56,000,000 Buildings (Note 23) - - 135,504,753 135,504,753 - 14,900,000 176,604,753 191,504,753
Assets measured at fair value : Level 1 Level 2 Level 3 Fair Value At end of period
2015 $ $ $ $
Land (Note 23) - 14,900,000 41,100,000 56,000,000 Buildings (Note 23) - - 136,449,000 136,449,000
- 14,900,000 177,549,000 192,449,000
There were no transfers between Levels 1, 2 or 3 during the current and the previous period.
Fair value measurements using significant unobservable inputs (Level 3)
10 April 2016 Land Buildings $ $ Fair Value at start of period 41,100,000 136,449,000 Depreciation Expense - (944,247) Fair Value at end of period 41,100,000 135,504,753
31 December 2015 Land Buildings $ $ Fair Value at start of period 40,400,000 133,101,519 Additions - 2,084,687 Revaluation increments/(decrements) recognised in Other Comprehensive Income 700,000 4,750,573 Disposals - (143,000) Depreciation Expense - (3,344,779)
Fair Value at end of period 41,100,000 136,449,000
Valuation processes
There were no changes in valuation techniques during the period.
Transfers in and out of a fair value level are recognised on the date of the event or change in circumstances that caused the transfer. Transfers are generally limited to assets newly classified as non-current assets held for sale as Treasurer's instructions require valuations of land and buildings to be categorised within Level 3 where the valuations utilise significant Level 3 inputs on a recurring basis.
Buildings (Level 3 fair values) Fair value for existing use specialised building is determined by reference to the cost of replacing the remaining future economic benefits embodied in the asset, i.e. the depreciated replacement cost. Depreciated replacement cost is the current replacement cost of an asset less accumulated depreciation calculated on the basis of such cost to reflect the already consumed economic benefit, expired economic benefit or obsolescence , and optimisation (where applicable) of the asset. Determination of the current replacement cost of such assets held by the Institute is calculated by reference to the market observable replacement cost of a substitute asset of comparable utility and the gross project size specifications.
Valuation using depreciated replacement cost utilises the significant Level 3 input, consumed economic benefit/obsolescence of asset which is estimated by the Western Australian Land Information Authority (Valuation Services). The fair value measurement is sensitive to the estimate of consumption/obsolescence, with higher values of the estimate correlating with lower estimated fair values of buildings.
Land (Level 3 fair values) Fair value for restricted use land is based on comparison with market evidence for land with low level utility (high restricted use land). The relevant comparators of land with low level utility is selected by the Western Australian Land Information Authority (Valuation Services) and represents the application of a significant Level 3 input in this valuation methodology. The fair value measurement is sensitive to values of comparator land, with higher values of comparator land correlating with higher estimated fair values of land. Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016
Information about significant unobservable inputs (Level 3) in fair value measurements
Description Fair Value Fair Value Valuation Unobservable inputs 10 April 2016 31 December 2015 Technique(s) $000 $000
Land 41,100,000 41,100,000 Market Approach Selection of land with similar approximate utility
Buildings 135,504,753 136,449,000 Depreciated Consumed economic Replacement benefit/obsolescense of Cost asset. Historical cost of building per square metre floor area (m2)
Reconciliations of the opening and closing balances are provided in Note 23.
Basis of Valuation In the absence of market-based evidence due to the specialised nature of the assets, non-financial assets are valued at Level 3 of the fair value hierarchy on an existing use basis. The existing use basis recognises that restrictions or limitations have been placed on their use and disposal when they are not determined to be surplus to requirements. These restrictions are imposed by virtue of the assets being held to deliver a specific community service and the Institute's enabling legislation.
