ANNUAL REPORT PO Box 886 2013 Bairnsdale Vic, 3875 ABN: 41 975 960 230 Advancetafe.Edu.Au 1300 133 717

ANNUAL REPORT PO Box 886 2013 Bairnsdale Vic, 3875 ABN: 41 975 960 230 advancetafe.edu.au 1300 133 717

International callers +61 3 5152 0700 Interstate callers 03 5152 0700

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

2013_ANNUAL REPORT_FINAL.indd 1 1/05/14 3:58 PM WhereWhere to find to findus us

We have three mainWe campuses have three at Sale,main Bairnsdalecampuses atand Sale, Lakes Bairnsdale and Lakes Entrance, as well asEntrance, specialist as education well as specialist centres located education across centres located across south-east Victoria, south-eastencompassing Victoria, the Wellingtonencompassing Shire the and Wellington Shire and East Gippsland ShireEast region. Gippsland Shire region. We deliver coursesWe in online deliver and courses blended in online learning and blended learning programs across theprograms state. across the state.

The Hon. Nick Wakeling,The Hon. MLA Nick Wakeling, MLA Minister for HigherMinister Education for Higher and Skills Education and Skills

24 March 2014 2824 AprilMarch 2014 2014

Dear Minister, Dear Minister,

In accordance withIn theaccordance requirements with the of regulations requirements under of regulations the Financial under Management the Financial Management Act 1994, I am pleasedAct 1994, to submit I am pleased for your to information submit for your and informationpresentation andto Parliament,presentation to Parliament, Bairnsdale Bairnsdale the Advance TAFEthe Annual Advance Report TAFE for Annual the year Report ending for 31 the December year ending 2013. 31 December 2013. Lakes EntranceLakes Entrance

The Annual ReportThe was Annual approved Report by wasthe Advanceapproved TAFE by the Board Advance on 24 TAFE March Board 2014. on 2428 MarchApril 2014. 2014. Sale Sale Yours sincerely, Yours sincerely,

Melbourne Melbourne

Mr Scott RossettiMr Scott Rossetti Chair, Chair, Advance TAFE BoardAdvance TAFE Board

SALE LOCATIONSSALE LOCATIONS BAIRNSDALE LOCATIONSBAIRNSDALE LOCATIONSLAKES ENTRANCELAKES LOCATION ENTRANCE LOCATION Fulham Campus Fulham Campus Bairnsdale Campus Bairnsdalewith G-tec Campus with Seamec G-tec Seamec Work Safety CentreWork Safety Centre Bairnsdale Trade CentreBairnsdale Trade Centre G-tec G-tec Oaktree Restaurant Oaktree Restaurant Sale Campus Sale Campus

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

2013_ANNUAL REPORT_FINAL.indd 2 1/05/14 3:58 PM advancetafe.edu.auadvancetafe.edu.au | 1300 133 | 1300 717 133 717 Contents

WELCOME...... 4

ABOUT ADVANCE TAFE...... 5

GOVERNANCE AND MANAGEMENT...... 6 The Board Organisational Chart Executive Team

STUDENTS AND STAFF...... 8 Support Services for Students Highlights of 2013 Our People Commercial Activities

OPERATIONS: STATUTORY REQUIREMENTS & STATEMENTS...... 14 Compliance Risk Statement Advance TAFE declaration on Statement of Performance Auditor's Report on Statement of Performance Statement of Performance Financial Summary

FINANCIAL STATEMENT...... 20 Contents Index Advance TAFE Declaration Independent Auditor’s Report Financial Report

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

DISCLOSURE INDEX...... 67

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

2013 has been a year of dramatic change in the Victorian Vocational Advance TAFE is meeting the training challenge to provide industry Education and Training (VET) sector, filled with challenges and with suitably qualified employees. Throughout the year Advance opportunities for Advance TAFE. TAFE transitioned many courses to be delivered online and modified teaching models to embrace new technologies, a growing focus on Major policy shifts have opened the educational sector to great flexible delivery and a higher emphasis by employers on practical, competition where the demand for training is driven by market levers work-based learning. of price, information and supply contestability and new arrivals have established themselves on the landscape. Competition is greater The planned departure of major manufacturers is a prime indicator than ever before. that Victoria’s economy is fundamentally changing and transforming as service-oriented industries develop. Advance TAFE is well suited In January of this year significant changes to funding arrangements to and has a history of providing education and training for this came into effect, such as the removal of full service-provider changing workforce along with increasing pathways from VET to funding, payments for ‘small’ (regional) TAFEs replaced by a 10% higher education. regional loading and the removal of the additional TAFE differential on training (around 20% above non-TAFE rate). On July 31 of this year Advance TAFE appointed a new Chief Executive Officer, Shaun McDonagh, who has extensive skills in strategy and These changes to revenue streams along with the shift to a student- business development. Shaun’s substantial skills and experience in centred, demand-based funding system have meant Advance TAFE achieving business growth objectives in education institutes and the must implement reforms that reflect the needs of the changed private sector are well suited to challenges ahead. Advance TAFE marketplace. would like to thank Acting Chief Executive Officer, Jane Ponting, for As a result Advance TAFE has begun the process of instigating her stewardship during 2013. substantial changes to the direction of the organisation, to systems Advance TAFE would also like to thank Lyndon Webb, who stepped and infrastructure, and refining processes to ensure they are down in April as Board Chair but continues to be a key member of competitive and sustainable. Continual modification and adaptation the Board and incoming Board Chair, Scott Rossetti whose strong of a business model committed to servicing our traditional markets leadership and commitment to education augments the Board’s of vocational training and a strong focus on engaging new cohorts, capacity for sound and strategic governance. new markets, new partners and innovative courses are fundamental in Advance TAFE’s transition into a profitable, independent education In June 2013 the Board welcomed Angus Hume as a Director and his provider. presence has greatly benefitted Board deliberations. A review of Advance TAFE’s offerings has led to the teach-out of some Inevitably in the course of extreme change there are difficult non-sustainable courses in 2014. The closure of the Advance TAFE challenges – 2013 could fairly be described as a year of challenges Farmtec campus and Café Rossi, the commercial training restaurant, and Advance TAFE has faced them with a determination that reflects now effective, is an example of responsible asset management and well on our staff, student and supporters in the community. The reflects the retracting demand for some agricultural and hospitality Institute looks forward to the challenges that next year will bring, courses. confident that through the efforts of our people and our partners 2014 will see a transformation of both Advance TAFE and tertiary Consistent with government reform objectives for greater provision in the region. collaboration between education providers, Advance TAFE entered into a Memorandum of Understanding with GippsTAFE and Federation University Australia to pursue a new formal partnership which seeks to create a sustainable future for Gippsland-based education and training. The new model will be developed further in 2014, as the outcome of the capital project bids submitted under the Scott Rossetti Shaun McDonagh TAFE Structural Adjustment Fund and government investment in the preferred model is known. Board Chair Chief Executive Officer Sectorial reform is also being driven by the ‘buyers’ of education and training as employers and students seek greater flexibility in course delivery approaches to accommodate work and home commitments. Advance TAFE now has to support a more diverse student population with the changing nature of work creating a demand for not only pre-employment but life-long learning as the existing labour force must upskill to keep pace with the market economy.

2013_ANNUAL REPORT_FINAL.indd 4 1/05/14 3:58 PM About Advance TAFE

Advance TAFE is the tertiary education provider for Victoria’s Eastern region with a heritage that dates back more than 100 years. Our campuses are located within the Wellington and East Gippsland OUR VISION Shires with a combined resident population of nearly 100,000. We also deliver training across Victoria and nationally. OUR STRATEGIC DIRECTION STATEMENT Advance TAFE is a recognised TAFE Institution operating in 2009-2018 VISION IS FOR ADVANCE TAFE accordance with the Education and Training Reform Act 2006. The TO BE THE TERTIARY EDUCATION HUB OF Institute is a registered training organisation with the Australian VICTORIA’S EASTERN REGION. Skills Quality Authority (ASQA). Throughout 2013 our governing Minister was the Hon. Peter Hall, MLC, Minister for Higher WE DELIVER WORLD-CLASS TRAINING, Education and Skills and Minister responsible for the Teaching HIGHER EDUCATION AND WORKFORCE Profession. DEVELOPMENT SOLUTIONS. We provide nationally recognised training and qualifications from Certificate I level to Advanced Diplomas. Advance TAFE has over 150 OUR GRADUATES ARE RECOGNISED AS courses encompassing a diverse range of study areas including: • Aviation CONTRIBUTORS TO GLOBAL, SOCIAL AND • Automotive ECONOMIC WELLBEING. • Building & Construction • Business & Information Technology TO ACHIEVE OUR VISION WE WILL: • Civil Construction & Engineering • Commercial Cookery 1. CONNECT THROUGH LEARNING • Community Services & Health • Conservation & Land Management 2. BUILD OUR SKILLS AND CAPABILITY • Design & Photoimaging • Education Support & Children’s Services 3. ENGAGE AND COLLABORATE • Food processing • Hairdressing 4. PROVIDE WORKFORCE SOLUTIONS • Horticulture • Maritime • Racing 5. BUILD OUR MARKET SHARE Our students are able to complete their secondary education in an adult learning environment with VCE and VCAL studies coordinated through our specialist G-tec programs. Our partnerships with leading universities such as Federation University Australia and Deakin University have provided our students with the opportunity to study locally for full degrees and associate degrees.

2013_ANNUAL REPORT_FINAL.indd 5 1/05/14 3:58 PM Governance & management

THE BOARD

The Institute Board is established under the Constitution of Advance TAFE, which was created by an Order in Council dated 10 April 2013 and published in the Government Gazette. By virtue of the Constitution, the Institute is a Body Corporate by operation of sections 3.1.12 and 6.1.32 of the Education and Training Reform Act 2006. In accordance with section 3.1.11(2) of the Act, the Board of Advance TAFE is established to oversee and govern the Institute. The Board’s business is consistent with the powers and functions set out in the Institute Constitution. The terms of reference and accountabilities of the Board Committees are provided in the Board Manual. Board Directors discharge their duties according to standards of conduct articulated in Division 9 of the Constitution and relevant legislation, such as the Public Administration Act 2004.

2013 ADVANCE TAFE BOARD MEMBERS

BOARD MEMBER CATEGORY OF MEMBERSHIP COMMENCEMENT DATE EXPIRY DATE

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

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

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

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

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

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

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

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

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

2013_ANNUAL REPORT_FINAL.indd 6 1/05/14 3:58 PM BOARD

CHIEF EXECUTIVE OFFICER Shaun McDonagh

EXECUTIVE ASSISTANT TO CEO Sharon Junker

EXEC MANAGER EXEC MANAGER MANAGER POLICY & CORPORATE SERVICES LEARNING & INNOVATION CHIEF FINANCE OFFICER QUALITY (BOARD SECRETARY) Brenton Barker Nick Fordham Karen Bird Steven Columbus

ACTING MANAGER ACTING MANAGER BUSINESS MANAGER TRADES & SUB-TEAM LEADER QUALITY ASSURANCE HUMAN RESOURCES DESIGN & SERVICE INDUSTRIES WORK SAFETY FINANCE CO-ORDINATOR David Kee Martin Grundy Fred Vanderslik Bernie Kelly Trish Shemlowski

MANAGER FACILITIES MANAGER YOUTH KOORI MANAGER CATCHMENT CO-ORDINATOR RISK & GENERAL EDUCATION LAND & SEA MANAGEMENT Rob Strecker Vacant Pam Waters Richard Owen

MANAGER INFORMATION MANAGER MARKETING & ACTING MANAGER TECHNOLOGY SERVICES CORPORATE COMM COMMUNITY SERVICES, EDUCATION & HEALTH Vacant Paula White Di Deppeler

ACTING MANAGER MANAGER MANAGER HEALTH, SAFETY & RISK STUDENT SERVICES STUDENT ADMIN Chris Rankin Craig Kingham Kerrie-Lyn Young

MANAGER ACTING MANAGER, HIGHER eLEARNING EDUCATION PROJECTS Vacant Lynda Capes

MANAGER, BLENDED DELIVERY BUSINESS DEVELOPMENT Tony Peck Marcia Thomas

EXECUTIVE TEAM Karen Bird EXECUTIVE TEAM RESIGNATIONS Executive Manager Learning Innovation DURING 2013 Shaun McDonagh Appointed: 30 September 2013 Chief Executive Officer Responsibility: Catherine Brigg Appointed: 31 July 2013 Providing strategic and operational Executive Manager Learning and Innovation Responsibility: educational leadership to teaching and Appointed: 20 July 2003 Providing strategic leadership and support teams, and giving direction and Resigned: 12 July 2013 management. Securing resources and advice on all educational policy, innovation ensuring their effective utilisation across and planning issues and on student Jane Ponting the institute to meet the requirements of management. government, enterprises and individuals. Executive Manager Development Implementing the strategic direction Appointed: 19 August 2011 established by the Institute’s Board. Nick Fordham Resigned: 13 September 2013 Executive Manager Corporate Services Acting CEO Brenton Barker Appointed: 30 September 2013 Appointed: 22 December 2012 Chief Finance Officer Responsibility: Resigned: 30 July 2013 Appointed: 23 September 2013 Providing executive and operational leadership for the Institute’s facilities, assets Peter Quilligan Responsibility: and equipment and information technology Providing executive leadership for the Executive Manager Corporate Services services. The role also has the corporate efficient and effective management ofthe Appointed: 4 April 2005 responsibility for Workplace Health & Safety. Institute’s financial resources. Resigned: 1 July 2013

2013_ANNUAL REPORT_FINAL.indd 7 1/05/14 3:58 PM Support Services for Students

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

ACCESS & EQUITY COUNSELLING AND WELFARE

Advance TAFE support for students in priority access and equity SERVICES groups continued in 2013. The goal of access and equity support is to improve the participation in education of groups experiencing Advance TAFE counsellors provide responsive clinical services disadvantage and unequal educational outcomes. and referral for students who significantly foster ongoing study engagement and a greater course completion level. Promotion of qualifications, and the increased likelihood of employment that occurs following successful completion, is a key Welfare services and referral are also an important component of component of student engagement, especially of learners that may student support. Welfare support assists students with the essential be difficult to engage. Support is tailored to individuals to maximise requirements to engage in learning - stable accommodation, their success through building aspirations, developing self-esteem, transport, income, peer and external support. In the Gippsland and promoting engagement. region, meeting these basic needs may be problematic foran individual, but linking vulnerable students to these channels of Work in this important area is promoted by all staff at Advance TAFE external support enhances the likelihood of successful learning - from initial engagement through to graduation. Specialist support outcomes. staff include: Koori Liaison, Disability, Counsellors, Careers and Foundation-skills trainers. During 2013, more than 400 students benefited from counselling or welfare support. Interventions varied according to the intensity and critical need experienced by the individual needing help. SCHOLARSHIPS

Advance TAFE offered more than $50,000 in scholarships in 2013. DISABILITY A sizeable component of this amount was externally sourced scholarships, including Industry Funds. In 2013, 34 students registered for disability support. Support for students with disabilities is allocated in a manner to promote student Scholarships are awarded to students who experienced disadvantage, independence – where needed, students are assisted to recognise further supporting engagement of underrepresented groups. their minimum requirements for their education at Advance TAFE. In 2013, the following scholarships were awarded: Support can include a Disability Support Worker, but this level of support is only for targeted needs and is reduced as the student The Advance TAFE Dream Study Achieve Scholarships for students builds confidence and knowledge. under 25 (four awarded). The Advance TAFE Community Engagement Scholarships, for students experiencing financial hardship (12 awarded). CAREER ADVICE The Advance TAFE Disability Scholarships assisted three students with disabilities or mental health conditions to engage in study. Specialised career advisors assist students with course advice, sourcing placements, and in making informed decisions about the Industry Fund scholarships for Maritime study (worth $26,000). availability and likelihood of successful career engagement following Dairy Industry Scholarships (two awarded) – external scholarship. completion of education. Kids Under Cover Scholarships (five participants) – external Advance TAFE Career Counsellors also liaise with networks across scholarships with applications made via Department of Human Gippsland, and participate in specialist activities such as resume Services. writing and job interview skills with students and with specialist programs. ACCESS PROGRAMS

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

2013_ANNUAL REPORT_FINAL.indd 8 1/05/14 3:58 PM Highlights of 2013

CHANGE AT THE TOP OLYMPIC EFFORT

In April Wellington Shire Mayor Scott Rossetti was announced Sale G-tec student and basketball star Skye Neilson-Vold, 20, Advance TAFE board chairman, replacing Lyndon Webb, who was represented Australia at the first Special Olympic Asia Pacific Regional forced to retire from his chairmanship for health reasons. He remains Games in December. Advance TAFE was directly involved in helping on the board. her raise funds so she could make the trip to represent her country. In August, Advance TAFE welcomed the appointment of its new chief executive officer, Shaun McDonagh. Mr McDonagh cameto MORE STUDENT SUCCESS Advance TAFE from Brisbane having held a range of senior executive roles in education and training institutes and private sector services Dual Diploma graduate, Kelly Treyvaud, reached the finals of the industries. Mr McDonagh holds multiple graduate qualifications 2013 Victorian Trainee of the Year. Kelly was one of only four in her including from the Kellogg School of Management at Northwestern category and proudly took her place on stage with the other finalists University and has substantial skills and experience in achieving at the Melbourne awards night. Kelly graduated with a dual Diploma business growth objectives and organisational change and is currently of Business and Diploma of Management, studied flexibly through leading Advance TAFE through a period of significant change. Advance TAFE in Sale, and achieved Distinctions in seven of her eight units. PARTNERSHIP WITH FEDERATION A former Advance TAFE hospitality student swept the East Gippsland Business Awards, taking out the major prize and another three for UNIVERSITY his café in the Bairnsdale business district. The Victorian Government’s formation of Federation University Matt Henderson, owner of Hendo’s Café, won the Most Outstanding Australia created new opportunities for Advance TAFE in the form Business, Hospitality Business, Child and Family Friendly Business of collaboration with an established university with hands-on and Customer Service Excellence awards. Matt was also the first experience of providing regional solutions for our students. This inductee into the Advance TAFE Hall of Fame, for high-achieving collaboration will continue to take shape in 2014. former students.