10 April 2016 31 December 2015 25 Intangible assets
Computer software At cost (a) 111,540 37,580 Accumulated amortisation (13,198) (8,241) 98,342 29,339 (a) The computer sofyware represents accounting software development
Reconciliations
Computer software Carrying amount at start of period 29,339 - Additions 73,959 37,580 Amortisation expense (4,956) (8,241) Carrying amount at end of period 98,342 29,339
26 Impairment of assets There were no indications of impairment to property, plant and equipment or intangible assets at 10 April 2016. The Institute held no goodwill or intangible assets with an indefinite useful life during the reporting period. At the end of the reporting period there were no intangible assets not yet available for use. All surplus assets as at 10 April 2016 have either been classified as assets held for sale or written off.
27 Payables
Current Trade payables 53,130 58,355 Accrued expenses 1,325,057 1,269,910 Accrued salaries and related costs 596,640 618,548 Paid parental leave payable 5,848 19,509 Total current 1,980,675 1,966,322
See also note 2(p) 'Payables' and note 36 'Financial Instruments'. Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016 10 April 2016 31 December 2015 $ $
28 Provisions
Current Employee benefits provision Annual leave (a) 3,284,138 2,501,800 Long service leave (b) 11,679,871 12,313,869 Professional leave ( c) (1,562,370) - Deferred Salary Scheme (d) 73,482 50,467 13,475,121 14,866,136 Other provisions Employment on-costs (e) 855,592 938,937
Total current 14,330,713 15,805,073
Non-current Employee benefits provision Long service leave (b) 4,034,195 2,892,754 Other provisions Employment on-costs (e) 254,949 182,963
Total non-current 4,289,144 3,075,717
(a) Annual leave liabilities have been classified as current as there is no unconditional right to defer settlement for at least 12 months after the end of the reporting period. Assessments indicate that actual settlement of the liabilities is expected to occur as follows:
Within 12 months of the end of the reporting period 2,995,095 2,324,313 More than 12 months after the end of the reporting period 289,043 177,487 3,284,138 2,501,800
(b) Long service leave liabilities have been classified as current where there is no unconditional right to defer settlement for at least 12 months after the end of the reporting period. Assessments indicate that actual settlement of the liabilities is expected to occur as follows:
Within 12 months of the end of the reporting period 6,675,434 4,827,419 More than 12 months after the end of the reporting period 9,038,631 10,379,203 15,714,065 15,206,622
( c) Professional leave liabilities have been classified as current as they must be cleared within the calendar year. As at 10 April 2016, leave has been taken in advance of the accrual resulting in a negative balance.
Within 12 months of the end of the reporting period (1,562,370) - More than 12 months after the end of the reporting period - - (1,562,370) -
(d) Deferred salary scheme liabilities have been classified as current where there is no unconditional right to defer settlement for at least 12 months after the end of the reporting period. Actual settlement of the liabilities is expected to occur as follows:
Within 12 months of the end of the reporting period 23,334 11,003 More than 12 months after the end of the reporting period 50,148 39,464 73,482 50,467
(e) The settlement of annual and long service leave liabilities gives rise to the payment of employment on-costs including workers' compensation insurance. The provision is the present value of expected future payments. The associated expense, apart from the unwinding of the discount (finance cost), is disclosed in note 10 'Other expenses'.
Movements in other provisions Movements in each class of provisions during the financial year, other than employee benefits, are set out below.
Employment on-cost provision Carrying amount at start of period 1,121,900 1,145,074 Payments/other sacrifices of economic benefits (11,359) (23,174) Carrying amount at end of period 1,110,541 1,121,900
29 Other liabilities
Current Income received in advance (a) 8,065,138 259,622 Money/deposits held in trust 19,354 20,056 Provision for Delivery and Performance Agreement Refund - 2,334,276 Total current 8,084,492 2,613,954
(a) Income received in advance comprises: Fee for service 256,798 157,149 Student fees and charges 5,595,683 - International students 2,212,657 102,473 8,065,138 259,622 Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016 10 April 2016 31 December 2015 $ $ 30 Equity The Western Australian Government holds the equity interest in the Institute on behalf of the community. Equity represents the residual interest in the net assets of the Institute. The asset revaluation surplus represents that portion of equity resulting from the revaluation of non-current assets.
Contributed equity Balance at start of period 69,799,121 69,748,249
Contributions by owners Transfer of net assets from Department of Training and Workforce Development - 50,872 Total contributions by owners 69,799,121 50,872
Distributions to owners Land - Lot 5 and 4980 Westfield Rd Seville Grove and Lot 9 Gillam Dr Seville Grove 1,030,000 -
Total distributions to owners 1,030,000 -
Balance at end of period 68,769,121 69,799,121
Reserves Asset revaluation surplus Balance at start of period 130,740,951 125,560,377 Net revaluation increments/(decrements): Land 1,030,000 430,000 Buildings - 4,750,574 Balance at end of period 131,770,951 130,740,951 131,770,951 130,740,951 Accumulated surplus/(deficit) Balance at start of period 3,165,849 (762,399) Result for the period (87,470) 3,928,248 Balance at end of period 3,078,379 3,165,849
Total Equity at end of period 203,618,451 203,705,921
31 Notes to the Statement of Cash Flows Reconciliation of cash Cash at the end of the financial year, as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows: Cash and cash equivalents 22,784,221 7,088,365 Short term deposits 4,000,000 17,558,828 26,784,221 24,647,193 Restricted cash and cash equivalents (refer to note 19 'Restricted cash and cash equivalents') 1,295,244 1,343,639 28,079,465 25,990,832
1 January 2016 Year Ended Reconciliation of net cost of services to net cash flows provided by/(used in) operating activities to 10 April 2016 31 December 2015 $ $
Net cost of services (21,936,310) (86,793,625)
Non-cash items: Depreciation and amortisation expense (note 8 'Depreciation and amortisation expense ) 1,410,696 5,213,636 Net Doubtful debts expense 60,921 (12,928) Resources received free of charge (note 18 ‘Income from State Government’) 640,801 2,813,306 Net (gain)/loss on sale of property, plant and equipment (note 17 ‘Net gain/(loss) on sale of non-current assets’) 1,279 172,048 Losses and write-offs (excludes cash shortages/thefts of money) (note 10 ‘Other expenses’) 3,880 21,262 (Increase)/decrease in assets: Current receivables (a) (4,458,750) 1,117,296 Current inventories (1,700) 44,332 Other current assets (b) 314,451 247,780 Increase/(decrease) in liabilities Current payables (a) 10,472 (1,085,861) Current provisions (1,474,360) (782,152) Other current liabilities 7,804,813 (757,980) Non-current provisions 1,213,427 (979,587) Net GST receipts/(payments) (c) (316,153) (1,523,452) Change in GST in receivables/payables (d) 313,445 1,530,060 Net cash used in operating activities (16,413,088) (80,775,865)
(a) Note that the Australian Taxation Office (ATO) receivable/payable in respect of GST and the receivable/payable in respect of the sale/purchase of non-current assets are not included in these items as they do not form part of the reconciling items. (b) Includes accrued expenses for non-current assets. (c) This is the net GST paid/received, i.e. cash transactions (d) This reverses out the GST in receivables and payables At the end of the reporting period, the Institute had fully drawn on all financing facilities, details of which are disclosed in the financial statements . Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016 10 April 2016 31 December 2015 $ $ 32 Commitments
Non-cancellable operating lease commitments Commitments for minimum lease payments are payable as follows: Within 1 year 800,195 816,160 Later than 1 year and not later than 5 years 1,413,170 1,560,711 Later than 5 years 2,906,716 3,134,762 5,120,081 5,511,633 Capital expenditure commitments Capital expenditure commitments, being contracted capital expenditure additional to the amounts reported in the financial statements, are payable as follows: Within 1 year 712,965 719,687 712,965 719,687 The capital commitments include amounts for: Buildings 712,965 719,687
33 Contingent liabilities and contingent assets
The Institute has no contingent liabilities or contingent assets.