STUDENT MANAGEMENT SYSTEM AVIATION DONATION

The Victorian Government’s commitment to streamlining student Emphasising Advance TAFE’s close ties with industry, Hawker Pacific management and enrolment came to fruition in 2013. The four-year, Pty. Ltd. donated two power carts and four Hartzell propeller blades $80-million investment went live at Advance TAFE on 3 June 2013. to the aviation division. Hawker Pacific has a number of large aircraft maintenance facilities across Australia and overseas. It has had a base at East Sale since 2002, HELPING REBUILD COMMUNITIES providing maintenance support services for the KingAir B350 aircraft. Advance TAFE’s vocational students took to the paddocks of farms John Patten, Advance TAFE’s Aviation coordinator, said the donations devastated by bushfires during January. G-tec students were heavily would enable students to gain further practical experiences as well involved in BlazeAid, and helped local farmers rebuild after bushfires had as providing a valuable training aid for the classroom. destroyed homes, livestock, shedding, fences, and water infrastructure. Hawker Pacific also donated two Metcalf 28V aircraft power carts, which Mr Patten said would complement the growing number of MAINTAINING CLOSE COMMUNITY TIES working assets utilised by the Aviation team.

Advance TAFE’s e-learning and Business, Design and Service Industries teams in collaboration with local shires developed a ‘virtual visitor’ WINNING APPRENTICES project, to reduce the social isolation of residents living in aged-care facilities in East Gippsland, Wellington and Baw Baw Shires. Working The year began well for our apprentices, with Upper Maffra West’s with five aged care facilities, e-learning taught volunteers and staff Ryan Wheeler winning the Victorian Regional Apprentice of the Year to assist residents connect with friends and family members via a with the Master Builders Association of Victoria (MBAV). Skype video link. Advance TAFE staff produced a DVD of interviews MBAV careers manager Jarrod Flanigan said of Ryan: “Having grown with residents who were involved with the project. up in the industry, Ryan’s professionalism and enthusiasm make him a fantastic future builder.” COLLABORATIVE TRAINING Then, just a month later , Joel Hutchison, 20, from Swan Reach, won the Civil Contractors Federation Victorian Apprentice of the Year. FLOURISHES His employer, Whelan’s Earthmoving, said of Joel: “He had a Over 70 regional students commenced the Diploma of Community willingness to learn all machines, he does a good job overall and if he Health, an innovative course developed through a regional says he’s finished a job, we trust him.” partnership between Advance TAFE, GippsTAFE and Monash Advance TAFE is proud of the achievements of its young apprentices University. This Victorian Government Initiative, supported by the and would also like to recognise the talents of our dedicated teaching Regional Partnerships Facilitation Fund, and funded by the Regional staff, in particular Civil Construction trainer Trevor Ingram. Growth Fund addresses the demand for trained community health professionals. Interest for this course has remained strong with Advance TAFE receiving over 40 applications in 2013 for the next year's intake. 9

2013_ANNUAL REPORT_FINAL.indd 9 1/05/14 3:58 PM Our people

ADVANCE TAFE HAS A WORKFORCE DEDICATED TO PROVIDING SUPERIOR CUSTOMER SERVICE STAFF RECORDED AND EXCELLENCE IN TEACHING. A STRONG PEOPLE MATTER

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

PROFESSIONAL DEVELOPMENT AND INTEGRITY AND STUDY SUPPORT LEADERSHIP. Advance TAFE staff have the opportunity and access to a variety of professional development training and programs. Staff are also strongly supported to take up further study. In 2013 Advance TAFE supported the qualifications shown in the table below: Advance TAFE also received funding in 2013 from the VET Development Centre to build workforce capacity through making TITLE OF QUALIFICATION available professional development programs for teaching staff. Certificate IV in Training & Assessment -update to TAE40110 57 Certificate IV in Training & Assessment 9 TEACHING FELLOWSHIPS: Associate Degree in Training and Education 9 • Mark Shelton • Merralyn Barnes Graduate Certificate in Education 4 Graduate Certificate in Education (tertiary teaching) 2 SPECIALISTS SCHOLARSHIP: Diploma of Community Services 2 • Jacqueline Hocking Certificate IV in Career Development 2 Customer service training now forms part of the induction process Certificate IV in Commercial Cookery 2 for all new staff. In 2013, 27 staff completed this training. Certificate IV in Disability (2 units) 1 Certificate IV in Accounting 1 Certificate IV in Photoimaging 1 Certificate IV in Home And Community Care 1 Certificate III in Civil Plan Operations 1 Certificate III in Civil Road Construction & Maintenance 1 Diploma of Accounting 1 94

2013_ANNUAL REPORT_FINAL.indd 10 1/05/14 3:58 PM STAFF PROFILE DECEMBER 2013 - CURRENT YEAR DECEMBER 2012 - PRIOR YEAR Employee Employee - all Ongoing Fixed term & Casual - all Ongoing Fixed term & Casual FTE FTE FTE FTE FTE FTE Headcount Headcount Headcount Headcount Headcount Headcount

EMPLOYMENT STATUS Full time 119 119 91 91 28 28 127 127 88 88 39 39 Part time 119 65 47 29 72 36 159 87 50 34 109 53 Total 238 184 138 120 100 64 286 214 138 122 148 92

GENDER Male 90 76 55 51 35 25 111 87 62 57 49 30 Female 148 108 83 69 65 39 175 127 76 65 99 62 Total 238 184 138 120 100 64 286 214 138 122 148 92

AGE (HEADCOUNT ONLY) Under 25 3 0 3 11 1 10 25-34 24 14 10 33 13 20 35-44 59 29 30 62 29 33 45-54 77 50 27 91 47 44 55-64 69 42 27 84 46 38 Over 64 6 3 3 5 2 3 Total 238 138 100 286 138 148

DECEMBER 2013 - CURRENT YEAR DECEMBER 2012 - PRIOR YEAR Headcount FTE Headcount FTE

CLASSIFICATION Executives 4 4 4 4 Teaching - full & part 101 85 117 96 time Teaching - casual 23 8 21 8 PACCT - full & part 93 78 94 81 time PACCT - casual admin & student 9 3 36 13 support staff Other* - full part 8 6 14 12 time

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

2013_ANNUAL REPORT_FINAL.indd 11 1/05/14 3:58 PM Commercial Activities

BUSINESS DESIGN & SERVICE CATCHMENT, LAND & SEA INDUSTRIES (BDSI) MANAGEMENT (CLSM)

Advance TAFE’s BDSI team delivered business, finance and IT training In 2013 Advance TAFE continued their partnership with EPA to a wide range of commercial clients across Gippsland and beyond Victoria to help preserve Victoria’s natural water ecosystems and in 2013. Training in customer service, Microsoft Office application marine environments. Water quality testing in the Gippsland Lakes software (Word and Excel), professional service, stress management was conducted by Advance TAFE, which collects data on oxygen and project management was delivered to key clients including conditions, nutrient and toxicants levels, algae composition and Latrobe Health Services, East Gippsland Shire, Wellington Shire, water clarity. This data is crucial as not only does it provide water Patties Foods, Murray Goulburn and Bairnsdale Regional Health quality trends over time but also allows for timely alerts toEPA Services. Victoria of any changes or imbalance such as the recent example of excess that led to increased algal blooms, negatively impacting the Through an association with Training Aircraft Systems Program Office Gippsland Lakes ecosystem and its recreational use. (TASPO) we delivered the Diploma of Business, progressing to the Advanced Diploma of Business, to a large cohort of staff, stimulating Advance TAFE was commissioned by Gippsland Ports to undertake a such a desire for learning that many of these students intend to take turbidity monitoring program carried out during the Lakes Entrance advantage of our pathways to degree programs in 2014. dredging period of 11 November to 20 December 2013. Advance TAFE continued to service remote areas by providing training Other major commercial activity involved the training of the DEPI solutions to The Alpine School at Dinner Plain, Dargo Neighbourhood 2013 intake of project fire fighters. House and the community of Marlo in East Gippsland. Advance TAFE’s CLSM team explored a variety of initiatives for Hospitality training with a focus on ‘work ready skills’ such as further development in 2014 including: Responsible Service of Alcohol, Responsible Service of Gaming and • Delivery of Cert III Racing to South Australian racing industry cafe skills was rolled out to senior students from local secondary • Fire recovery and rehabilitation works in eastern Victoria (DEPI) schools in the Gippsland region. • Delivery of AMSA approved STCW95 Certificate of Sea Safety Training Our Training and Assessment teaching program went from strength to strength, with commercial flexible training conducted both onsite • Fisheries Research Development Corporation/Australian Fisheries Management Authority development and delivery of and on campus with the Department of Environment and Primary crew certification for commercial fishing operations Industries (DEPI), Country Fire Authority (CFA), State Emergency • Delivery of Cert II and III Seafood Processing to LEFCOL Service (SES), and OneHarvest. • Delivery of pest management and trapping skillset as part of The ‘Virtual Visiting program’ born from a partnership with East DEPI licensing requirements Gippsland, Wellington and Baw Baw Shire Councils saw staff and • Development of ‘Respond to wildlife emergencies’ skillset for volunteers at five aged care facilities throughout Gippsland given IT DEPI staff and volunteers involved with cetacean standings’ and training designed to assist residents in connecting with their families entanglements, fire affected wildlife and oiled seabirds. through various online platforms such as Skype and FaceTime. Our contractual training with FreeSpirit was strengthened with a COMMUNITY SERVICES EDUCATION focus on creating innovative blended and online learning resources for Caravan Parks and Resorts qualifications, to expand training & HEALTH (CSEH) opportunities throughout Australia, and with future plans to For CSEH it was a year of change with the concentration on our collaboratively enter China’s training market. profile courses. The team submitted a number of tenders in 2013. As cost was found to be a major determining factor on success, work was initiated to revise training models to deliver more productive and competitive community services education. On a positive note, there was further expansion across the state of the online staff induction program developed by Advance TAFE for the Department of Human Services (DHS).

2013_ANNUAL REPORT_FINAL.indd 12 1/05/14 3:58 PM TRADES & WORK SAFETY YOUTH, GENERAL EDUCATION &

Our Trades & Work Safety team engaged in a variety of commercial KOORI activities during 2013. Key partners included GippsAero, Apprenticeship Group Australia (AGA), TDT Training, Civil Contractors Advance TAFE was again contracted to deliver the Skills for Education Federation, ExxonMobil Australia, GippsTAFE and The Gordon. and Employment (SEE) program. Automotive restoration classes incorporating the use of English The SEE program provides language, literacy and numeracy training wheel machines were welcomed by car enthusiasts who had come to job seekers who are having difficulties securing employment. to learn the skills needed to shape pieces of metal into rounded Students are referred to Advance TAFE by Job Services Australia panels for their classic vehicles. Other short courses delivered (JSA) agencies such as Workways, Mission Australia, CRS Australia, included vehicle paint and protection along with metal polishing. Advanced Personnel Management and Work Solutions. Advance TAFE strengthened its partnership with GippsAero, a In 2013 Advance TAFE became the sole provider for the SEE program producer of general aviation aircraft designed specifically to meet for the East Gippsland region when other training organisations niche aviation markets, through the provision of training directed at discontinued this service. With the requirement of face-to-face organisational efficiency solutions. delivery, lack of public transport connections to outlying towns and This year also saw the development of an online learning option for regions prohibits access to this important education service for many the Certificate II in Bicycles Mechanical Technology in collaboration potential students. with Bicycle Industry Australia (BIA). The recent shift in government policy and reduction to Vocational Our engineering team developed a training program for experienced Education and Training (VET) funding arrangements for secondary welders wishing to obtain the theory and practical skills to meet the schools has created pressure on these programs being run in-house. assessment requirements specified in Australian Standard 1796- As a result Advance TAFE’s Vocational Education and Training in 2001. Course participants, upon successful completion (and also Schools (VETiS) operation has experienced growth. dependant on the 1-9 welding certificate undertaken), were then Around 600 students from 18 secondary schools across East certified to weld high quality applications on plain carbon and/or low Gippsland and Wellington shires attended VET programs at Advance alloy steel plate and pipe sections. TAFE in 2013. Major career areas that training was delivered in Our Building & Construction team devised a series of Work, Health & included: Safety (WH&S) training programs targeted as an introduction to the • Building & Construction construction industry as well as delivering WH&S for managers and • Automotive supervisors already working in the industry. • Engineering • Agriculture / Horticulture In 2013 Advance TAFE’s Work Safety Centre commercial training • Small Business programs focused on delivery in three key areas: • Media & Information Technology • Work Health & Safety • Hair & Beauty • High Risk Work • Hospitality (Kitchen Operations) • Civil Operations • Children’s Services Advance TAFE continued to provide vocational education and training services to prisoners at the Marngoneet Correctional Centre in 2013 with the focus on improving the employment THERE WAS opportunities of prisoners upon their release. A series of work was undertaken to structure training programs to ensure prisoners are able to continue their course as they moved STATE WIDE through the prison system. Both parties agreed to an extension of the existing contract which EXPANSION will now run until the end of 2014. OF THE E-LEARNING The Advance TAFE e-Learning team further developed the induction program for staff at Gippsland Ports. Originally the safety induction ONLINE STAFF training was produced on CD but in 2013 it was updated to an online application that is hosted commercially on Advance TAFE’s Moodle INDUCTION platform. PROGRAM FOR DHS.

2013_ANNUAL REPORT_FINAL.indd 13 1/05/14 3:58 PM Compliance

ADDITIONAL INFORMATION BUILDING WORKS NO. AVAILABLE ON REQUEST Buildings certified for approval 1 Works in construction and the subject of 0 Consistent with the requirements of the Financial Management Act mandatory inspections 1994, Advance TAFE has prepared material on the following items, Occupancy permits issued 2 details of which are available on request: • statement regarding declarations of pecuniary interest • shares held beneficially by senior officers as nominees of a MAINTENANCE NO. statutory authority or subsidiary Notices issued for rectification of sub-standard buildings 0 • publications and where they are located requiring urgent attention • changes in prices, fees, charges, rates and levies Involving major expenditure and urgent attention 1 • major external reviews • major research and development activities • overseas visits undertaken • major promotional, public relations and marketing activities WORKPLACE HEALTH AND SAFETY • assessments and measures undertaken to improve the workplace health and safety of employees Advance TAFE recognises its legal and moral obligations, in particular • industrial relations issues under the OH&S Act and associated regulations, to provide a safe • major committees sponsored by Advance TAFE. and healthy work environment for staff, students, clients, visitors and contractors. The Institute has developed a WH&S Policy and Enquiries regarding details of the above should be addressed to: Management System to support that policy. The Institute’s WH&S policy is reviewed annually and aims to: Nick Fordham, Executive Manager Corporate Services • safeguard all persons from occupational injury or illness Advance TAFE, PO Box 886, Bairnsdale Vic. 3875 • provide resources and funding sufficient to maintain an effective Advance TAFE complies with all relevant legislation and subordinate health and safety program instruments, including, but not limited to, the following: • comply with all relevant, statutory WH&S requirements. • Education and Training Reform Act 2006 (ETRA) Advance TAFE’s commitment is outlined in the WH&S policy • TAFE institute constitution statement that is on display at each Institute campus and available • Directions of the Minister for Higher Education and Skills (or on the Intranet and Internet. predecessors) • TAFE institute Commercial Guidelines Details of management, employee and contractor responsibilities • TAFE institute Strategic Planning Guidelines are contained in the WH&S Management System, with detailed • Public Administration Act 2004 requirements defined in the various WH&S procedures that • Freedom of Information Act 1982 deal with specific WH&S risks. Wherever practicable, safety, • Building Act 1983 quality, environmental and people requirements are built into the management policies and procedures in support of the Institute’s • Protected Disclosure Act 2012 vision of “Sustainability in everything that we do”. Management • Victorian Industry Participation Policy Act 2003 and employee performance in relation to these responsibilities is Commentary against relevant Acts is provided below, as appropriate. assessed through annual staff performance development reviews. The Institute has a WH&S Management System to minimise the BUILDING ACT 1993 likelihood of an injury occurring, and a Return to Work Program administered through the Human Resources Department to ensure Advance TAFE ensures that all works requiring building approval have an effective recovery from any work related injuries that do arise. plans certified, works in progress inspected and occupancy permits The effectiveness of the Institute’s WH&S management is reflected issued by independent building surveyors engaged on a job by job in our claims history. In 2013, the Institute recorded: basis. It also ensures that plans for these works are lodged with the relevant local council. WH&S CLAIMS A register of building surveyors and the jobs that they certified is Medical treatment injuries 2 maintained. The Institute requires all building practitioners engaged Lost time injuries 2 on its works to show evidence of current registration upon their engagement. A condition of their contracts with the Institute is that Total work cover claims 2 they maintain their registered status for the course of their contract. Total days lost through injury 170 All practitioners engaged by the Institute maintained their registered status throughout the year. During the year, as indicated in the WH&S INJURY STATISTICS accompanying table, works and maintenance were undertaken to Staff Injury reports 8 maximise conformity to relevant standards. Student Injury reports 9 Contractor & Visitor Injury reports 9 Total Injury reports 26

2013_ANNUAL REPORT_FINAL.indd 14 1/05/14 3:58 PM Identified injuries, incidents and near misses are reported atthe INDUSTRIAL RELATIONS monthly meetings of the WH&S Committee and are subject to review, with appropriate corrective action taken. All incidents are The PACCT (Professional, Administrative, Computing, Clerical and investigated and solutions developed at the local level to prevent Technical) agreement was approved by Fair Work Australia on 1 May recurrence. All serious or potentially serious injuries or incidents 2013 and commenced operation on 8 May 2013. are investigated immediately by the Manager Health Safety & Risk and the Health and Safety Representative of the area concerned. The Victorian TAFE Teaching Staff Multi-Business Agreement (MBA) No serious incident occurred during 2013. 2009 will continue to apply to our business operations until a new agreement is approved by Fair Work Australia. FREEDOM OF INFORMATION FEES AND CHARGES The Institute is subject to the provisions of the Freedom of Information Act 1982. The Act gives right of access to information Advance TAFE did not collect any compulsory non-academic fees, held in documentary form by the Institute. subscriptions and charges from students and prospective students during the 2013 financial year It is Institute policy to facilitate all reasonable requests from students, staff and the general public, subject to privacy and confidentiality provisions, without recourse to the provisions of the Act. CONSULTANTS AND OTHER The authorised FOI Officer for the Institute is the Executive Manager, PAYMENTS Corporate Services. Formal requests for access to documents or records under FOI are required to be directed in writing to: Total number of Consultancies individually valued in excess of The Chief Executive Officer, Attention FOI Officer $10,000 = 4 Advance TAFE, PO Box 886, Bairnsdale Vic. 3875 Schedule listing consultants engaged Total project fees approved No requests were received in 2013 for access to Institute documents Technology One 15,151.00 under the Freedom of Information Act 1982. Ernst Young 15,810.00 PROTECTED DISCLOSURE ACT 2012 Peter Quilligan Family Trust 46,718.50 Price Waterhouse Cooper 80,847 In 2013 Advance TAFE’s policy and procedures were updated from 158,526 the Whistleblowers Protection Act 2001 to reflect the new legislation contained in the Protected Disclosure Act 2012. Total number of Consultancies individually valued at less than The Protected Disclosure Policy establishes a system for the $10,000 = 18 protection of persons who make a protected disclosure under Total Expenditure of these consultancy arrangements = $84,373 the Protected Disclosure Act 2012 (Vic) from detrimental action by officers, members, employees and contractors of Advance TAFE, in accordance with section 58 (5) and ensures that all other EX GRATIA PAYMENTS requirements are met. This policy is available online via the staff intranet or hard copies There were no ex-gratia payments in 2013. can be viewed in the libraries at the Bairnsdale and Fulham campus. NATIONAL COMPETITION POLICY

ENVIRONMENTAL PERFORMANCE The institute complies with Victorian Government competitive In 2013 Advance TAFE the invested in equipment and upgraded 2 pricing policies. campuses - The Flexible learning centre in Sale and the Bairnsdale Trade Centre to become new Technology Enabled Learning Centres (TELCs). This extended access to video conference facilities has led to a reduction in staff and student travel for meetings and classes, further enhancing our commitment to environmental practices. The TELCs have also increased the level of collaboration with our educational partners GippsTAFE and Chisholm. Other environmental developments include the introduction of Microsoft Office 365 to better enable students to work from home whilst still having access to Office productivity tools and Microsoft Lync for video conference/online collaboration. Advance TAFE initiated a review in 2013 into the way that wifi access is offered across its campuses with the pilot to commence in 2014 of a new network to better support student and staff personal devices. Fleet management updates have been undertaken with the sourcing of environmentally friendly ‘green vehicles wherever possible.