34 Events occurring after the reporting period
Polytechnic West was closed on 10 April 2016 under the Vocational Education and Training (Colleges Closure and Establishment) Order. The South Metropolitan TAFE was created on 11 April 2016. All the assets, rights and liabilities of Polytechnic West as at 10 April 2016 were transferred to South Metropolitan TAFE which form the South Metropolitan TAFE's opening balances as at 11 April 2016. 35 Explanatory statement Significant variations between estimates and actual results for 2016 and between actual results for 2015 and 2016 are shown below. Significant variations are considered to be those greater than 5% and 2% of Total Cost of Services. STATEMENT OF COMPREHENSIVE INCOME Note 2016 2016 2015 Variance Variance Actual Actual between between 1 January Estimate Year ended Estimate and Actual 2016 to 10 April for 12 months 31 December Actual 1 and 2015 A COST OF SERVICES $ $ $ $ $ Expenses Employee benefits expense 23,595,187 92,381,478 93,725,409 (68,786,291) (70,130,222) Supplies and services 5,588,468 20,548,058 22,242,961 (14,959,590) (16,654,493) Depreciation and amortisation expense 1,410,696 5,195,338 5,213,636 (3,784,642) (3,802,940) Grants and subsidies 73,177 428,400 439,046 (355,223) (365,869) Cost of sales - - 43,965 - (43,965) Loss on disposal of non-current assets 1,279 - 172,048 1,279 (170,769) Other expenses 2,432,692 9,547,754 10,317,151 (7,115,062) (7,884,459) Total cost of services 33,101,499 128,101,028 132,154,216 (94,999,529) (99,052,717) Income Revenue Fee for service 5,305,411 21,004,936 22,022,703 (15,699,525) (16,717,292) Student fees and charges 5,131,840 21,764,008 18,856,243 (16,632,168) (13,724,403) Ancillary trading 210,856 907,794 968,726 (696,938) (757,870) Sales - - 37,330 - (37,330) Interest revenue 219,040 831,928 937,258 (612,888) (718,218) Other revenue 298,042 2,180,770 2,538,331 (1,882,728) (2,240,289) Total revenue 11,165,189 46,689,436 45,360,591 (35,524,247) (34,195,402) Total income other than income from State Government 11,165,189 46,689,436 45,360,591 (35,524,247) (34,195,402)
NET COST OF SERVICES 21,936,310 81,411,592 86,793,625 (59,475,282) (64,857,315) INCOME FROM STATE GOVERNMENT Service appropriation 21,208,039 79,144,000 87,908,567 (57,935,961) (66,700,528) Services received free of charge 640,801 2,532,432 2,813,306 (1,891,631) (2,172,505) Total income from State Government 21,848,840 81,676,432 90,721,873 (59,827,592) (68,873,033)
SURPLUS/(DEFICIT) FOR THE PERIOD (87,470) 264,840 3,928,248 (352,310) (4,015,718)
OTHER COMPREHENSIVE INCOME Changes in asset revaluation surplus B 1,030,000 - 5,180,574 1,030,000 (4,150,574) Total other comprehensive income 1,030,000 - 5,180,574 1,030,000 (4,150,574) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 942,530 264,840 9,108,822 677,690 (8,166,292)
Narrative on variances between 2016 estimate and 2016 actual 1. The variance is due to the estimates being prepared on the basis of a full year of operations whilst the actual results reflect that the Institute was closed on 10 April 2016. Narrative on variances between 2016 actual and prior year A. The variance is due to the prior year actuals being for a full year of operations whilst the actual results reflect that the Institute was closed on 10 April 2016. B. Land sold by the Department of Training and Workforce Development in October 2015 was correctly removed from the Land balance but not recorded as an equity distribution to government. The necessary entries to re-credit Asset Revaluation Reserve and debit Equity Distribution has been passed this year. Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016
STATEMENT OF FINANCIAL POSITION Note 2016 2016 2015 Variance Estimate Actual between Variance Actual as at 31 as at 31 Estimate and between Actual as at 10 April December December Actual 2 2016 and 2015 C $ $ $ $ $ ASSETS Current Assets Cash and cash equivalents 26,784,221 20,161,557 24,647,193 6,622,664 2,137,028 Restricted cash and cash equivalents 954,505 4,069,898 1,073,825 (3,115,393) (119,320) Inventories 12,475 10,775 10,775 1,700 1,700 Receivables 6,315,296 3,449,546 1,914,759 2,865,750 4,400,537 Other current assets 437,205 1,616,905 1,077,250 (1,179,700) (640,045) Total Current Assets 34,503,702 29,308,680 28,723,802 5,195,022 5,779,900
Non-Current Assets Restricted cash and cash equivalents 340,739 - 269,814 340,739 70,925 Property, plant and equipment 197,360,692 187,197,355 198,144,032 10,163,337 (783,340) Intangible assets 98,342 17,623 29,339 80,719 69,003 Total Non-Current Assets 197,799,773 187,214,978 198,443,185 10,584,795 (643,412)
TOTAL ASSETS 232,303,475 216,523,658 227,166,987 15,779,817 5,136,488
LIABILITIES Current Liabilities Payables 1,980,675 1,534,397 1,966,322 446,278 14,353 Provisions 14,330,713 13,719,933 15,805,073 610,780 (1,474,360) Other current liabilities 8,084,492 3,884,706 2,613,954 4,199,786 5,470,538 Total Current Liabilities 24,395,880 19,139,036 20,385,349 5,256,844 4,010,531
Non-Current Liabilities Provisions 4,289,144 4,077,530 3,075,717 211,614 1,213,427 Total Non-Current Liabilities 4,289,144 4,077,530 3,075,717 211,614 1,213,427
TOTAL LIABILITIES 28,685,024 23,216,566 23,461,066 5,468,458 5,223,958
NET ASSETS 203,618,451 193,307,091 203,705,921 10,311,360 (87,470)
EQUITY Contributed equity 68,769,121 69,799,121 69,799,121 (1,030,000) (1,030,000) Reserves 131,770,951 122,898,377 130,740,951 8,872,574 1,030,000 Accumulated surplus/(deficit) D 3,078,379 609,593 3,165,849 2,468,786 (87,470) TOTAL EQUITY 203,618,451 193,307,091 203,705,921 10,311,360 (87,470)
Narrative on variances between 2016 estimate and 2016 actual 2. The variance is due to the estimates reflecting the financial position of the institute after a full year of operations but the actual results reflect that the Institute was closed on 10 April 2016.
Narrative on variances between 2016 actual and prior year C. The variance is a result of the balances in 2015 reflecting a full year of operations in comparison to 2016 when the Institute was closed on 10 April 2016. D. The variance in accumulated surplus/deficit represents the deficit generated for the period 1 January to 10 April 2016. Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016
STATEMENT OF CASH FLOWS Note 2016 2016 2015 Variance Variance Actual Actual between between 1 January Estimate Year ended Estimate and Actual 2016 to 10 April for 12 months 31 December Actual 3 and 2015 E $ $ $ $ $ CASH FLOWS FROM STATE GOVERNMENT Service appropriation - Department of Training and Workforce Development 18,873,764 79,144,311 82,601,018 (60,270,547) (63,727,254) Capital appropriation - Department of Training and Workforce Development - - 1,000,000 - (1,000,000) Net cash provided by State Government 18,873,764 79,144,311 83,601,018 (60,270,547) (64,727,254)
Utilised as follows: CASH FLOWS FROM OPERATING ACTIVITIES Payments Employee benefits (23,809,555) (92,081,478) (96,538,391) 68,271,923 72,728,836 Supplies and services (4,776,069) (18,015,626) (19,389,054) 13,239,557 14,612,985 Grants and subsidies (73,177) (428,400) (439,046) 355,223 365,869 GST payments on purchases (579,159) (1,996,276) (2,574,046) 1,417,117 1,994,887 Other payments (2,031,763) (9,400,134) (10,135,889) 7,368,371 8,104,126
Receipts Fee for service 7,332,509 20,335,198 22,808,008 (13,002,689) (15,475,499) Student fees and charges 6,180,590 21,646,251 18,603,302 (15,465,661) (12,422,712) Ancillary trading 210,856 907,794 968,726 (696,938) (757,870) Interest received 258,889 832,202 926,615 (573,313) (667,726) GST receipts on sales 263,006 1,300,000 1,050,594 (1,036,994) (787,588) GST receipts from taxation authority 313,445 700,000 1,530,060 (386,555) (1,216,615) Sales - - 37,330 - (37,330) Other receipts 297,340 2,120,783 2,375,926 (1,823,443) (2,078,586) Net cash used in operating activities (16,413,088) (74,079,686) (80,775,865) 57,666,598 64,362,777 CASH FLOWS FROM INVESTING ACTIVITIES Payments Purchase of non-current physical assets (374,575) (2,930,000) (2,969,514) 2,555,425 2,594,939 Receipts Proceeds from sale of non-current assets 2,532 - 3,620 2,532 (1,088) Net cash used in investing activities (372,043) (2,930,000) (2,965,894) 2,557,957 2,593,851