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RISK MANAGEMENT

Advance TAFE recognises its accountability and responsibility to all stakeholders and that good governance principles underpin its success. A risk management program consistent with AS/NZS ISO 31000:2009, Risk Management - Principles and Guidelines is in place to take advantage of opportunities and manage the risks facing the Institute. Attestation on compliance with the Australian/New Zealand Risk Management Standard I, Brenton Barker, certify that Advance TAFE has risk management processes in place consistent with the Australian/New Zealand Risk Management Standard (or equivalent designated standard) and an internal control system is in place that enables the executive to understand, manage and satisfactorily control risk exposures. The audit committee verifies this assurance and that the risk profile of Advance TAFE has been critically reviewed within the last 12 months.

Brenton Barker Chief Financial and Accounting Officer Advance TAFE 28 April 2014

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ADVANCE TAFE

STATEMENT OF PERFORMANCE FOR YEAR ENDED 31 DECEMBER 2013

In our opinion, the accompanying Statement of Performance of Advance TAFE, in respect of the 2013 financial year, is presented fairly in accordance with the Financial Management Act 1994.

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

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

Scott Rossetti Shaun McDonagh Chair of the Board Chief Executive Officer Date: 28 April 2014 Date: 28 April 2014 Place: Bairnsdale Place: Bairnsdale

Brenton Barker Chief Finance officer Date: 28 April 2014 Place: Bairnsdale

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Key Performance Indicators For year ended 31 December 2013

2013 TARGET 2013 ACTUAL COMMENT STRATEGIC ALIGNMENT (STUDENT POPULATION SIZE)

Participation of Target not pre A target is not specified for cohort in the performance agreement with 1,783 15-24 year olds - determined HESG. No target has been set.

Participation of Target not pre A target is not specified for cohort in the performance agreement with 1,767 25-64 year olds - determined HESG. No target has been set. TRAINING OUTCOMES

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

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

The total cost per student contact hour has decreased by approximately Total cost per SCH (excl. $12.49 $13.74 2.48% from 2012 ($14.09) due to a reduction in the total number of student depreciation) contact hours delivered affecting economies of scale.

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

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

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

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

SCH has dropped given change in demand following subsidisation rate Government funded 1,043,460 943,707 changes, subsequent fee increases and significant senior staff change in student contact hours (SCH) 2013. ENVIRONMENT

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

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2009 2010 2011 2012 2013 SUMMARY OF OPERATING STATEMENTS FOR THE YEAR ENDED 31 DECEMBER $000 $000 $000 $000 $000 Revenue from continuing operations (including capital income) 29,157 28,616 30,531 26,032 17,783 Expenses including finance costs and other economic flows 19,240 26,279 27,324 26,906 26,841 Net result from continuing operations 9,917 2,337 3,207 (874) (9,058) Net result for the period 9,917 2,337 3,207 (874) (9,058) Net increase in asset revaluation reserve - - - - 0 Net income recognised directly in equity 311 59 20 (2,822) 0 Comprehensive result 10,228 2,396 3,227 (3,696) (9,058)

2009 2010 2011 2012 2013 SUMMARY OF BALANCE SHEETS AS AT 31 DECEMBER $000 $000 $000 $000 $000 Total assets 59,915 61,113 66,504 62,065 54,484 Total liabilities 5,328 4,130 6,294 5,551 3,294 Net assets 54,587 56,983 60,210 56,514 51,190 Total equity 54,587 56,983 60,210 56,514 51,190

SUMMARY OF CASH FLOWS STATEMENTS FOR THE YEAR ENDED 2009 2010 2011 2012 2013 31 DECEMBER $000 $000 $000 $000 $000 Cash flows from operating activities Total receipts 27,661 28,292 30,619 25,865 18,571 Total payments (23,374) (25,805) (24,954) (25,213) (24,693) Net cash provided by operating activities 4,287 2,487 5,665 652 (6,122) Net cash used in investing activities (2,721) (2,952) (6,470) (2,916) 6,087 Net cash used in financing activities (69) - - - - 1,497 (465) (805) (2,264) (35) Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the financial year 4,035 5,532 5,067 4,262 1,998 Cash and cash equivalents at the end of the financial year 5,532 5,067 4,262 1,998 1,963

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CERTIFICATIONS...... 21 AUDITOR’S REPORT...... 22 COMPREHENSIVE OPERATING STATEMENT ...... 23 BALANCE SHEET...... 24 STATEMENT OF CHANGES IN EQUITY...... 25 CASH FLOW STATEMENT...... 26 NOTES TO THE FINANCIAL STATEMENT...... 27 - 66

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

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Declaration

FINANCIAL REPORT FOR YEAR ENDED 31 DECEMBER, 2013

DECLARATION BY CHAIR OF THE BOARD CHIEF EXECUTIVE OFFICER AND CHIEF FINANCE AND ACCOUNTING OFFICER

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

We further state that, in our opinion, the information set out in the statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement and notes to and forming part of the financial report, presents fairly the financial transactions during the year ended 31 December 2013 and financial position of the Institute as at 31 December 2013.

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

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

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

Date: 28 April 2014 Date: 28 April 2014

Place: Bairnsdale Place: Bairnsdale

Brenton Barker, Chief Finance & Accounting Officer

Date: 28 April 2014

Place: Bairnsdale

Page 1 of 1

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Advance TAFE Financial Statements COMPREHENSIVE OPERATING STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013

2013 2012 Note $’000 $’000 Continuing operations Income from transactions Government contributions - operating 2(a)(i) 9,118 14,000 Government contributions - capital 2(a)(ii) 600 3,538 Sale of goods and services 2(b) 7,741 7,702 Interest 2(c) 133 269 Other income 2(e) 191 523 Total income from transactions 17,783 26,032

Expenses from transactions Employee expenses 3(a) 16,654 18,183 Depreciation and amortisation 3(b) 2,217 2,384 Grants and other transfers 3(c) 18 23 Supplies and services 3(d) 3,727 3,501 Other operating expenses 3(e) 2,173 2,788 Goodwill and capitalised costs written off 3(f) 2,114 - Total expenses from transactions 26,902 26,879 Net result from transactions (net operating balance) (9,119) (847)

Other economic flows included in net result Net gain/(loss) on non-financial assets 4(a) 78 (2) Other gains/(losses) from other economic flows 4(b) (17) (25) Total other economic flows included in net result 61 (27) Net result from continuing operations (9,058) (874)

Net result (9,058) (874)

Other economic flows - other comprehensive income Changes in physical asset revaluation surplus 15 - (2,820) Valuation (decrement) taken to equity 15 - (2) Total other economic flows – Other comprehensive income - (2,822) Comprehensive result (9,058) (3,696)

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

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Advance TAFE Financial Statements BALANCE SHEET AS AT 31 DECEMBER 2013

2013 2012 Note $’000 $’000 Assets Financial assets Cash and deposits 5 1,963 1,998 Receivables 6 896 1,965 Investments, loans and other financial assets 7 - 6,438 Total financial assets 2,859 10,401

Non-financial assets Inventories 8 148 164 Property, plant and equipment 9 47,107 50,916 Biological assets 10 13 19 Intangible assets 11 4,214 565 Other non-financial assets 12 143 - Total non-financial assets 51,625 51,664 Total assets 54,484 62,065

Liabilities Payables 13 1,197 3,309 Provisions 14 2,097 2,242 Total liabilities 3,294 5,551

Net assets 51,190 56,514

Equity Accumulated surplus 15(b) 22,816 31,874 Physical asset revaluation surplus 15(c) 9,082 9,082 Contributed capital 15(a) 19,292 15,556 Net worth 51,190 56,512

Commitments for expenditure 17 1,518 1,294

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

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Advance TAFE Financial Statements STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013

Changes due to

Transactions with Equity at Total Equity at Comprehensive owners in their 1 Jan 2013 capacity as 31 Dec 2013 result owners

Note $’000 $’000 $’000 $’000 Accumulated surplus 15(b) 31,874 (9,058) 22,816 Accumulated surplus at the end of the year 31,874 (9,058) - 22,816

Contributed capital 15(a) 15,556 3,736 - 19,292 Withdrawal of equity - - - Contribution by owners at the end of the year 15,556 3,736 - 19,292

Physical assets revaluation reserve 15(c) 8,694 - 8,694 Financial assets available-for-sale reserve 15(c) 388 - 388 9,082 - - 9,082 Total equity at the end of the year 56,512 (5,322) - 51,190

Changes due to

Transactions with Equity at Total Equity at Comprehensive owners in their 1 Jan 2012 capacity as 31 Dec 2012 result owners

Note $’000 $’000 $’000 $’000 Accumulated surplus 15(b) 33,568 (874) - 32,694 Adjustment due to prior year error (820) - - (820) Accumulated surplus at the end of the year 32,748 (874) - 31,874

Contributed capital 15(a) 15,556 - - 15,556 Withdrawal of equity - - - - Contribution by owners at the end of the year 15,556 - - 15,556

Physical assets revaluation reserve 15(c) 11,514 (2,820) - 8,694 Financial assets available-for-sale reserve 15(c) 390 (2) - 388 Adjustments due to change in accounting policy 15(c) - - - - 11,904 (2,822) - 9,082 Total equity at the end of the year 60,208 (3,696) - 56,512

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

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Advance TAFE Financial Statements CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013

2013 2012 Note $’000 $’000 Cash flows from operating activities Receipts Government contributions - operating 2(a)(i) 9,228 14,000 Government contributions - capital 490 1,921 User fees and charges received 7,741 7,702 Goods and services tax recovered from the ATO 792 1,260 Interest received 133 269 Other receipts 187 713 Total receipts 18,571 25,865

Payments Payments to suppliers and employees (23,162) (24,084) Goods and services tax paid to the ATO (1,043) (1,129) Other payments (488) - Total payments (24,693) (25,213) Net cash flows from/(used in) operating activities 16 (a) (6,122) 652

Cash flows from investing activities

Payments for investments - (1,000) Proceeds from sale of investments 6,438 - Payments for non-financial assets (494) (1,995) Proceeds from sale of biological assets 6 11 Proceeds from sale of non-financial assets 137 68 Net cash provided by/(used in) investing activities 6,087 (2,916)

Net increase/(decrease) in cash and cash equivalents (35) (2,264) Cash and cash equivalents at the beginning of the financial year 1,998 4,262 Effects of exchange rate changes on cash and cash equivalents held in foreign currencies - - Cash and cash equivalents at the end of the financial year 5 1,963 1,998

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

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

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Advance TAFE Financial Statements CONTENTS OF THE NOTES TO THE FINANCIAL STATEMENTS

NOTE NO. ACCOMPANYING NOTE

1...... Statement of significant accounting policies 2...... Income from transactions 3...... Expenses from transactions 4...... Other economic flows included in net result 5...... Cash and cash equivalents 6...... Receivables 7...... Investments, loans and other financial assets 8...... Inventories 9...... Property, plant and equipment 10...... Biological assets 11...... Intangible assets 12...... Other non-financial assets 13...... Payables 14...... Provisions 15...... Equity 16...... Cash flow information 17...... Commitments 18...... Leased assets 19...... Contingencies 20...... Economic dependency 21...... Subsequent events 22...... Remuneration of auditors 23...... Superannuation (Part I) 24...... Key management personnel disclosures (Part I) 25...... Related parties 26...... Institute details 27...... Financial instruments (Part I) 27...... Financial instruments (Part II) 27...... Financial instruments (Part III) 27...... Financial instruments (Part IV)

2013_ANNUAL REPORT_FINAL.indd 27 1/05/14 3:58 PM NOTESNotes to the TOFinancial THE Statements FINANCIAL - Advance TAFE STATEMENT FORNotes THE to theYEAR Financial ENDED Statements 31 DECEMBER - Advance 2013 TAFE for the year endedended 3131 DecemberDecember 20132013

NOTE 1

Statement of significant accountingaccounting policiespolicies

The annual financialRevaluations statements of non-current represent physical the assets audited general purpose financial statements and notes of Advance TAFE as an independent entity. 1.01 StatementNon-current of physical compliance assets measured at fair value are revalued in accordance with FRDs issued by the Minister for Finance. This revaluation process normally occurs every five years, based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material Thesechanges general in values. purpose Revaluation financial increases statements or havedecreases been ariseprepared from in differences accordance between with the an Financial asset’s Managementcarrying value Act and 1994 fair (FMA)value. and applicable Australian Accounting Standards (AAS) which include Interpretations, issued by the Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements of the AASB 1049 Whole of Government and General Government Sector Financial Reporting. Revaluation increases are credited directly to equity in the revaluation reserve, except to the extent that an increase reverses a revaluation decrease in respect of that class of property, plant and equipment, previously recognised as an expense (other economic flows) in the net result, the increase is recognised as income For(other the economic purposes flows)of preparing in determining financial statements,the net result. the Institute is classed as a not for profit entity. Where appropriate, those AAS paragraphs applicable to not- for-profit entities have been applied. Revaluation decreases are recognised immediately as expenses (other economic flows) in the net result, except to the extent that a credit balance exists in the Accountingrevaluation policiesreserve are in respect selected of and the applied same class in a ofmanner property, which plant ensures and equipment, that the resulting they are financial debited information to the revaluation satisfies thereserve. concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported. 1.02 BasisRevaluation of accounting increases preparationand revaluation and decreases measurement relating to individual assets within a class of property, plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes. GoingRevaluation concern reserves are not normally transferred to accumulated funds on de-recognition of the relevant asset. After consideration of conditions, which may cast doubt on the TAFES ability to continue as a going concern, the going concern basis has been used to prepare the Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the financial statements. During the 2013 year, Advance TAFE incurred a loss from continuing operations of $9.2m and this contributed to a $6.1m net cash outflow revalued amount of the asset. from operations during 2013. This outflow was funded by investments. TheNon-current primary physical driver behindassets constructed the $6.1m by year-on-year the Institute decline in cash flows from operations was a $4.8m decline in Government contributions for the Institute’s operationsThe cost of asnon-current outlined in assets the Comprehensive constructed by operation the Institute Statement. includes Prior the costyear ofrevenue all materials had also used included in construction, capital receipts direct totalling labour on $3.5m. the project, and an appropriate proportion of variable and fixed overheads. DuringBiological the assetslatter part of 2013, the Institute reviewed its operations and there were significant staff changes at an Executive level. It investigated opportunities to transitionBloodstock the business. Some of these initiatives were implemented in 2013 with full year impacts to be realised in 2014. 2013 initiatives commenced include; •Bloodstock A course by is coursemeasured budget at fair review; value less estimated point of sale costs. • Budgeted FTE for 2014 were down 20 from 2013 - expected to save an annualised $1.5m; Intangibles • In late 2013 a comprehensive review of several potential partnership options was undertaken seeking to create a sustainable future for Gippsland’s education Internally-generated intangible assets and training options. The Board resolved to pursue a formal partnership with Advance TAFE, GippsTAFE and Federation University Australia; An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the • In 2013 all student fees for 2014 were reviewed to offset the impact of known reductions in government funding. Overall, most student fees have been following are demonstrated: increased in 2014 dependent upon market forces and is expected to contribute additional revenue. (a) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (b) the intention to complete the intangible asset and use or sell it; (c) the ability to use or sell the asset; Subsequent(d) how the tointangible balance assetdate Advancewill generate TAFE probablehave signed future a memorandum economic benefits; of understanding whereby Advance TAFE will be amalgamated with Gipps TAFE to form a combined(e) the availability operation of commencingadequate technical, on the 1st financial May 2014. and otherThe new resources entity will to complete trade under the the development name Federation and to Traininguse or sell with the a intangibleview to then asset; being and amalgamated into the operation of Federation University of Australia pending acceptable financial and operating performance over a twenty month period. In doing so the amalgamated operations receive support funding of $40.2m over time through the state government's structural adjustment fund as announced by the Minister (f) the ability to measure reliably the expenditure attributable to the intangible asset during its development. on the 16th April 2014 to support the amalgamation activities. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred. These financial statements are presented in Australian dollars, the functional and presentation currency of the Institute. InIntangible the application assets areof AAS, measured judgements, at cost estimates less accumulated and assumptions amortisation are required and impairment, to be made and about are amortised the carrying on valuesa straight-line of assets basis and liabilitiesover their that useful are lives not readilyas follows: apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results2013 may differ from2012 these estimates. TheCapitalised estimates software and associated development assumptions cost (years) are reviewed on an ongoing basis. Revisions to10 accounting estimates 3-5 are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. Judgements made by management in the application of AASs that have significant effects on theGoodwill financial statements and estimates, with a risk of material adjustments in the next year, are disclosed throughout the notes to the financial statements. Goodwill and goodwill on acquisition is initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled Otherentity mattersexceeds the fair valued attributed to its net assets at date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on Theseacquisition financial of associates statements is haveincluded been in prepared investments in accordance in associates. with Goodwill the historical is tested cost at convention. least annually Historical for impairment cost is based and on carried the fair at valuescost less of accumulatedthe consideration givenimpairment in exchange losses. for Gains assets and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