Net increase/(decrease) in cash and cash equivalents 2,088,633 2,134,625 (140,741) (45,992) 2,229,374
Cash and cash equivalents at the beginning of period 25,990,832 22,096,830 26,131,573 3,894,002 (140,741)
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD 28,079,465 24,231,455 25,990,832 3,848,010 2,088,633 -
Narrative on variances between 2016 estimate and 2016 actual 3. The variance is due to the estimates being prepared on the basis of a full year of operations whilst the actual results reflect that the Institute was closed on 10 April 2016.
Narrative on variances between 2016 actual and prior year E. The variance is due to the prior year actuals being for a full year of operations whilst the actual results reflect that the Institute was closed on 10 April 2016.
36 Financial instruments
(a) Financial risk management objectives and policies
Approximately 58% of the Institutes funding is under an agreement with the State Government for delivery of training with an additional 24% of other revenue from students associated with this delivery. The Institute therefore has a high dependence on government for the continued delivery of training services. The level of service provided to Government is negotiated annually with modifications for growth or reduction to areas forming part of the overall strategic plan of the Institute.
Financial instruments held by the Institute are cash and cash equivalents, restricted cash and cash equivalents, receivables, payables and other liabilities. The Institute has limited exposure to financial risks. The Institute's overall risk management program focuses on managing the risk identified below:
Credit risk Credit risk arises when there is the possibility of the Institute’s receivables defaulting on their contractual obligations resulting in financial loss to the Institute.
The maximum exposure to credit risk at the end of the reporting period in relation to each class of recognised financial assets is the gross carrying amount of those assets inclusive of any allowance for impairment as shown in the table at note 36(c) ‘Financial instruments disclosures’ and note 21 ‘Receivables’.
Credit risk associated with the Institute’s financial assets is minimal because the Institute trades only with recognised, creditworthy third parties. The Institute has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that the Institute's exposure to bad debt is minimal. At the end of the reporting period there are no significant concentrations of credit risk. Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016
Liquidity risk Liquidity risk arises when the Institute is unable to meet its financial obligations as they fall due.
The Institute is exposed to liquidity risk through its trading in the normal course of business. The Institute has appropriate procedures to manage cash flows including drawdowns of appropriations by monitoring forecast cash flows to ensure that sufficient funds are available to meet its commitments.
Market risk Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect the Institute's income or the value of its holdings of financial instruments. The Institute does not trade in foreign currency and is not materially exposed to other price risks (for example, equity securities or commodity prices changes). (b) Categories of financial instruments The carrying amounts of each of the following categories of financial assets and financial liabilities at the end of the reporting period are : 10 April 2016 31 December 2015 $ $ Financial Assets Cash and cash equivalents 26,784,221 24,647,193 Restricted cash and cash equivalents 1,295,244 1,343,638 Receivables (a) 6,138,390 1,740,561
Financial Liabilities Payables 1,980,675 1,966,322 Other liabilities - 2,334,276 (a) The amount of loans and receivables excludes GST recoverable from the ATO (statutory receivable).
(c) Financial instrument disclosures Credit risk The following table discloses the Institute's maximum exposure to credit risk and the ageing analysis of financial assets. The Institute's maximum exposure to credit risk at the end of the reporting period is the carrying amount of financial assets as shown below. The table discloses the ageing of financial assets that are past due but not impaired and impaired financial assets. The table is based on information provided to senior management of the Institute. The Institute does not hold any collateral as security or other credit enhancements relating to the financial assets it holds.
Ageing analysis of financial assets Past due but not impaired
Not past due and 3 months to 1 Impaired Carrying Amount not impaired Up to 1 month 1-3 months year 1-5 Years More than 5 years Financial Assets $000 $000 $000 $000 $000 $000 $000 $000 Financial Assets
10 April 2016 Cash and cash equivalents 26,784 26,784 ------Restricted cash and cash equivalents 1,295 1,295 ------Receivables (a) 6,138 3,887 969 1,282 - - - 734 34,217 31,966 969 1,282 734 31 December 2015 Cash and cash equivalents 24,647 24,647 ------Restricted cash and cash equivalents 1,344 1,344 ------Receivables (a) 1,740 1,311 342 87 - - - 673 27,731 27,302 342 87 - - - 673
(a) The amount of receivables excludes the GST receivables from the ATO (statutory receivable).
Liquidity risk and interest rate exposure
The following table details the Institute’s interest rate exposure and the contractual maturity analysis of financial assets and financial liabilities. The maturity analysis section includes interest and principal cash flows. The interest rate exposure section analyses only the carrying amounts of each item.
Interest rate exposure and maturity analysis of financial assets and financial liabilities
Interest rate exposure Maturity dates Weighted Average Effective Interest Fixed Interest Non-Interest 3 months to 1 Rate Carrying Amount Rate Variable Interest Rate Bearing Nominal Amount Up to 1 month 1-3 months year 1-5 Years More than 5 years % $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 10 April 2016 Financial Assets Cash and cash equivalents 2.24% 26,784 - 26,765 19 26,784 22,784 - 4,000 - - Restricted cash and cash equivalents 2.24% 1,224 - 1,224 - 1,224 1,224 - - - - Receivables (a) 6,138 - - 6,138 6,138 6,138 - - - - 34,146 - 27,989 6,157 34,146 30,146 - 4,000 - - Financial Liabilities Payables 1,981 - - 1,981 1,981 1,981 - - - - 1,981 - - 1,981 1,981 1,981 - - - - (a) The amount of receivables excludes the GST receivables from the ATO (statutory receivable). Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016
Interest rate exposure Maturity dates Weighted Average Effective Interest Fixed Interest Non-Interest 3 months to 1 Rate Carrying Amount Rate Variable Interest Rate Bearing Nominal Amount Up to 1 month 1-3 months year 1-5 Years More than 5 years % $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 31 December 2015 Financial Assets Cash and cash equivalents 2.44% 24,647 - 24,622 25 24,647 20,647 - 4,000 - - Restricted cash and cash equivalents 2.44% 1,344 - 1,344 - 1,344 1,344 - - - - Receivables (a) 1,740 - - 1,740 1,740 1,740 - - - - 27,731 - 25,966 1,765 27,731 23,731 - 4,000 - -
Financial Liabilities Payables 1,966 - - 1,966 1,966 1,966 - - - - Other liabilities 2,334 - - 2,334 2,334 - - 2,334 - - 4,301 - - 4,300 4,300 1,966 - 2,334 - -
(a) The amount of receivables excludes the GST receivables from the ATO (statutory receivable).