ExceptionsLicence to the historical cost convention include: •Licence non-financial cost associated physical assetswith the which, Optical subsequent Fibre Wide to Areaacquisition, Network are (WAN) measured are initiallyat a revalued recorded amount at cost being and their amortised fair value on aat straight the date line of basisthe revaluation over the period less any of the subsequentrelevant contract accumulated which is depreciation 20 years. Licence and subsequent intangibles impairment are subsequently losses. carried Revaluations at cost are less made accumulated with sufficient amortisation regularity and to impairment ensure that losses.the carrying amounts do not materially differ from their fair value; • the fair value of an asset other than land is generally based on its depreciated replacement value; 1.13 •Liabilities available-for-sale investments which are measured at fair value with movements reflected in equity until the asset is derecognised. ThePayables accounting policies set out below have been applied in preparing the financial statements for the year ended 31 December 2013 and the comparative informationPayables consist presented of: for the year ended 31 December 2012. The• contractual following ispayables, a summary such of as the accounts material payable, accounting and policies unearned adopted income by including the Institute deferred in the income preparation from ofconcession the financial arrangements. report. The Accountsaccounting payable policies represent have beenliabilities consistently for goods applied and services unless providedotherwise to stated. the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to make future payments in respect of the purchase of those goods and services; and 1.03 Reporting• statutory payables,entity such as goods and services tax and fringe benefits tax payables. TheContractual financial payables statements are cover classified the Advance as financial TAFE instruments as an individual and categorised reporting entity. as financial The Institute liabilities is aat statutory amortised body cost. corporate, Statutory established payables are pursuant recognised to an and act/order made by the Victorian Government under the Education and Training Reform Act 2006. measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, Itsbecause principal they address do not is: arise from a contract. Advance TAFE Provisions 48 Main Street, Bairnsdale, Vic 3875. Provisions are recognised when the Institute has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. 1.04 Basis of consolidation The financialamount recognisedstatements asinclude a provision all the is activities the best of estimate the Institute. of the consideration required to settle the present obligation at reporting date, taking into account the Therisks Institute and uncertainties has no controlled surrounding entities. the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. 1.05 Events after reporting date Employee benefits The calculation of employee benefits includes all relevant on-costs and arePage calculated 9 of 53 as follows at reporting date. 28 Page 14 of 53

2013_ANNUAL REPORT_FINAL.indd 28 1/05/14 3:58 PM Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 1

Statement of significant accounting policies

The annual financial statements represent the audited general purpose financial statements and notes of Advance TAFE as an independent entity. 1.01 Statement of compliance These general purpose financial statements have been prepared in accordance with the Financial Management Act 1994 (FMA) and applicable Australian Accounting Standards (AAS) which include Interpretations, issued by the Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements of the AASB 1049 Whole of Government and General Government Sector Financial Reporting.

For the purposes of preparing financial statements, the Institute is classed as a not for profit entity. Where appropriate, those AAS paragraphs applicable to not- for-profit entities have been applied. Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported. 1.02 Basis of accounting preparation and measurement

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

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

Subsequent to balance date Advance TAFE have signed a memorandum of understanding whereby Advance TAFE will be amalgamated with Gipps TAFE to form a combined operation commencing on the 1st May 2014. The new entity will trade under the name Federation Training with a view to then being amalgamated into the operation of Federation University of Australia pending acceptable financial and operating performance over a twenty month period. In doing so the amalgamated operations receive support funding of $40.2m over time through the state government's structural adjustment fund as announced by the Minister on the 16th April 2014 to support the amalgamation activities. These financial statements are presented in Australian dollars, the functional and presentation currency of the Institute. In the application of AAS, judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. Judgements made by management in the application of AASs that have significant effects on the financial statements and estimates, with a risk of material adjustments in the next year, are disclosed throughout the notes to the financial statements.

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

Exceptions to the historical cost convention include: • non-financial physical assets which, subsequent to acquisition, are measured at a revalued amount being their fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are made with sufficient regularity to ensure that the carrying amounts do not materially differ from their fair value; • the fair value of an asset other than land is generally based on its depreciated replacement value; • available-for-sale investments which are measured at fair value with movements reflected in equity until the asset is derecognised. The accounting policies set out below have been applied in preparing the financial statements for the year ended 31 December 2013 and the comparative information presented for the year ended 31 December 2012. The following is a summary of the material accounting policies adopted by the Institute in the preparation of the financial report. The accounting policies have been consistently applied unless otherwise stated. Notes to the Financial Statements - Advance TAFE NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013 1.03for the yearReporting ended 31 Decemberentity 2013 The financial statements cover the Advance TAFE as an individual reporting entity. The Institute is a statutory body corporate, established pursuant to an act/order made by the Victorian Government under the Education and Training Reform Act 2006. NOTE 1 Its principal address is: Notes toAdvance the Financial TAFE Statements - Advance TAFE forStatement the year48 endedof Main significant 31Street, December Bairnsdale, accounting 2013 Vic policies 3875.

1.04NOTE 1 BasisRevaluations of consolidation of non-current physical assets TheNon-current financial statements physical assets include measured all the activitiesat fair value of the are Institute. revalued in accordance with FRDs issued by the Minister for Finance. This revaluation process normally The Institute has no controlled entities. Statementoccurs of significant every five accounting years, based policies upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material 1.05 Eventschanges after in values. reporting Revaluation date increases or decreases arise from differences between an asset’s carrying value and fair value. Assets, liabilities, income or expenses arise from past transactions or other past events. Where the transactions result from an agreement between the Institute Revaluation increases are credited directly to equity in the revaluation reserve, except to the extent that an increase reverses a revaluation decrease in respect of and other parties, the transactions are only recognised when the agreementPage is 9irrevocable of 53 at or before balance date. Adjustments are made to amounts that class of property, plant and equipment, previously recognised as an expense (other economic flows) in the net result, the increase is recognised as income recognised in the financial statements for events which occur after the reporting date and before the date the statements are authorised for issue, where those (other economic flows) in determining the net result. events provide information about conditions which existed at the reporting date. Note disclosure is made about events between the reporting date and the date theRevaluation statements decreases are authorised are recognised for issue immediately where the events as expenses relate (otherto conditions economic which flows) arose in theafter net the result, reporting except date to theand extent which thatmay ahave credit a material balance impactexists in on the the resultsrevaluation of subsequent reserve in years. respect of the same class of property, plant and equipment, they are debited to the revaluation reserve.

1.06 GoodsRevaluation and increasesServices andTax revaluation(GST) decreases relating to individual assets within a class of property, plant and equipment are offset against one another within Income,that class expenses but are notand offset assets in are respect recognised of assets net in of different the amount classes. of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this caseRevaluation it is recognised reserves as are part not of normally the cost transferredof acquisition to ofaccumulated the asset or funds as part on of de-recognition the expense. of the relevant asset. ReceivablesAny accumulated and payables depreciation are stated at the inclusive date of revaluationof the amount is eliminated of GST receivable against theor payable. gross carrying The net amount amount of of the GST asset recoverable and the net from, amount or payable is restated to, the to taxation the authorityrevalued amountis included of thewith asset. other receivables or payables in the balance sheet. CashNon-current flows are physical included assets in constructed the cash flow by the statement Institute on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverableThe cost of non-current from, or payable assets to, constructed the taxation by authority the Institute is classified includes as the operating cost of all cash materials flows. used in construction, direct labour on the project, and an appropriate Commitmentsproportion of variableand contingent and fixed assets overheads. or liabilities are presented on a gross basis. Biological assets 1.07 IncomeBloodstock from transactions AmountsBloodstock disclosed is measured as income at fair are, value where less estimatedapplicable, point net of of returns, sale costs. allowances and duties and taxes. Revenue is recognised for each of the Institute’s major activities as follows: Intangibles GovernmentInternally-generated contributions intangible assets GovernmentAn internally-generated contributions intangible are recognised asset arising as revenue from developmentin the period (orwhen from the the Institute development gains control phase of of the an internalcontributions. project) Control is recognised is recognised if, and upon only if,receipt all of orthe notificationfollowing are by demonstrated: relevant authorities of the right to receive a contribution for the current period. Sale(a) the of goodstechnical and feasibility services of completing the intangible asset so that it will be available for use or sale; (i)(b) Student the intention fees and to charges complete the intangible asset and use or sell it; Student(c) the ability fees and to use charges or sell revenue the asset; is recognised by reference to the percentage of services provided. Where student fees and charges revenue has been clearly received(d) how thein respect intangible of courses asset will or generateprograms probable to be delivered future economicin the following benefits; year, any non-refundable portion of the fees is treated as revenue in the year of receipt(e) the availabilityand the balance of adequate as Revenue technical, in Advance. financial and other resources to complete the development and to use or sell the intangible asset; and (ii) Fee for Service Fee(f) the for ability service to revenue measure is reliablyrecognised the expenditureby reference attributableto the percentage to the completionintangible asset of each during contract, its development. i.e. in the reporting period in which the services are rendered. Where feeno internally-generatedfor service revenue of intangible a reciprocal asset nature can be has recognised, been clearly development received in respectexpenditure of programs is recognised or services as an toexpense be delivered in the periodin the followingas incurred. year, such amounts are disclosed as Revenue in Advance. Intangible assets are measured at cost less accumulated amortisation and impairment, and are amortised on a straight-line basis over their useful lives as follows: (iii) Revenue from sale of goods Revenue from sale of goods is recognised by the Institute when: (a) the significant risks and rewards of ownership of the goods have transferred to the2013 buyer; 2012 (b)Capitalised the Institute software retains development neither continuing cost (years) managerial involvement to the degree usually10 associated with 3-5 ownership nor effective control over the goods sold; (c) the amount of revenue can be reliably measured; (d)Goodwill it is probable that the economic benefits associated with the transaction will flow to the Institute and; (e)Goodwill the costs and incurred goodwill or on to acquisition be incurred is in initially respect recorded of the transaction at the amount can beby measuredwhich the purchasereliably. price for a business or for an ownership interest in a controlled entity exceeds the fair valued attributed to its net assets at date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on Interest acquisition of associates is included in investments in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated Interest from cash, short-term deposits and investments is brought to account on a time proportional basis taking into account interest rates applicable to the impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. financial assets. Net realised and unrealised gains and losses on the revaluation of investments do not form part of income from transactions, but are reported as part of income Licence from other economic flows in the net result or as unrealised gains and losses taken direct to equity, forming part of the total change in net worth in the Licence cost associated with the Optical Fibre Wide Area Network (WAN) are initially recorded at cost and amortised on a straight line basis over the period of the comprehensive result. relevant contract which is 20 years. Licence intangibles are subsequently carried at cost less accumulated amortisation and impairment losses. Other income Rental income Rental income is recognised on a time proportional basis and is brought to account when the Institute's right to receive the rental is established. 1.13 Liabilities FairPayables value of assets and services received free of charge or for nominal consideration ContributionsPayables consist of resourcesof: received free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective• contractual of payables, whether restrictionssuch as accounts or conditions payable, are and imposed unearned over income the use including of the contributions. deferred income Contributions from concession in the arrangements.form of services Accounts are only payable recognised represent when a fairliabilities value forcan goods be reliably and services determined provided and theto the services Institute would prior have to thebeen end purchased of the financial if not donated. year that are unpaid, and arise when the Institute becomes obliged to make future payments in respect of the purchase of those goods and services; and 1.08 Expenses• statutory from payables, transactions such as goods and services tax and fringe benefits tax payables. EmployeeContractual benefits payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and Expensesmeasured for similarly employee to contractual benefits are payables, recognised but when are not incurred, classified except as financial for contributions instruments in andrespect not includedof defined in benefit the category plans. of financial liabilities at amortised cost, because they do not arise from a contract. Retirement benefit obligations (i)Provisions Defined contribution plan ContributionsProvisions are to recognised defined contribution when the Institute plans are has expensed a present when obligation, they become the future payable. sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. (ii)The Defined amount benefit recognised plans as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the Therisks amount and uncertainties charged to surrounding the statement the of obligation. comprehensive Where income a provision in respect is measured of superannuation using the cash represents flows estimated the contributions to settle the made present by the obligation, Institute toits thecarrying superannuationamount is the present plan in value respect of thoseof current cash servicesflows. of current Institute staff. Superannuation contributions are made to the plans based on the relevant rules of each plan. TheEmployee Institute benefits does not recognise any deferred liability in respect of the plan(s) because the Institute has no legal or constructive obligation to pay future benefits relatingThe calculation to its employees; of employee its onlybenefits obligation includes is toall payrelevant superannuation on-costs and contributions are calculated as asand follows when atthey reporting fall due. date. The Department of Treasury and Finance recognises and discloses the State's defined benefit liabilities in its finance report.Page 14 of 53 29 Depreciation and amortisation Depreciation

2013_ANNUAL REPORT_FINAL.indd 29 Page 10 of 53 1/05/14 3:58 PM Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 1

Statement of significant accounting policies

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

1.06 Goods and Services Tax (GST) Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet. Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. Commitments and contingent assets or liabilities are presented on a gross basis.

1.07 Income from transactions Amounts disclosed as income are, where applicable, net of returns, allowances and duties and taxes. Revenue is recognised for each of the Institute’s major activities as follows: Government contributions Government contributions are recognised as revenue in the period when the Institute gains control of the contributions. Control is recognised upon receipt or notification by relevant authorities of the right to receive a contribution for the current period. Sale of goods and services (i) Student fees and charges Student fees and charges revenue is recognised by reference to the percentage of services provided. Where student fees and charges revenue has been clearly received in respect of courses or programs to be delivered in the following year, any non-refundable portion of the fees is treated as revenue in the year of receipt and the balance as Revenue in Advance. (ii) Fee for Service Fee for service revenue is recognised by reference to the percentage completion of each contract, i.e. in the reporting period in which the services are rendered. Where fee for service revenue of a reciprocal nature has been clearly received in respect of programs or services to be delivered in the following year, such amounts are disclosed as Revenue in Advance. (iii) Revenue from sale of goods Revenue from sale of goods is recognised by the Institute when: (a) the significant risks and rewards of ownership of the goods have transferred to the buyer; (b) the Institute retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (c) the amount of revenue can be reliably measured; (d) it is probable that the economic benefits associated with the transaction will flow to the Institute and; (e) the costs incurred or to be incurred in respect of the transaction can be measured reliably. Interest Interest from cash, short-term deposits and investments is brought to account on a time proportional basis taking into account interest rates applicable to the financial assets. Net realised and unrealised gains and losses on the revaluation of investments do not form part of income from transactions, but are reported as part of income from other economic flows in the net result or as unrealised gains and losses taken direct to equity, forming part of the total change in net worth in the comprehensive result. Other income NOTESNotes toRental the TOincomeFinancial THE Statements FINANCIAL - Advance TAFE STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013 for the yearRental ended income 31 December is recognised 2013 on a time proportional basis and is brought to account when the Institute's right to receive the rental is established.

Fair value of assets and services received free of charge or for nominal consideration NOTE 1 Contributions of resources received free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether restrictions or conditions are imposed over the use of the contributions. Contributions in the form of services are only recognised when a Statementfair of value significant can be accountingreliably determined policies and the services would have been purchased if not donated.

1.08 ExpensesRevaluations from of non-current transactions physical assets EmployeeNon-current benefits physical assets measured at fair value are revalued in accordance with FRDs issued by the Minister for Finance. This revaluation process normally Expensesoccurs every for employeefive years, benefits based upon are recognisedthe asset’s whenGovernment incurred, Purpose except Classification, for contributions but mayin respect occur ofmore defined frequently benefit if plans. fair value assessments indicate material Retirementchanges in values.benefit Revaluation obligations increases or decreases arise from differences between an asset’s carrying value and fair value. (i) Defined contribution plan ContributionsRevaluation increases to defined are contribution credited directly plans toare equity expensed in the when revaluation they become reserve, payable. except to the extent that an increase reverses a revaluation decrease in respect of that class of property, plant and equipment, previously recognised as an expense (other economic flows) in the net result, the increase is recognised as income (ii)(other Defined economic benefit plansflows) in determining the net result. Notes to ThetheRevaluation amount Financial chargeddecreases Statements to arethe recognisedstatement - Advance ofimmediately comprehensive TAFE as expenses income (other in respect economic of superannuation flows) in the netrepresents result, except the contributions to the extent made that by a creditthe Institute balance to exists the in the superannuationrevaluation reserve plan in in respect respect of of the current same services class of ofproperty, current plantInstitute and staff. equipment, Superannuation they are debitedcontributions to the are revaluation made to reserve.the plans based on the relevant rules of for the year ended 31 December 2013 each plan. TheRevaluation Institute increasesdoes not recogniseand revaluation any deferred decreases liability relating in respect to individual of the plan(s)assets within because a class the Instituteof property, has noplant legal and or equipment constructive are obligation offset against to pay one future another benefits within NOTE 1 relatingthat class to butits employees; are not offset its inonly respect obligation of assets is to in pay different superannuation classes. contributions as and when they fall due. The Department of Treasury and Finance recognisesRevaluation and reserves discloses are the not State's normally defined transferred benefit to liabilities accumulated in its finance funds on report. de-recognition of the relevant asset. StatementDepreciation Anyof significant accumulated and accounting amortisationdepreciation policies at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the Depreciationrevalued amount of the asset. DepreciationNon-current physical is provided assets on constructed property, by plant the Institute and equipment, including freehold buildings but excluding land. Depreciation is generally calculated on a straight-line basisThe costso as of to non-current write off the assets net cost constructed or other byrevalued the Institute amount includes of each the asset costPage over of all 10its materials ofexpected 53 useduseful in life construction, to its estimated direct residual labour onvalue. the Leaseholdproject, and improvements an appropriate areproportion depreciated of variable over the and period fixed of overheads. the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful lives, residual valuesBiological and assetsdepreciation method are reviewed at the end of each annual reporting period. Bloodstock DepreciationBloodstock is methods measured and at ratesfair value used less for eachestimated class ofpoint depreciable of sale costs. assets are: Intangibles ClassInternally-generated of asset intangible assets Method Rate/Rates BuildingsAn internally-generated intangible asset arising from development (or from the development phase of Straightan internal project) is recognised2.5% if, and only if, all of the Plantfollowing & equipment are demonstrated: Straight 10-33.3% Motor vehicles Straight 15.0% (a) the technical feasibility of completing the intangible asset so that it will be available for use or sale; Library collections Straight 15-25% (b) the intention to complete the intangible asset and use or sell it; Other Straight 10.0% (c) the ability to use or sell the asset; (d) how the intangible asset will generate probable future economic benefits; The assets' residual values and useful lives are reviewed and adjusted if appropriate on an annual basis. (e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and There has been no change in the methodology and rates for 2013. Amortisation(f) the ability to measure reliably the expenditure attributable to the intangible asset during its development. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred. Intangible assets with finite lives are amortised on a straight line basis over the assets useful lives. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The amortisation period and the Intangible assets are measured at cost less accumulated amortisation and impairment, and are amortised on a straight-line basis over their useful lives as follows: amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each annual reporting period. In addition, an assessment is made at each reporting date to determine whether there are indicators that the intangible asset concerned is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount. 2013 2012 Capitalised software development cost (years) 10 3-5