Interest rate sensitivity analysis The following table represents a summary of the interest rate sensitivity of the Institute's financial assets and liabilities at the end of the reporting period on the surplus for the period and equity for a 1% change in interest rates. It is assumed that the change in interest rates is held constant throughout the reporting period.
- 100 Basis Points + 100 Basis Points Carrying amount Surplus Equity Surplus Equity 10 April 2016 $ $ $ $ $
Financial Assets Cash and Cash equivalents 26,765,271 (267,652) (267,652) 267,652 267,652 Restricted cash and cash equivalents 1,295,244 (12,243) (12,243) 12,243 12,243
Total Increase/(Decrease) (279,895) (279,895) 279,895 279,895
- 100 Basis Points + 100 Basis Points Carrying amount Surplus Equity Surplus Equity 31 December 2015 $ $ $ $ $
Financial Assets Cash and Cash equivalents 24,622,493 (246,225) (246,225) 246,225 246,225 Restricted cash and cash equivalents 1,343,638 (13,436) (13,436) 13,436 13,436
Total Increase/(Decrease) (259,661) (259,661) 259,661 259,661
Fair values All financial assets and liabilities recognised in the Statement of Financial Position, whether they are carried at cost or fair value, are recognised at amounts that represent a reasonable approximation of fair value unless otherwise stated in the applicable notes. Polytechnic West NOTES TO THE FINANCIAL STATEMENTS 16GLACT &PREV_LDG FOR THE PERIOD 1 JANUARY 2016 TO 10 APRIL 2016 1 January 2016 Year Ended to 10 April 2016 31 December 2015
37 Remuneration of members of the Accountable Authority and Governing Council
Remuneration of members of the Institute The number of members of the Institute whose total of fees, salaries, superannuation, non-monetary benefits and other benefits for the financial year, fall within the following bands are:
$ $0 - $10,000 7 9 $10,001 - $20,000 - 1 $60,001 - $70,000 1 - $230,001-$240,000 - 1
$ $ Base remuneration and superannuation 74,530 278,341 Annual leave and long service leave accruals (2,394) (11,218) Other benefits - - Total remuneration of the members of the Institute 72,136 267,123
The total remuneration includes the superannuation expense incurred by the Institute in respect of members of the Institute.
Remuneration of senior officers The number of senior officers other than senior officers reported as members of the Institute, whose total of fees, salaries, superannuation, non-monetary benefits and other benefits for the financial year, fall within the following bands are:
$ $40,001 - $50,000 4 - $50,001 - $60,000 3 1 $70,001 - $80,000 - 1 $100,001 - $110,000 - 1 $110,001 - $120,000 - 1 $170,001 - $180,000 - 1 $180,001 -$190,000 - 3 $190,001 -$200,000 - 1
$ $ Base remuneration and superannuation 334,646 1,221,906 Annual leave and long service leave accruals 7,194 17,384 Other benefits 8,959 41,456 Total remuneration of senior officers 350,799 1,280,746
The total remuneration includes the superannuation expense incurred by the Institute in respect of senior officers other than senior officers reported as members of the Institute.
No senior officers are members of the Pension Scheme.
38 Remuneration of auditor Remuneration paid or payable to the Auditor General in respect to the audit for the current financial year is as follows: $ $ Auditing the accounts, financial statements and key performance indicators 64,000 132,500
The payment for the 2016 audit will be made by the Department of Training and Workforce Development.
39 Related bodies The Institute has no related bodies.
40 Affiliated bodies The Institute has no affiliated bodies.
41 Supplementary financial information
(a) Write-Offs $ $ Write-offs approved by Executive Council Public Property - 15,307 Bad debts 114,725 144,442 Other - Payables Adjustment Notes 3,880 - Total write-offs approved by Executive Council 118,605 159,749
Write-offs approved by Minister Bad debts - 190,790 Total write-offs approved by Minister 190,790
42 Schedule of income and expenditure by service
The Institute provides only one service (as defined by Treasurer's Instruction 1101 (9)) and that is Vocational Education and Training Delivery.