IntangibleGoodwill assets with indefinite lives are not amortised. The useful life of intangible assets that are not being amortised are reviewed each period to determine whetherGoodwill events and goodwill and circumstances on acquisition continue is initially to support recorded an at indefinite the amount useful by lifewhich assessment the purchase for that price asset. for a In business addition, or the for Institutean ownership tests allinterest intangible in a controlled assets with indefiniteentity exceeds lives for the impairment fair valued attributedby comparing to its its net recoverable assets at dateamount of acquisition. with its carrying Goodwill amount: on acquisition of subsidiaries is included in intangible assets. Goodwill on (a)acquisition annually; of associates is included in investments in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated (b)impairment whenever losses. there isGains an indication and losses that on thethe intangibledisposal of asset an entity may includebe impaired. the carrying amount of goodwill relating to the entity sold. Any excess of the carrying amount over the recoverable amount is recognised as an impairment loss. InterestLicence Expense InterestLicence expensecost associated is recognised with the as expensesOptical Fibre in the Wide period Area in Network which they (WAN) are areincurred. initially recorded at cost and amortised on a straight line basis over the period of the Interestrelevant expense contract includes which is interest 20 years. on Licence bank overdrafts intangibles and are short subsequently term and longcarried term at costborrowings, less accumulated amortisation amortisation of discounts and or impairment premiums relatinglosses. to borrowings, amortisation of ancillary costs incurred in connection with the arrangement of borrowings and finance lease charges. Grants and other transfers 1.13 GrantsLiabilities and other transfers to third parties are recognised as an expense in the reporting period in which they are paid or payable. Payables OtherPayables operating consist expenses of: Supplies• contractual and services payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent Suppliesliabilities and for servicesgoods and expenses services are provided recognised to the as Institutean expense prior in tothe the reporting end of theperiod financial in which year they that are are incurred. unpaid, andThe arisecarrying when amounts the Institute of any becomes inventories obliged held-for- to distributionmake future are payments expensed in whenrespect distributed. of the purchase of those goods and services; and • statutory payables, such as goods and services tax and fringe benefits tax payables. Fair value of assets and services provided free of charge or for nominal consideration ResourcesContractual provided payables free are of classified charge or as for financial nominal instruments consideration and arecategorised recognised as atfinancial their fair liabilities value. at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, 1.09 Otherbecause economic they do not flows arise included from a contract. in net result OtherProvisions economic flows measure the change in volume or value of assets or liabilities that do not result from transactions. NetProvisions gain/(loss) are recognisedon non-financial when assetsthe Institute has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can Netbe measuredgain/(loss) reliably. on non-financial assets and liabilities includes realised and unrealised gains and losses from revaluations, impairments, and disposals of all physical assetsThe amount and intangible recognised assets. as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying Disposal of non-financial assets amount is the present value of those cash flows. Any gain or loss on disposal of non-financial assets is recognised at the date control of the asset is passed to the buyer and is determined after deducting from the proceedsEmployee the benefits carrying value of the asset at the time. The calculation of employee benefits includes all relevant on-costs and are calculated as follows at reporting date. Gain/(loss) arising from fair value changes of biological assets 30 Biological assets are measured at fair value, and the resultant gain/(loss) is reportedPage 14 of as 53 an other economic flow.

Impairment of assets Goodwill and intangible assets with indefinite useful lives (and intangible assets not yet available for use) are tested annually for impairment (i.e. as to whether 2013_ANNUAL REPORT_FINAL.inddtheir carrying value 30 exceeds their recoverable amount and so require write downs). 1/05/14 3:58 PM All other assets are assessed annually for indications of impairment, except for: - Inventories; - Financial assets; - Certain biological assets related to agricultural activity; If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset's carrying value exceeds its recoverable amount, the difference is written off by a charge to the statement of comprehensive income, except to the extent that the write down can be debited to an asset revaluation reserve amount applicable to that class of asset.

Page 11 of 53 Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 1

Statement of significant accounting policies

Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land. Depreciation is generally calculated on a straight-line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.

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

Class of asset Method Rate/Rates Buildings Straight 2.5% Plant & equipment Straight 10-33.3% Motor vehicles Straight 15.0% Library collections Straight 15-25% Other Straight 10.0%

The assets' residual values and useful lives are reviewed and adjusted if appropriate on an annual basis. There has been no change in the methodology and rates for 2013. Amortisation Intangible assets with finite lives are amortised on a straight line basis over the assets useful lives. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each annual reporting period. In addition, an assessment is made at each reporting date to determine whether there are indicators that the intangible asset concerned is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount.

Intangible assets with indefinite lives are not amortised. The useful life of intangible assets that are not being amortised are reviewed each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. In addition, the Institute tests all intangible assets with indefinite lives for impairment by comparing its recoverable amount with its carrying amount: (a) annually; (b) whenever there is an indication that the intangible asset may be impaired. Any excess of the carrying amount over the recoverable amount is recognised as an impairment loss. Interest Expense Interest expense is recognised as expenses in the period in which they are incurred. Interest expense includes interest on bank overdrafts and short term and long term borrowings, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary costs incurred in connection with the arrangement of borrowings and finance lease charges. Grants and other transfers Grants and other transfers to third parties are recognised as an expense in the reporting period in which they are paid or payable. Notes to the Financial Statements - Advance TAFE NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013 for the yearOther ended operating 31 December expenses 2013 Supplies and services Supplies and services expenses are recognised as an expense in the reporting period in which they are incurred. The carrying amounts of any inventories held-for- NOTE 1 distribution are expensed when distributed.

StatementFair of value significant of assets accounting and services provided policies free of charge or for nominal consideration Resources provided free of charge or for nominal consideration are recognised at their fair value. Revaluations of non-current physical assets 1.09 OtherNon-current economic physical flows assets included measured in net at fair result value are revalued in accordance with FRDs issued by the Minister for Finance. This revaluation process normally Other economic flows measure the change in volume or value of assets or liabilities that do not result from transactions. occurs every five years, based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material Netchanges gain/(loss) in values. on non-financial Revaluation increases assets or decreases arise from differences between an asset’s carrying value and fair value. Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses from revaluations, impairments, and disposals of all physical assetsRevaluation and intangible increases assets. are credited directly to equity in the revaluation reserve, except to the extent that an increase reverses a revaluation decrease in respect of that class of property, plant and equipment, previously recognised as an expense (other economic flows) in the net result, the increase is recognised as income Disposal of non-financial assets (other economic flows) in determining the net result. Any gain or loss on disposal of non-financial assets is recognised at the date control of the asset is passed to the buyer and is determined after deducting from the Revaluation decreases are recognised immediately as expenses (other economic flows) in the net result, except to the extent that a credit balance exists in the proceeds the carrying value of the asset at the time. revaluation reserve in respect of the same class of property, plant and equipment, they are debited to the revaluation reserve. Gain/(loss) arising from fair value changes of biological assets BiologicalRevaluation assets increases are measured and revaluation at fair value, decreases and the relating resultant to individual gain/(loss) assets is reported within asa class an other of property, economic plant flow. and equipment are offset against one another within that class but are not offset in respect of assets in different classes. Impairment of assets Revaluation reserves are not normally transferred to accumulated funds on de-recognition of the relevant asset. Goodwill and intangible assets with indefinite useful lives (and intangible assets not yet available for use) are tested annually for impairment (i.e. as to whether Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the their carrying value exceeds their recoverable amount and so require write downs). revalued amount of the asset. Notes to Allthe other Financial assets are Statements assessed annually - Advance for indications TAFE of impairment, except for: for the year- ended Non-currentInventories; 31 December physical assets 2013 constructed by the Institute - TheFinancial cost of assets; non-current assets constructed by the Institute includes the cost of all materials used in construction, direct labour on the project, and an appropriate NOTE 1 - proportionCertain biological of variable assets and related fixed overheads.to agricultural activity; Biological assets If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an Bloodstock Statementasset's of significant carrying valueaccounting exceeds policies its recoverable amount, the difference is written off by a charge to the statement of comprehensive income, except to the extent thatBloodstock the write is downmeasured can beat fairdebited value to less an estimatedasset revaluation point of reserve sale costs. amount applicable to that class of asset. Intangibles IfInternally-generated there is an indication intangible that there assets has been a change in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, the carrying amountAn internally-generated shall be increased intangible to its recoverable asset arising amount. from Thisdevelopment reversal of (or the from impairment the development loss occurs phase only of to an the internal extent project)that the is asset’s recognised carrying if, andamount only doesif, all notof the exceedfollowing the are carrying demonstrated: amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years. (a) the technical feasibility of completing the intangible asset so that it willPage be available 11 of 53 for use or sale; It(b) is deemedthe intention that, toin completethe event theof the intangible loss or destruction asset and use of anor sellasset, it; the future economic benefits arising from the use of the asset will be replaced unless a specific(c) the abilitydecision to touse the or contrarysell the asset; has been made. The(d) howrecoverable the intangible amount asset for most will generate assets is probablemeasured future at the economic higher of benefits;depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held(e) the primarily availability to generate of adequate net cash technical, flows is financial measured and at other the higher resources of the to presentcomplete value the ofdevelopment future cash andflows to expected use or sell to the be intangibleobtained from asset; the and asset and fair value less costs to sell. It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific(f) the abilitydecision to tomeasure the contrary reliably has the been expenditure made. attributable to the intangible asset during its development. NetWhere gain/(loss) no internally-generated on financial instruments intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred. Net gain/(loss) on financial instruments includes realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair valueIntangible through assets profit are or measured loss or held-for-trading, at cost less accumulated impairment amortisation and reversal and of impairment,impairment forand financial are amortised instruments on a straight-line at amortised basis cost, over and their disposals useful of lives financial as follows: assets. Revaluations of financial instruments at fair value 2013 2012 TheCapitalised revaluation software gain/(loss) development on financial cost instruments (years) at fair value excludes dividends or interest10 earned on 3-5 financial assets, which is reported as part of income from transactions. ImpairmentGoodwill of financial assets FinancialGoodwill assets and goodwill have been on acquisitionassessed for is impairment initially recorded in accordance at the amount with Australian by which Accountingthe purchase Standards. price for aWhere business a financial or for an asset's ownership fair value interest at balance in a controlled date has reducedentity exceeds by 5% percentthe fair valuedor more attributed than its cost to its price; net assetsor where at date it's fair of acquisition.value has been Goodwill less than on acquisitionits cost price of forsubsidiaries a period ofis includedthree or morein intangible months, assets. the financial Goodwill on instrumentacquisition is of treated associates as impaired. is included in investments in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated Badimpairment and doubtful losses. debts Gains are and assessed losses on thea regular disposal basis. of anThose entity bad include debts theconsidered carrying as amount written of off goodwill by mutual relating consent to the are entity classified sold. as a transaction expense. The allowance for doubtful receivables and bad debts not written off by mutual consent are adjusted as ‘other economic flows’. Licence Licence cost associated with the Optical Fibre Wide Area Network (WAN) are initially recorded at cost and amortised on a straight line basis over the period of the Other gains/(losses) from other economic flows relevant contract which is 20 years. Licence intangibles are subsequently carried at cost less accumulated amortisation and impairment losses. Other gains/(losses) from other economic flows include the gains or losses from reclassifications of amounts from reserves and/or accumulated surplus to net result, and from the revaluation of the present value of the long service leave liability due to changes in the bond interest rates.

1.13 Liabilities 1.10 FinancialPayables assets CashPayables and depositsconsist of: Cash• contractual and deposits, payables, including such cash as accounts equivalents, payable, comprise and unearned cash on hand income and including cash at bank, deferred deposits income at callfrom and concession those highly arrangements. liquid investments Accounts with payable an original represent maturityliabilities of for three goods months and services or less, providedwhich are to held the forInstitute the purpose prior to of the meeting end of short the financial term cash year commitments that are unpaid, rather and than arise for when investment the Institute purposes, becomes and which obliged are to readilymake futureconvertible payments to known in respect amounts of the of purchasecash and areof those subject goods to an and insignificant services; and risk of changes in value. For• statutory cash flow payables, statement such presentation as goods and purposes, services cash tax andand fringecash equivalents benefits tax includes payables. bank overdrafts, which are included as borrowings on the balance sheet. Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and Receivablesmeasured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, Receivablesbecause they consist do not of: arise from a contract. •Provisions statutory receivables, which include predominantly amounts owing from the Victorian Government and GST input tax credits recoverable; and •Provisions contractual are receivables, recognised which when includethe Institute debtors has ina presentrelation obligation,to goods and the services, future sacrifice loans to of third economic parties, benefits accrued is investment probable, and income, the amount and finance of the lease provision can receivablesbe measured reliably. Receivables that are contractual are classified as financial instruments. Statutory receivables are not classified as financial instruments. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less an allowance for risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying impairment. Aamount provision is thefor presentdoubtful value receivables of those is cashmade flows. when there is objective evidence that the debts may not be collected and bad debts are written off when identified. Employee benefits InvestmentsThe calculation and of other employee financial benefits assets includes all relevant on-costs and are calculated as follows at reporting date. Investments are classified in the following categories: Page 14 of 53 • financial assets at fair value through profit or loss, 31 • loans and receivables, and • available for sale financial assets.

2013_ANNUAL REPORT_FINAL.inddThe classification 31 depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial 1/05/14 3:58 PM recognition. Any dividend or interest earned on the financial asset is recognised in the consolidated comprehensive operating statement as a transaction. Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when: • the rights to receive cash flows from the asset have expired; or • the Institute retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass through’ arrangement; or • the Institute has transferred its rights to receive cash flows from the asset and either: (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. Where the Institute has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to the extent of the Institute’s continuing involvement in the asset. Impairment of financial assets At the end of each reporting period, the Institute assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings. All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

Page 12 of 53 Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 1

Statement of significant accounting policies

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

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash flows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell. It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. Net gain/(loss) on financial instruments Net gain/(loss) on financial instruments includes realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading, impairment and reversal of impairment for financial instruments at amortised cost, and disposals of financial assets. Revaluations of financial instruments at fair value The revaluation gain/(loss) on financial instruments at fair value excludes dividends or interest earned on financial assets, which is reported as part of income from transactions. Impairment of financial assets Financial assets have been assessed for impairment in accordance with Australian Accounting Standards. Where a financial asset's fair value at balance date has reduced by 5% percent or more than its cost price; or where it's fair value has been less than its cost price for a period of three or more months, the financial instrument is treated as impaired. NOTESNotes to theBad andTOFinancial doubtful THE Statements debts FINANCIAL are assessed - Advance on a regular TAFE STATEMENT basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. The FOR THE YEAR ENDED 31 DECEMBER 2013 for the year endedallowance 31 December for doubtful 2013 receivables and bad debts not written off by mutual consent are adjusted as ‘other economic flows’.

NOTE 1 Other gains/(losses) from other economic flows Other gains/(losses) from other economic flows include the gains or losses from reclassifications of amounts from reserves and/or accumulated surplus to net result, and from the revaluation of the present value of the long service leave liability due to changes in the bond interest rates. Statement of significant accounting policies

1.10 RevaluationsFinancial assetsof non-current physical assets Non-currentCash and deposits physical assets measured at fair value are revalued in accordance with FRDs issued by the Minister for Finance. This revaluation process normally occursCash and every deposits, five years, including based cashupon equivalents, the asset’s Governmentcomprise cash Purpose on hand Classification, and cash at bank,but may deposits occur atmore call frequentlyand those highlyif fair value liquid assessments investments indicate with an materialoriginal changesmaturity in of values. three Revaluationmonths or less, increases which orare decreases held for the arise purpose from differences of meeting between short term an cashasset’s commitments carrying value rather and thanfair value. for investment purposes, and which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. RevaluationFor cash flow increases statement are presentationcredited directly purposes, to equity cash in and the cashrevaluation equivalents reserve, includes except bank to the overdrafts, extent that which an increaseare included reverses as borrowings a revaluation on the decrease balance in sheet.respect of that class of property, plant and equipment, previously recognised as an expense (other economic flows) in the net result, the increase is recognised as income (other economic flows) in determining the net result. Receivables Revaluation decreases are recognised immediately as expenses (other economic flows) in the net result, except to the extent that a credit balance exists in the Receivables consist of: revaluation reserve in respect of the same class of property, plant and equipment, they are debited to the revaluation reserve. • statutory receivables, which include predominantly amounts owing from the Victorian Government and GST input tax credits recoverable; and • contractual receivables, which include debtors in relation to goods and services, loans to third parties, accrued investment income, and finance lease Revaluationreceivables increases and revaluation decreases relating to individual assets within a class of property, plant and equipment are offset against one another within thatReceivables class but that are notare offsetcontractual in respect are classified of assets asin financialdifferent instruments. classes. Statutory receivables are not classified as financial instruments. RevaluationReceivables reserves are recognised are not initially normally at transferredfair value and to subsequentlyaccumulated fundsmeasured on de-recognition at amortised cost,of the using relevant the effective asset. interest method, less an allowance for Anyimpairment. accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revaluedA provision amount for doubtful of the asset. receivables is made when there is objective evidence that the debts may not be collected and bad debts are written off when identified.

Non-current physical assets constructed by the Institute TheInvestments cost of non-current and other assetsfinancial constructed assets by the Institute includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportionInvestments of arevariable classified and fixedin the overheads. following categories: Biological• financial assets assets at fair value through profit or loss, • loans and receivables, and Bloodstock • available for sale financial assets. Bloodstock is measured at fair value less estimated point of sale costs. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial Intangibles Internally-generatedrecognition. intangible assets AnAny internally-generated dividend or interest intangible earned on asset the financialarising from asset development is recognised (or in fromthe consolidated the development comprehensive phase of an operating internal project)statement is recognised as a transaction. if, and only if, all of the followingDerecognition are demonstrated: of financial assets (a)A financialthe technical asset feasibility (or, where of applicable, completing a thepart intangible of a financial asset asset so that or part it will of be a group available of similar for use financial or sale; assets) is derecognised when: (b) •the the intention rights to to receive complete cash the flows intangible from the asset asset and have use expired; or sell it; or (c) the• the ability Institute to use retains or sell the the right asset; to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party (d) underhow the a ‘pass intangible through’ asset arrangement; will generate or probable future economic benefits; (e) •the the availability Institute has of adequate transferred technical, its rights financial to receive and cash other flows resources from the to assetcomplete and either:the development and to use or sell the intangible asset; and (a) has transferred substantially all the risks and rewards of the asset, or Notes to(f) the the(b) hasabilityFinancial neither to measure transferred Statements reliably nor the retained - Advanceexpenditure substantially TAFE attributable all the to risks the and intangible rewards asset of the during asset, its but development. has transferred control of the asset. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred. for the yearWhere ended the31 December Institute has 2013 neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to the extent of the Institute’s continuing involvement in the asset. Intangible assets are measured at cost less accumulated amortisation and impairment, and are amortised on a straight-line basis over their useful lives as follows: NOTE 1 Impairment of financial assets At the end of each reporting period, the Institute assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. 2013 2012 Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit StatementCapitalised of significant software accounting development policies cost (years) 10 3-5 ratings. All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment.

GoodwillBad and doubtful debts for financial assets are assessed on a regular basis. Those bad debts considered as written off by mutual consent are classified as a Goodwilltransaction and expense. goodwill Bad on acquisition debts not written is initially off recorded by mutual at consent the amount and theby whichPageallowance 12 the of purchase for53 doubtful price receivables for a business are classifiedor for an asownership ‘other economic interest inflows’ a controlled in the net entityresult. exceeds the fair valued attributed to its net assets at date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. the effective interest rate. In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing Licencemateriality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets. Licence cost associated with the Optical Fibre Wide Area Network (WAN) are initially recorded at cost and amortised on a straight line basis over the period of the 1.11 relevantLeases contract which is 20 years. Licence intangibles are subsequently carried at cost less accumulated amortisation and impairment losses. A lease is a right to use an asset for an agreed period of time in exchange for payment. Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and 1.13 Liabilitiesrewards incidental to ownership. Leases of property, plant and equipment are classified as finance infrastructure leases whenever the terms of the lease transfer Payablessubstantially all the risks and rewards of ownership from the lessor to the lessee. All other leases are classified as operating leases Payables consist of: •Operating contractual leases payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent liabilities for goods and services provided to the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to Institute as lessor make future payments in respect of the purchase of those goods and services; and •Rental statutory income payables, from operatingsuch as goods leases and is servicesrecognised tax onand a fringestraight-line benefits basis tax overpayables. the term of the relevant lease. All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and asset, irrespective of the incentive’s nature or form or the timing of payments. measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, becauseInstitute they as lessee do not arise from a contract. ProvisionsOperating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight-line basis over Provisionsthe lease term,are recognised except where when another the Institute systematic has a basispresent is more obligation, representative the future of sacrifice the time of pattern economic of the benefits benefits is probable, derived from and the useamount of the of leased the provision asset. The can beleased measured asset reliably.is not recognised in the balance sheet. TheAll incentivesamount recognised for the agreement as a provision of a newis the or best renewed estimate operating of the considerationlease are recognised required as toan settle integral the part present of the obligation net consideration at reporting agreed date, for taking the useinto of account the leased the risksasset, and irrespective uncertainties of the surrounding incentive’s the nature obligation. or form Where or the a timing provision of payments. is measured using the cash flows estimated to settle the present obligation, its carrying amountIn the event is the that present lease value incentives of those are cash received flows. to enter into operating leases, the aggregate cost of incentives are recognised as a reduction of rental expense over the lease term on a straight-line basis, unless another systematic basis is more representative of the time pattern in which economic benefits from the leased Employeeasset are consumed.benefits The calculation of employee benefits includes all relevant on-costs and are calculated as follows at reporting date. 32 1.12 Non-Financial Assets Page 14 of 53 Inventories Inventories include goods and other property held either for sale or for distribution at a zero or nominal cost in the ordinary course of business operations. It includes land held-for-sale and excludes depreciable assets. 2013_ANNUAL REPORT_FINAL.inddInventories held-for-distribution 32 are measured at cost, adjusted for any loss of service potential. All other inventories, including land held for sale, are measured 1/05/14 3:58 PM at the lower of cost and net realisable value. The basis used in assessing loss of service potential for inventories held-for-distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the way it did when it was first acquired.

Cost is assigned to land for sale (undeveloped, under development and developed) and to other high value, low volume inventory items on a specific identification of cost basis. Cost for all other inventory is measured on the basis of weighted average cost. Inventories acquired for no cost or nominal consideration are measured at current replacement cost at the date of acquisition. Property, plant and equipment All non-financial physical assets, are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment.

The initial cost for non-financial physical assets under a finance lease is measured at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. Where an asset is received for no or nominal consideration, the cost is the asset’s fair value at the date of acquisition. Non-financial physical assets such as national parks, other Crown land and heritage assets are measured at fair value with regard to the property’s highest and The fair value of infrastructure systems and plant, equipment and vehicles, is normally determined by reference to the asset’s depreciated replacement cost, or The cost of constructed non-financial physical assets includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportion of variable and fixed overheads. Where an asset is received for no or nominal consideration, the cost is the asset’s fair value at the date of acquisition. For the accounting policy on impairment of non-financial physical assets refer to Note on Impairment of non-financial assets. Library collections

The Institute values the cost of the library collection based on the following methodology - Library collections are valued at cost less accumulated depreciation Leasehold improvements The cost of a leasehold improvements is capitalised as an asset and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter. Restrictive nature of cultural and heritage assets, Crown land and infrastructures Certain agencies hold cultural assets, heritage assets, Crown land and infrastructure, which are deemed worthy of preservation because of the social rather than financial benefits they provide to the community. Consequently, there are certain limitations and restrictions imposed on their use and/or disposal.

Non financial physical assets constructed by the Institute The cost of non-financial physical assets constructed by the Institute includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportion of variable and fixed overheads. Page 13 of 53 Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 1

Statement of significant accounting policies

Bad and doubtful debts for financial assets are assessed on a regular basis. Those bad debts considered as written off by mutual consent are classified as a transaction expense. Bad debts not written off by mutual consent and the allowance for doubtful receivables are classified as ‘other economic flows’ in the net result. The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets. 1.11 Leases A lease is a right to use an asset for an agreed period of time in exchange for payment. Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to ownership. Leases of property, plant and equipment are classified as finance infrastructure leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership from the lessor to the lessee. All other leases are classified as operating leases

Operating leases Institute as lessor Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments. Institute as lessee Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight-line basis over Notes to thethe lease Financial term, except Statements where another - Advance systematic TAFE basis is more representativeNOTES of the time patternTO ofTHE the benefits FINANCIAL derived from the use ofSTATEMENT the leased asset. The leased asset is not recognised in the balance sheet. FOR THE YEAR ENDED 31 DECEMBER 2013 for the year ended 31 December 2013 All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments. NOTE 1 In the event that lease incentives are received to enter into operating leases, the aggregate cost of incentives are recognised as a reduction of rental expense over the lease term on a straight-line basis, unless another systematic basis is more representative of the time pattern in which economic benefits from the leased Statementasset of significant are consumed. accounting policies

1.12 RevaluationsNon-Financial of non-current Assets physical assets InventoriesNon-current physical assets measured at fair value are revalued in accordance with FRDs issued by the Minister for Finance. This revaluation process normally Inventoriesoccurs every include five years, goods based and uponother theproperty asset’s held Government either for Purposesale or for Classification, distribution butat a may zero occur or nominal more frequentlycost in the ifordinary fair value course assessments of business indicate operations. material It includeschanges inland values. held-for-sale Revaluation and increasesexcludes depreciableor decreases assets. arise from differences between an asset’s carrying value and fair value. Inventories held-for-distribution are measured at cost, adjusted for any loss of service potential. All other inventories, including land held for sale, are measured atRevaluation the lower increasesof cost and are net credited realisable directly value. to equity in the revaluation reserve, except to the extent that an increase reverses a revaluation decrease in respect of Thethat basisclass usedof property, in assessing plant loss and of equipment, service potential previously for inventories recognised held-for-distributionas an expense (other include economic current flows) replacement in the net result, cost and the technical increase oris recognised functional as income obsolescence.(other economic Technical flows) in obsolescence determining occurs the net when result. an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existingRevaluation technologies. decreases Functional are recognised obsolescence immediately occurs as expenseswhen an item(other no economic longer functions flows) in the the way net it result, did when except it was to the first extent acquired. that a credit balance exists in the revaluation reserve in respect of the same class of property, plant and equipment, they are debited to the revaluation reserve. Cost is assigned to land for sale (undeveloped, under development and developed) and to other high value, low volume inventory items on a specific identificationRevaluation increases of cost basis. and revaluation decreases relating to individual assets within a class of property, plant and equipment are offset against one another within Costthat classfor all but other are inventorynot offset is in measured respect of on assets the basisin different of weighted classes. average cost. InventoriesRevaluation acquired reserves forare no not cost normally or nominal transferred consideration to accumulated are measured funds aton current de-recognition replacement of the cost relevant at the asset. date of acquisition. Property,Any accumulated plant and depreciation equipment at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the Allrevalued non-financial amount physical of the asset. assets, are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment.

Non-current physical assets constructed by the Institute The initial cost for non-financial physical assets under a finance lease is measured at amounts equal to the fair value of the leased asset or, if lower, the present The cost of non-current assets constructed by the Institute includes the cost of all materials used in construction, direct labour on the project, and an appropriate value of the minimum lease payments, each determined at the inception of the lease. proportion of variable and fixed overheads. WhereBiological an assetassets is received for no or nominal consideration, the cost is the asset’s fair value at the date of acquisition. Non-financialBloodstock physical assets such as national parks, other Crown land and heritage assets are measured at fair value with regard to the property’s highest and bestBloodstock use after is measureddue consideration at fair value is made less estimatedfor any legal point or constructiveof sale costs. restrictions imposed on the asset, public announcements or commitments made in relation toIntangibles the intended use of the asset. Theoretical opportunities that may be available in relation to the asset are not taken into account until it is virtually certain that theInternally-generated restrictions will intangible no longer assets apply. TheAn internally-generated fair value of infrastructure intangible systems asset and arising plant, from equipment development and vehicles, (or from is the normally development determined phase by of reference an internal to project) the asset’s is recognised depreciated if, andreplacement only if, all cost, of the or wherefollowing the are infrastructure demonstrated: is held by a for profit entity, the fair value may be derived from estimates of the present value of future cash flows. For plant, equipment and(a) the vehicles, technical existing feasibility depreciated of completing historical the cost intangible is generally asset a so reasonable that it will proxy be available for depreciated for use or replacement sale; cost because of the short lives of the assets concerned.(b) the intention to complete the intangible asset and use or sell it; The(c) the cost ability of constructed to use or sell non-financial the asset; physical assets includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportion(d) how the of intangible variable andasset fixed will overheads.generate probable future economic benefits; (e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and Where an asset is received for no or nominal consideration, the cost is the asset’s fair value at the date of acquisition. For the accounting policy on impairment of non-financial physical assets refer to Note on Impairment of non-financial assets. Notes to (f)the the Financial ability to measure Statements reliably the - Advance expenditure TAFE attributable to the intangible asset during its development. Library collections for the yearWhere ended no31 internally-generatedDecember 2013 intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred. The Institute values the cost of the library collection based on the following methodology - LibraryIntangible collections assets are are measured valued at at cost cost less less accumulated accumulated depreciation amortisation and impairment, and are amortised on a straight-line basis over their useful lives as follows: NOTE 1 Leasehold improvements The cost of a leasehold improvements is capitalised as an asset and depreciated over the2013 remaining term2012 of the lease or the estimated useful life of the Statementimprovements,Capitalised of significant software whicheveraccounting development is thepolicies shorter. cost (years) 10 3-5

RestrictiveGoodwill nature of cultural and heritage assets, Crown land and infrastructures Page 5 of 10 CertainGoodwill agencies and goodwill hold cultural on acquisition assets, heritageis initially assets, recorded Crown at the land amount and infrastructure, by which the whichpurchase are pricedeemed for worthya business of preservation or for an ownership because interest of the social in a controlled rather than financialentity exceeds benefits the they fair providevalued attributed to the community. to its net Consequently,assets at date ofthere acquisition. are certain Goodwill limitations on acquisition and restrictions of subsidiaries imposed ison included their use in and/or intangible disposal. assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated Nonimpairment financial losses. physical Gains assets and constructedlosses on the by disposal the Institute of an entity include the carrying amount of goodwill relating to the entity sold. The cost of non-financial physical assets constructed by the Institute includes the cost of all materials used in construction, direct labour on the project, and an Licenceappropriate proportion of variable and fixed overheads. RevaluationsLicence cost ofassociated non-current with physical the Optical assets Fibre Wide Area Network (WAN) are initially recorded at cost and amortised on a straight line basis over the period of the Non-currentrelevant contract physical which assets is 20 measured years. Licence at fair intangibles value are revaluedare subsequently in accordance carried with at costFRDs less issued accumulated by the Minister amortisation for Finance. and impairment This revaluation losses. process normally occurs every five years, based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material changes in values. Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value. 1.13 Liabilities PayablesRevaluation increases are credited directly to equity in the revaluation reserve, except to the extent that an increase reverses a revaluation decrease in respect of Payablesthat class consistof property, of: plant and equipment, previously recognised as an expense (other economic flows) in the net result, the increase is recognised as income •(other contractual economic payables, flows) insuch determining as accounts the payable, net result. and unearned income including deferred income from concession arrangements. Accounts payable represent Revaluationliabilities for decreasesgoods and are services recognised provided immediately to the Institute as expenses prior to (other the end economic of the financialflows) in yearthe netthat result, are unpaid, except and to the arise extent when that the a Institute credit balance becomes exists obliged in the to revaluationmake future reserve payments in respect in respect of the of the same purchase class of of property, those goods plant and and services; equipment, and they are debited to the revaluation reserve. • statutory payables, such as goods and services tax and fringe benefits tax payables. ContractualRevaluation payablesincreases are and classified revaluation as financial decreases instruments relating to and individual categorised assets as within financial a class liabilities of property, at amortised plant and cost. equipment Statutory are payables offset againstare recognised one another and within measuredthat class but similarly are not to offsetcontractual in respect payables, of assets but inare different not classified classes. as financial instruments and not included in the category of financial liabilities at amortised cost, becauseRevaluation they reserves do not ariseare not from normally a contract. transferred to accumulated funds on de-recognition of the relevant asset. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the Provisions revalued amount of the asset. Provisions are recognised when the Institute has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can Non-currentbe measured physical reliably. assets constructed by the Institute The amountcost of non-current recognised assetsas a provision constructed is the by best the estimate Institute ofincludes the consideration the cost of allrequired materials to settleused inthe construction, present obligation direct labourat reporting on the date, project, taking and into an appropriateaccount the risksproportion and uncertainties of variable andsurrounding fixed overheads. the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amountBiological is assetsthe present value of those cash flows. Bloodstock Employee benefits Bloodstock is measured at fair value less estimated point of sale costs. The calculation of employee benefits includes all relevant on-costs and are calculated as follows at reporting date. Intangibles Page 14 of 53 Internally-generated intangible assets 33 An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated: (a) the technical feasibility of completing the intangible asset so that it will be available for use or sale; 2013_ANNUAL REPORT_FINAL.indd(b) the intention 33 to complete the intangible asset and use or sell it; 1/05/14 3:58 PM (c) the ability to use or sell the asset; (d) how the intangible asset will generate probable future economic benefits; (e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

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

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

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

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

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

1.13 Liabilities Payables Payables consist of: • contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent liabilities for goods and services provided to the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to make future payments in respect of the purchase of those goods and services; and • statutory payables, such as goods and services tax and fringe benefits tax payables. Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract. Provisions

Page 6 of 10 Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 1

Statement of significant accounting policies

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

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

Revaluation increases and revaluation decreases relating to individual assets within a class of property, plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes. Revaluation reserves are not normally transferred to accumulated funds on de-recognition of the relevant asset. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the NOTESNotes to revaluedthe TOFinancial amount THE ofStatements the FINANCIALasset. - Advance TAFE STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013 for the yearNon-current ended 31 December physical assets 2013 constructed by the Institute The cost of non-current assets constructed by the Institute includes the cost of all materials used in construction, direct labour on the project, and an appropriate NOTE 1 proportion of variable and fixed overheads. Biological assets Bloodstock Statement of significant accounting policies Bloodstock is measured at fair value less estimated point of sale costs. Intangibles Internally-generatedRevaluations of non-current intangible physical assets assets AnNon-current internally-generated physical assets intangible measured asset at arising fair value from are development revalued in accordance(or from the with development FRDs issued phase by the of Ministeran internal for project) Finance. is This recognised revaluation if, and process only if, normally all of the followingoccurs every are fivedemonstrated: years, based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material changes in values. Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value. (a) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (b) the intention to complete the intangible asset and use or sell it; (c)Revaluation the ability increases to use or are sell credited the asset; directly to equity in the revaluation reserve, except to the extent that an increase reverses a revaluation decrease in respect of (d)that how class the of intangibleproperty, plantasset andwill generateequipment, probable previously future recognised economic as benefits; an expense (other economic flows) in the net result, the increase is recognised as income (e)(other the economicavailability flows) of adequate in determining technical, the financial net result. and other resources to complete the development and to use or sell the intangible asset; and Revaluation decreases are recognised immediately as expenses (other economic flows) in the net result, except to the extent that a credit balance exists in the (f)revaluation the ability reserve to measure in respect reliably of thethe sameexpenditure class of attributable property, plant to the and intangible equipment, asset they during are debited its development. to the revaluation reserve. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred. Revaluation increases and revaluation decreases relating to individual assets within a class of property, plant and equipment are offset against one another within Intangiblethat class but assets are arenot measured offset in respect at cost ofless assets accumulated in different amortisation classes. and impairment, and are amortised on a straight-line basis over their useful lives as follows: Revaluation reserves are not normally transferred to accumulated funds on de-recognition of the relevant asset. Any accumulated depreciation at the date of revaluation is eliminated against the gross2013 carrying amount2012 of the asset and the net amount is restated to the Capitalisedrevalued amount software of thedevelopment asset. cost (years) 10 3-5 Non-current physical assets constructed by the Institute TheGoodwill cost of non-current assets constructed by the Institute includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportionGoodwill and of goodwillvariable andon acquisition fixed overheads. is initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled Biologicalentity exceeds assets the fair valued attributed to its net assets at date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated Bloodstock impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Bloodstock is measured at fair value less estimated point of sale costs. LicenceIntangibles Internally-generated intangible assets Licence cost associated with the Optical Fibre Wide Area Network (WAN) are initially recorded at cost and amortised on a straight line basis over the period of the relevantAn internally-generated contract which isintangible 20 years. asset Licence arising intangibles from development are subsequently (or from carried the development at cost less accumulated phase of an amortisationinternal project) and isimpairment recognised losses. if, and only if, all of the following are demonstrated: (a) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (b) the intention to complete the intangible asset and use or sell it; 1.13 (c)Liabilities the ability to use or sell the asset; Payables(d) how the intangible asset will generate probable future economic benefits; (e)Payables the availability consist of: of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and • contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent liabilities for goods and services provided to the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to (f) the ability to measure reliably the expenditure attributable to the intangible asset during its development. make future payments in respect of the purchase of those goods and services; and Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred. • statutory payables, such as goods and services tax and fringe benefits tax payables. ContractualIntangible assets payables are measured are classified at cost as financial less accumulated instruments amortisation and categorised and impairment, as financial andliabilities are amortised at amortised on a cost. straight-line Statutory basis payables over their are recogniseduseful lives andas follows: measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract. 2013 2012 ProvisionsCapitalised software development cost (years) 10 3-5 Notes to Provisionsthe Financial are recognised Statements when the - AdvanceInstitute has TAFE a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can beGoodwill measured reliably. for the yearGoodwill ended 31 and December goodwill 2013 on acquisition is initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the entity exceeds the fair valued attributed to its net assets at date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying acquisition of associates is included in investments in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated NOTE 1 amount is the present value of those cash flows. impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Employee benefits StatementLicenceThe of significantcalculation ofaccounting employee benefitspolicies includes all relevant on-costs and are calculated as follows at reporting date. Licence cost associated with the Optical Fibre Wide Area Network (WAN) arePage initially 14 of recorded53 at cost and amortised on a straight line basis over the period of the (i)relevant Wages contractand salaries, which and isannual 20 years. leave Licence intangibles are subsequently carried at cost less accumulated amortisation and impairment losses. Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulated sick leave expected to be wholly settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee services up to the reporting date, classified as current liabilities and measured at their nominal values. 1.13 Liabilities Liabilities that are not expected to be wholly settled within 12 months of the reporting date are recognised in the provision for employee benefits as current Payables liabilities, measured at present value of the amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the Payables consist of: time of settlement. • contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent (ii) Long service leave liabilities for goods and services provided to the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to makeLiability future for long payments service in leave respect (LSL) of is the recognised purchase in of the those provision goods forand employee services; andbenefits. Current Liability - unconditional LSL representing 7 years is disclosed as a current liability even when the Institute does not expect to settle the liability within 12 • statutory payables, such as goods and services tax and fringe benefits tax payables. months because it will not have the unconditional right to defer settlement of the entitlement should an employee take leave within 12 months. Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, The components of this current liability are measured at : because they do not arise from a contract. - present value - component that is not expected to be settled within 12 months. Provisions - nominal value - component that is expected to be settled within 12 months. Non-currentProvisions are liability recognised - conditional when the LSL Institute representing has a presentless than obligation, 7 years is disclosedthe future as sacrifice a non - ofcurrent economic liability. benefits There is is probable, an unconditional and the amountright to deferof the settlement provision can of thebe measured entitlement reliably. until the employee has completed the requisite years of service. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the This non-current LSL liability is measured at present value. Gain or loss following revaluation of the present value of non-current LSL liability due to changes in risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying bond interest rates is recognised as an other economic flow (refer to Note 4(b)). amount is the present value of those cash flows. (iii)Employee Termination benefits benefits TheTermination calculation benefits of employee are payable benefits when includes employment all relevant is terminated on-costs andbefore are the calculated normal asretirement follows at date, reporting or when date. an employee accepts voluntary redundancy in exchange for these benefits. The Institute recognises termination benefits when it is demonstrably committed to either terminating the employment of current Page 14 of 53 34 employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.

Employee benefits on-costs 2013_ANNUAL REPORT_FINAL.indd 34 1/05/14 3:58 PM Employee benefits on-costs ( payroll tax, workers compensation, superannuation, annual leave and long service leave accrued while on LSL taken in service) are recognised separately from provision for employee benefits. Performance Payments Performance payments for TAFE Executive Officers are based on a percentage of the annual salary package provided under the contract of employment. A liability is provided for under the term of the contracts at reporting date and paid out in the next financial year.

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

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

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

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

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

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

1.17 Materiality In accordance with Accounting Standard AASB1031 'Materiality', accounting policies need only be identified in the summary of accounting policies where they are considered 'material'. Accounting policies will be considered material if their omission, misstatement or non-disclosure has the potential, individually or collectively, to: (a ) influence the economic decisions of users taken on the basis of the financial report; and (b) affect the discharge of accountability by the management or governing body of the entity.

Page 15 of 53 Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 1

Statement of significant accounting policies

(i) Wages and salaries, and annual leave Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulated sick leave expected to be wholly settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee services up to the reporting date, classified as current liabilities and measured at their nominal values. Liabilities that are not expected to be wholly settled within 12 months of the reporting date are recognised in the provision for employee benefits as current liabilities, measured at present value of the amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement. (ii) Long service leave Liability for long service leave (LSL) is recognised in the provision for employee benefits. Current Liability - unconditional LSL representing 7 years is disclosed as a current liability even when the Institute does not expect to settle the liability within 12 months because it will not have the unconditional right to defer settlement of the entitlement should an employee take leave within 12 months.

Notes to Thethe components Financial of Statements this current liability - Advance are measured TAFE at : NOTES TO THE FINANCIAL STATEMENT - present value - component that is not expected to be settled within 12 months. FOR THE YEAR ENDED 31 DECEMBER 2013 for the year ended 31 December 2013 - nominal value - component that is expected to be settled within 12 months. Non-current liability - conditional LSL representing less than 7 years is disclosed as a non - current liability. There is an unconditional right to defer settlement of NOTE 1 the entitlement until the employee has completed the requisite years of service. This non-current LSL liability is measured at present value. Gain or loss following revaluation of the present value of non-current LSL liability due to changes in Statementbond of significant interest rates accounting is recognised policies as an other economic flow (refer to Note 4(b)).

(iii) Termination benefits Revaluations of non-current physical assets Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in Non-current physical assets measured at fair value are revalued in accordance with FRDs issued by the Minister for Finance. This revaluation process normally exchange for these benefits. The Institute recognises termination benefits when it is demonstrably committed to either terminating the employment of current occurs every five years, based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage changes in values. Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value. voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.

Revaluation increases are credited directly to equity in the revaluation reserve, except to the extent that an increase reverses a revaluation decrease in respect of thatEmployee class of benefits property, on-costs plant and equipment, previously recognised as an expense (other economic flows) in the net result, the increase is recognised as income (otherEmployee economic benefits flows) on-costs in determining ( payroll tax, the workers net result. compensation, superannuation, annual leave and long service leave accrued while on LSL taken in service) are Revaluationrecognised separately decreases fromare recognised provision forimmediately employee asbenefits. expenses (other economic flows) in the net result, except to the extent that a credit balance exists in the revaluation reserve in respect of the same class of property, plant and equipment, they are debited to the revaluation reserve. Performance Payments Performance payments for TAFE Executive Officers are based on a percentage of the annual salary package provided under the contract of employment. A liability Revaluationis provided for increases under the and term revaluation of the contracts decreases at relating reporting to dateindividual and paid assets out within in the a next class financial of property, year. plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes. RevaluationFinancial liabilities reserves are not normally transferred to accumulated funds on de-recognition of the relevant asset. Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Derecognition of financial liabilities Non-current physical assets constructed by the Institute A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. The cost of non-current assets constructed by the Institute includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportionWhen an existing of variable financial and liabilityfixed overheads. is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are Biologicalsubstantially assets modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference Bloodstockin the respective carrying amounts is recognised as an ‘other economic flow’ in the estimated consolidated comprehensive operating statement. Bloodstock is measured at fair value less estimated point of sale costs. IntangiblesOnerous Contracts Internally-generatedAn onerous contract intangible is considered assets to exist where the Institute has a contract under which the unavoidable cost of meeting the contractual obligations exceed the Aneconomic internally-generated benefits estimated intangible to be assetreceived. arising Present from developmentobligations arising (or from under the onerous development contracts phase are of recognised an internal as project) a provision is recognised to the extent if, and that only the if, present all of the followingobligation are exceeds demonstrated: the economic benefits estimated to be received (a) the technical feasibility of completing the intangible asset so that it will be available for use or sale; 1.14 (b)Commitments the intention to complete the intangible asset and use or sell it; (c)Commitments the ability to include use or thosesell the operating, asset; capital and other outsourcing commitments arising from non-cancellable contractual or statutory sources and are (d)disclosed how the at intangibletheir nominal asset value will andgenerate inclusive probable of the future GST payable. economic benefits; (e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and 1.15 Contingent assets and contingent liabilities (f)Contingent the ability assets to measure and contingent reliably the liabilities expenditure are not attributable recognised toin the intangiblebalance sheet, asset but during are disclosedits development. by way of a note (refer note 19) and, if quantifiable, are Wheremeasured no internally-generatedat nominal value. Contingent intangible assets asset and can liabilities be recognised, are presented development inclusive expenditure of the GST is receivablerecognised or as payable an expense respectively. in the period as incurred.

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

1.16 Equity 2013 2012 Contributed capital Capitalised software development cost (years) 10 3-5 Funding that is in the nature of contributions by the State government are treated as contributed capital when designated in accordance with UIG Interpretation 1038 Contribution by Owners Made to Wholly-Owned Public Sector Entities. Commonwealth capital funds are not affected and are treated as income. Goodwill Goodwill and goodwill on acquisition is initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair valued attributed to its net assets at date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on 1.17Notes to acquisitionMaterialitythe Financial of associates Statements is included - Advancein investments TAFE in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated for the year ended 31 December 2013 impairmentIn accordance losses. with GainsAccounting and losses Standard on the AASB1031 disposal 'Materiality',of an entity include accounting the carryingpolicies needamount only of be goodwill identified relating in the to summary the entity of sold. accounting policies where they are considered 'material'. Accounting policies will be considered material if their omission, misstatement or non-disclosure has the potential, individually or NOTE 1 Licencecollectively, to: Licence(a ) influence cost associated the economic with decisions the Optical of usersFibre Widetaken Areaon the Network basis of (WAN) the financial are initially report; recorded and at cost and amortised on a straight line basis over the period of the relevant contract which is 20 years. Licence intangibles are subsequently carried at cost less accumulated amortisation and impairment losses. Statement(b) of affect significant the discharge accounting of accountability policies by the management or governing body of the entity.

Page 15 of 53 1.18 Rounding of amounts 1.13 LiabilitiesAmounts in the financial report have been rounded to the nearest thousand dollars, unless otherwise stated. Payables Payables consist of: 1.19 Comparative information • contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. liabilities for goods and services provided to the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to make future payments in respect of the purchase of those goods and services; and 1.20 •Change statutory in payables,accounting such policy as goods and services tax and fringe benefits tax payables. ContractualAASB 13 Fair payables Value Measurement are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, becauseThe Institute they hasdo notapplied arise AASB from 13a contract. Fair Value Measurement for the first time in the current year. AASB 13 establishes a single source of guidance for fair value measurements. The scope of AASB 13 is broad; the fair value measurement requirements of AASB 13 apply to both financial instrument items and non-financial Provisions instrument items for which other A-IFRS require or permit fair value measurements and disclosures about fair value measurements, except for share-based Provisions are recognised when the Institute has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can payment transactions that are within the scope of AASB 2 Share-based Payment, leasing transactions that are within the scope of AASB 17 Leases, and be measured reliably. measurements that have some similarities to fair value but not fair value (e.g. net realisable value for the purposes of measuring inventories or value in use for Theimpairment amount assessmentrecognised aspurposes). a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amountAASB 13 isdefines the present fair value value as of the those price cash that flows. would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most Employeeadvantageous) benefits market at the measurement date under current market conditions. Fair value under AASB 13 is an exit price regardless of whether that price is Thedirectly calculation observable of employee or estimated benefits using includes another all valuation relevant technique. on-costs and Also, are AASB calculated 13 includes as follows extensive at reporting disclosure date. requirements. Page 14 of 53 AASB 13 requires prospective application from 1 January 2013. In addition, specific transitional provisions were given to entities such that they need not apply the 35 disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, the Institute has not made any new disclosures required by AASB 13 for the 2012 comparative period (please see note 9 and 27 disclosures). Other than the additional disclosures, the application of AASB 13 has not had any material impact on the amounts recognised in the financial 2013_ANNUAL REPORT_FINAL.inddstatements. 35 1/05/14 3:58 PM

AASB 119 Employee benefits

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

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

1.21 New and revised AASBs in issue but not yet effective Certain new accounting standards and interpretations have been published that are not mandatory for the 31 December 2013 reporting period. As at 31 December 2013 the following standards and interpretations (applicable to the Institute) had been issued but were not mandatory for financial year ending 31 December 2013. The Institute has not, and does not intend to, adopt these standards early.

Standard/Interpretation Summary Application Impact on entity financial statements date of standard AASB 9 Financial Instruments This standard simplifies requirements for the classification 1 Jan 2015 Subject to AASB’s further modifications to AASB 9, together and measurement of financial assets resulting from Phase with the anticipated changes resulting from the staged 1 of the IASB’s project to replace IAS 39 Financial projects on impairments and hedge accounting, details of Instruments: Recognition and Measurement (AASB 139 impacts will be assessed. Financial Instruments: Recognition and Measurement).

AASB 1053 Application of Tiers of These standards set out the tiers of financial reporting 1 Jan 2014 The Victorian Government is currently Australian Accounting Standards and AASB and the reduced disclosure framework. considering the impacts of Reduced 2010-2 Amendments to Australian Disclosure Requirements (RDRs) for certain Accounts Standard arising from Reduced public sector entities, and has not decided Disclosure Requirements if RDRs will be implemented in the Victorian public sector.

AASB 1055 Budgetary AASB 1055 extends the scope of budgetary 1 Jan 2014 This Standard is not applicable as no Reporting reporting that is currently applicable for the budget disclosure is required. whole of government and general government sector (GGS) to NFP entities within the GGS, provided that these entities present separate budget to the parliament.

Page 16 of 53 Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 1

NOTESStatementNotes to theof significant TOFinancial THE accounting Statements FINANCIAL policies - Advance TAFE STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013 for the year ended 31 December 2013 1.18 Rounding of amounts Amounts in the financial report have been rounded to the nearest thousand dollars, unless otherwise stated. NOTE 1 1.19 Comparative information StatementWhen of significant required byaccounting Accounting policies Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

Revaluations of non-current physical assets 1.20 ChangeNon-current in accounting physical assets policy measured at fair value are revalued in accordance with FRDs issued by the Minister for Finance. This revaluation process normally AASBoccurs 13 every Fair fiveValue years, Measurement based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material changes in values. Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value. The Institute has applied AASB 13 Fair Value Measurement for the first time in the current year. AASB 13 establishes a single source of guidance for fair value measurements.Revaluation increases The scope are creditedof AASB directly13 is broad; to equity the fair in thevalue revaluation measurement reserve, requirements except to theof AASB extent 13 that apply an to increase both financial reverses instrument a revaluation items decrease and non-financial in respect of instrumentthat class of items property, for which plant otherand equipment, A-IFRS require previously or permit recognised fair value as measurements an expense (other and disclosureseconomic flows) about in fair the value net result, measurements, the increase except is recognised for share-based as income payment(other economic transactions flows) that in determining are within the the scope net result. of AASB 2 Share-based Payment, leasing transactions that are within the scope of AASB 17 Leases, and measurements that have some similarities to fair value but not fair value (e.g. net realisable value for the purposes of measuring inventories or value in use for Revaluation decreases are recognised immediately as expenses (other economic flows) in the net result, except to the extent that a credit balance exists in the impairment assessment purposes). revaluation reserve in respect of the same class of property, plant and equipment, they are debited to the revaluation reserve.

AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous)Revaluation increases market and at the revaluation measurement decreases date underrelating current to individual market assets conditions. within Fair a class value of underproperty, AASB plant 13 isand an equipmentexit price regardless are offset of against whether one that another price withinis directlythat class observable but are not or offsetestimated in respect using ofanother assets valuationin different technique. classes. Also, AASB 13 includes extensive disclosure requirements. Revaluation reserves are not normally transferred to accumulated funds on de-recognition of the relevant asset. AASBAny accumulated 13 requires prospectivedepreciation application at the date from of revaluation 1 January 2013.is eliminated In addition, against specific the gross transitional carrying provisions amount of were the givenasset andto entities the net such amount that isthey restated need notto the apply the disclosurerevalued amount requirements of the asset.set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, the Institute has not made any new disclosures required by AASB 13 for the 2012 comparative period (please see note 9 and 27 Non-current physical assets constructed by the Institute disclosures). Other than the additional disclosures, the application of AASB 13 has not had any material impact on the amounts recognised in the financial The cost of non-current assets constructed by the Institute includes the cost of all materials used in construction, direct labour on the project, and an appropriate statements. proportion of variable and fixed overheads. Biological assets Bloodstock AASBBloodstock 119 Employee is measured benefits at fair value less estimated point of sale costs. Intangibles In the current year, the Institute has applied AASB 119 Employee Benefits (as revised in 2011) and the related consequential amendments for the first time. Internally-generated intangible assets An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the In addition, AASB 119 also changes the definition of short-term employee benefits. This change has no impact on the Institute because the Institute has always following are demonstrated: defined short-term employee benefits as benefits expected to be settled wholly before twelve months after the end of the reporting period in which the (a) the technical feasibility of completing the intangible asset so that it will be available for use or sale; employees render the related service; and measured the provision for annual leave on a discounted basis. (b) the intention to complete the intangible asset and use or sell it; (c) the ability to use or sell the asset; 1.21 New(d) how and the revised intangible AASBs asset in will issue generate but not probable yet effective future economic benefits; Certain(e) the availability new accounting of adequate standards technical, and interpretations financial and haveother been resources published to complete that are the not development mandatory for and the to 31 use December or sell the 2013 intangible reporting asset; period. and As at 31 December 2013 the following standards and interpretations (applicable to the Institute) had been issued but were not mandatory for financial year (f) the ability to measure reliably the expenditure attributable to the intangible asset during its development. ending 31 December 2013. The Institute has not, and does not intend to, adopt these standards early. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred. Standard/Interpretation Summary Application Impact on entity financial statements Intangible assets are measured at cost less accumulated amortisation and impairment, and dateare amortised of on a straight-line basis over their useful lives as follows: standard AASB 9 Financial Instruments This standard simplifies requirements for the classification2013 1 Jan 2015 2012 Subject to AASB’s further modifications to AASB 9, together Capitalised software development cost and(years) measurement of financial assets resulting from Phase10 3-5 with the anticipated changes resulting from the staged 1 of the IASB’s project to replace IAS 39 Financial projects on impairments and hedge accounting, details of Goodwill Instruments: Recognition and Measurement (AASB 139 impacts will be assessed. Goodwill and goodwill on acquisition is Financialinitially Instruments:recorded at Recognition the amount and by Measurement). which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair valued attributed to its net assets at date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on AASBacquisition 1053 Application of associates of Tiers is included of in investmentsThese standards in associates.set out the tiers Goodwill of financial is tested reporting at least 1annually Jan 2014 for impairmentThe Victorian and Government carried at costis currently less accumulated Australianimpairment Accounting losses. GainsStandards and and losses AASB on andthe thedisposal reduced of disclosure an entity framework. include the carrying amount of goodwill relatingconsidering to the the entity impacts sold. of Reduced 2010-2 Amendments to Australian Disclosure Requirements (RDRs) for certain AccountsLicence Standard arising from Reduced public sector entities, and has not decided Disclosure Requirements if RDRs will be implemented in the Victorian Licence cost associated with the Optical Fibre Wide Area Network (WAN) are initially recorded at cost and amortised on a straight line basis over the period of the public sector. relevant contract which is 20 years. Licence intangibles are subsequently carried at cost less accumulated amortisation and impairment losses. AASB 1055 Budgetary AASB 1055 extends the scope of budgetary 1 Jan 2014 This Standard is not applicable as no Reporting reporting that is currently applicable for the budget disclosure is required. whole of government and general government 1.13 Liabilities sector (GGS) to NFP entities within the GGS, Payables provided that these entities present separate Payables consist of: budget to the parliament. • contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent liabilities for goods and services provided to the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to make future payments in respect of the purchase of those goods and services; and • statutory payables, such as goods and services tax and fringe benefits tax payables. Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract. Provisions Provisions are recognised when the Institute has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. Page 16 of 53 The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. Employee benefits The calculation of employee benefits includes all relevant on-costs and are calculated as follows at reporting date. 36 Page 14 of 53

2013_ANNUAL REPORT_FINAL.indd 36 1/05/14 3:58 PM NotesNotes to to the the Financial Financial Statements Statements - -Advance Advance TAFE TAFE NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013 forfor the the year year ended ended 31 31 December December 2013 2013

NOTENOTE 1 1

StatementStatement of of significant significant accounting accounting policies policies

InRevaluations addition to of the non-current new standards physical above, assets the AASB has issued a list of amending standards that are not effective for the 2013 reporting period (as listed below). In general,Non-current these physical amending assets standards measured include at fair editorial value areand revalued references in accordance changes that with are FRDs expected issued to by have the insignificantMinister for Finance.impacts onThis public revaluation sector reporting.process normally The two AASBoccurs Interpretations every five years, in the based list uponbelow the are asset’s also not Government effective for Purpose the 2013 Classification, reporting period but may and occur considered more frequently to have insignificant if fair value impacts assessments on public indicate sector material reporting. • changesAASB 2011-13 in values. Amendments Revaluation to increases Australian or Accounting decreases ariseStandard from -differences Improvements between to AASB an asset’s 1049 carrying value and fair value. • AASB 2010-10 Further Amendments to Australian Accounting Standards – Removal of Fixed Dates for First-time Adopters. • RevaluationAASB 2011-2 increases Amendments are credited to Australian directly Accounting to equity in Standards the revaluation arising reserve,from the except Trans-Tasman to the extent Convergence that an increase Project –reverses Reduced a revaluationDisclosure Requirements. decrease in respect of • thatAASB class 2011-3 of property, Amendments plant toand Australian equipment, Accounting previously Standards recognised - Orderly as an expense adoption (other of Changes economic to the flows) ABS in GFS the Manual net result, and the Related increase Amendments is recognised as income • (otherAASB 2011-4economic Amendments flows) in determining to Australian the Accounting net result. Standards to Remove Individual Key Management Personnel Disclosure Requirements. • RevaluationAASB 2011-6 decreases Amendments are recognised to Australian immediately Accounting as Standardsexpenses (other– Extending economic Relief flows) from in Consolidation, the net result, the except Equity to Methodthe extent and that Proportionate a credit balance Consolidation exists in the – Reducedrevaluation Disclosure reserve Requirements. in respect of the same class of property, plant and equipment, they are debited to the revaluation reserve. • AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards. • RevaluationAASB 2011-8 increases Amendments and revaluation to Australian decreases Accounting relating Standards to individual arising assets from AASBwithin 13. a class of property, plant and equipment are offset against one another within • thatAASB class 2011-9 but Amendmentsare not offset toin respectAustralian of assetsAccounting in different Standards classes. - Presentation of Other Comprehensive Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039,Revaluation 1049] reserves are not normally transferred to accumulated funds on de-recognition of the relevant asset. • AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011). Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the • AASB 2011-11 Amendments to AASB 119 (September 2011) arising from Reduced Disclosure Requirements. revalued amount of the asset. • AASB 2011-12 Amendments to Australian Accounting Standards arising from Interpretation 20 • Non-current2012-1 Amendments physical assets to Australianconstructed Accounting by the Institute Standards – Fair Value Measurement – Reduced Disclosure Requirements. • The2012-2 cost Amendments of non-current to assets Australian constructed Accounting by the Standards Institute – includes Disclosures the –cost Offsetting of all materials Financial used Assets in construction, and Financial direct Liabilities. labour on the project, and an appropriate • proportion2012-3 Amendments of variable to and Australian fixed overheads. Accounting Standards – Offsetting Financial Assets and Financial Liabilities. • Biological2012-5 Amendments assets to Australian Accounting Standards arising from Annual Improvements 2009–2011 Cycle. • Bloodstock2012-7 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements. • Bloodstock2013-1 Amendments is measured to atAASB fair value1049 -less Relocation estimated of pointBudgetary of sale Reporting costs. Requirements • 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non Financial Assets Intangibles • Internally-generatedInterpretation 21 Levies intangible assets An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are demonstrated: (a) the technical feasibility of completing the intangible asset so that it will be available for use or sale; 1.22 Critical(b) the accountingintention to completejudgements the intangible and key sourcesasset and of use estimation or sell it; uncertainty (c) the ability to use or sell the asset; In(d) the how application the intangible of the asset Institute’s will generate accounting probable policies, future economic judgements, benefits; estimates and assumption about the carrying amounts of assets and liabilities must(e) the be availability made. The of estimatesadequate technical, and associated financial assumptions and other resources are based to complete on historical the development experience and and to other use or factors sell the that intangible are considered asset; and to be relevant. Actual results may differ from these estimates. (f) the ability to measure reliably the expenditure attributable to the intangible asset during its development. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in whichIntangible the estimateassets are ismeasured revised ifat thecost revision less accumulated affects only amortisation that period, and impairment,or in the period and are of theamortised revision on anda straight-line future periods basis over if the their revision useful affectslives as follows:both current and future periods. 2013 2012 KeyCapitalised sources software of estimation development uncertainty cost (years) 10 3-5 The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, thatGoodwill have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Goodwill and goodwill on acquisition is initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair valued attributed to its net assets at date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on Fair value measurements and valuation processes acquisition of associates is included in investments in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated Someimpairment of the losses.Institute’s Gains assets and losses and onliabilities the disposal are measured of an entity at include fair value the carrying for financial amount reporting of goodwill purposes. relating toIn theestimating entity sold. the fair value of an asset or a liability the Institute uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Institute engages third partyLicence qualified valuers to perform the valuation. Licence cost associated with the Optical Fibre Wide Area Network (WAN) are initially recorded at cost and amortised on a straight line basis over the period of the Informationrelevant contract about which the valuationis 20 years. techniques Licence intangibles and inputs are subsequently used in determining carried at thecost fairless valueaccumulated of various amortisation assets and and liabilities impairment is summarised losses. below and at notes 9 and 27.

1.13 InLiabilities addition, the following table provides an analysis of assets and liabilities that are measured subsequent to initial recognition at fair value, grouped into Levels 1 toPayables 3 based on the degree to which the fair value is observable. Payables• consistLevel 1 of: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. • contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent liabilities• forLevel goods 2 fair and value services measurements provided to are the those Institute derived prior from to the inputs end ofother the thanfinancial quoted year prices that are included unpaid, within and arise Level when 1 that the are Institute observable becomes for the obliged asset orto make futureliability, payments either in directlyrespect (i.e.of the as purchaseprices) or of indirectly those goods (i.e. derivedand services; from andprices). • statutory• Level payables, 3 fair suchvalue as measurements goods and services are those tax and derived fringe from benefits valuation tax payables. techniques that include inputs for the asset or liability that are not based on Contractualobservable payables aremarket classified data (unobservableas financial instruments inputs). and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, Assets / because they do not arise from a contract. Relationship of Liabilities Significant Fair Value Valuation Technique(s) and key unobservable measuredProvisions Fair Value as at unobservable Hierarchy assumptions inputs to fair Provisionsat fair are recognised when the Institute has a present obligation, the future sacrifice of economicinput(s) benefits is probable, and the amount of the provision can value bevalue measured reliably. The amount31/12/2013 recognised as31/12/2012 a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and1 uncertaintiesAssets- surroundingAssets- theLevel obligation. 1 Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. Quoted bid prices (unadjusted) in an $AUD $AUD active market for identical assets or NA NA Employee benefits liabilities that the entity can access at Liabilities - Liabilities - The calculation of employee benefits includes all relevantthe measurement on-costs and date. are calculated as follows at reporting date. $AUD $AUD Page 14 of 53 Page 17 of 53 37

2013_ANNUAL REPORT_FINAL.indd 37 1/05/14 3:58 PM Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013 Notes to the Financial Statements - Advance TAFE NOTEfor the 1 year ended 31 December 2013

StatementNOTE 1 of significant accounting policies

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

1.22 Critical accounting judgements and key sources of estimation uncertainty 1.23 Critical accounting judgements and key sources of estimation uncertainty In the application of the Institute’s accounting policies, judgements, estimates and assumption about the carrying amounts of assets and liabilities mustIn the be application made. The of estimates the Institute’s and associated accounting assumptions policies, judgements, are based estimates on historical and experience assumption and about other the factors carrying that amounts are considered of assets to and be liabilities relevant. Actualmust beresults made. may The differ estimates from theseand associated estimates. assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in whichThe estimates the estimate and underlyingis revised if assumptions the revision affectsare reviewed only that on anperiod, ongoing or in basis. the period Revisions of the to accountingrevision and estimates future periods are recognised if the revision in the affects period both in currentwhich theand estimate future periods. is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Key sources of estimation uncertainty TheKey following sources of are estimation the key assumptions uncertainty concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, thatThe have following a significant are the riskkey assumptionsof causing a material concerning adjustment the future, to andthe othercarrying key amounts sources of estimationassets and liabilitiesuncertainty within at the the end next of financialthe reporting year. period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. NOTESNotes toFair the value TOFinancial measurements THE Statements FINANCIAL and valuation- Advance processes TAFE STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013 for the yearSome Fairended value of 31 the December measurements Institute’s 2013 assets and and valuation liabilities processes are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liabilitySome ofthe the Institute Institute’s uses assets market-observable and liabilities are data measured to the extent at fair it value is available. for financial Where reporting Level 1 inputspurposes. are Innot estimating available, the the fair Institute value ofengages an asset third or a partyliability qualified the Institute valuers uses to perform market-observable the valuation. data to the extent it is available. Where Level 1 inputs are not available, the Institute engages third NOTE 1 party qualified valuers to perform the valuation. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities is summarised below and Statementat Informationof notes significant 9 and about 27.accounting the valuation policies techniques and inputs used in determining the fair value of various assets and liabilities is summarised below and at notes 9 and 27. InRevaluations addition, theof non-current following tablephysical provides assets an analysis of assets and liabilities that are measured subsequent to initial recognition at fair value, grouped into Levels 1 toNon-currentIn 3 addition, based on thephysical the following degree assets to table measuredwhich provides the fairat anfair value analysis value is observable.are of revaluedassets and in liabilities accordance that with are FRDsmeasured issued subsequent by the Minister to initial for Finance.recognition This at revaluation fair value, groupedprocess normallyinto Levels 1 occursto 3• based every Levelon five the 1years, degreefair value based to measurementswhich upon the the fair asset’s value are Government those is observable. derived Purpose from quoted Classification, prices (unadjusted) but may occur in moreactive frequently markets for if fairidentical value assetsassessments or liabilities. indicate material changes• in values.Level 1 Revaluation fair value measurements increases or decreases are those arise derived from from differences quoted pricesbetween (unadjusted) an asset’s incarrying active marketsvalue and for fair identical value. assets or liabilities. • Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or Revaluation increases are credited directly to equity in the revaluation reserve, except to the extent that an increase reverses a revaluation decrease in respect of • liability,Level 2 faireither value directly measurements (i.e. as prices) are thoseor indirectly derived (i.e. from derived inputs from other prices). than quoted prices included within Level 1 that are observable for the asset or that class of property, plant and equipment, previously recognised as an expense (other economic flows) in the net result, the increase is recognised as income • Levelliability, 3 fair either value directly measurements (i.e. as prices) are those or indirectly derived (i.e. from derived valuation from techniques prices). that include inputs for the asset or liability that are not based on (other economic flows) in determining the net result. • observableLevel 3 fair market value measurements data (unobservable are those inputs). derived from valuation techniques that include inputs for the asset or liability that are not based on Revaluation observabledecreases are market recognised data (unobservable immediately asinputs). expenses (other economic flows) in the net result, except to the extent that a credit balance exists in the revaluation reserve in respect of the same class of property, plant and equipment, they are debited to the revaluation reserve. Assets / Assets / Relationship of Liabilities Significant Relationship of RevaluationLiabilities increases and revaluation decreasesFair Value relating Valuation to individual Technique(s) assets within and akey class of property,Significant plant unobservableand equipment are offset against one another within measured Fair Value as at Fair Value Valuation Technique(s) and key unobservable unobservable Notes to the Financial Statementsthatmeasured class but are- Advance notFair offsetValue inas TAFE respect at of Hierarchyassets in different classes.assumptions unobservable inputs to fair at fair Hierarchy assumptions input(s) inputs to fair for the year ended 31 December Revaluation2013at fair reserves are not normally transferred to accumulated funds on de-recognition of theinput(s) relevant asset. value value value Anyvalue accumulated31/12/2013 depreciation31/12/2012 at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the NOTE 1 Notes torevalued the Financial 1amountAssets-31/12/2013 of Statements the asset.Assets-31/12/2012 - AdvanceLevel 1 TAFE for the year ended 311 DecemberAssets- 2013Assets- Level 1 Quoted bid prices (unadjusted) in an Non-current $AUDphysical assets constructed$AUD by the Institute Quoted bid prices (unadjusted) in an $AUD $AUD active market for identical assets or Statement of significant accountingThe cost policiesof non-current assets constructed by the Instituteactive includes market forthe identical cost of all assets materials or NAused in construction,NA direct labour on the project, and an appropriate liabilities that the entity can access at NA NA NOTE 1 proportion Liabilitiesof variable - andLiabilities fixed overheads. - liabilities that the entity can access at Liabilities - Liabilities - the measurement date. 2 Assets- BiologicalAssets- assets$AUD Level$AUD 2 the measurement date. Statement of significant$AUD accounting$AUD policiesDiscounted cash flow. Future cash $AUD Bloodstock$AUD Page 17 of 53 flows are estimated based on Bloodstock is measured at fair value less estimated point of sale costs. 2 Assets- Assets- forwardLevel exchange 2 rates (from Page 17 of 53 Liabilities Intangibles- Liabilities - Discounted cash flow. Future cash $AUD $AUD observable forward exchange rates $AUD Internally-generated$AUD intangible assets flows are estimated basedNA on NA at the end of the forwardreporting exchange period) rates (from An internally-generatedLiabilities - intangibleLiabilities asset - arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the and contract forwardobservable rates, forward exchange rates following are$AUD demonstrated:$AUD NA NA at the end of the reporting period) (a) the technical feasibility of completingdiscounted the intangible at a rate asset that so reflects that it willthe be available for use or sale; and contract forward rates, (b) the intention to complete the intangiblecredit risk asset of various and use counterparties. or sell it; discounted at a rate that reflects the (c) the ability to use or sell the asset; credit risk of various counterparties. (d) how the intangible asset will generate probable future economic benefits; (e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and Depreciated replacement cost as applied to non-specialised assets. (f) the ability to measure reliably the expenditure attributableDepreciated to the replacement intangible costasset as during its development. Where no internally-generated intangible asset can beapplied recognised, to non-specialised development assets. expenditure is recognised as an expense in the period as incurred. 3 Assets- Assets- Level 3 Specialised Intangible assets are measured at cost less accumulated amortisation and impairment, and are Theamortised higher on the a straight-line basis over their useful lives as follows: $AUD $AUD3 Assets- Assets- Level 3 assets, Specialised constructionThe higher the $AUD $AUD assets, estimates construction Depreciated replacement cost. 2013 estimatescost, the 2012 Depreciated replacementmade cost. on cost, the Capitalised software development cost (years) 10 madehigher on the 3-5 fair Liabilities - Liabilities - replacement higher the fair Liabilities - Liabilities - replacementvalue. $AUD $AUD cost of asset value. Goodwill $AUD $AUD cost of asset Goodwill and goodwill on acquisition is initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled Details of Institute’s landentityDetails and exceeds of buildings Institute’s the fair and land valued information and attributedbuildings about and to its information the net recurringassets aboutat date fair the ofvalue recurringacquisition. measurement fair Goodwill value measurement hierarchy on acquisition as hierarchyat of 31 subsidiaries December as at 31 is December2013 included are inas2013 intangible follows: are as follows:assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested at least annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Level 1 LevelLevel 21 LevelLevel 2 3 LevelFair 3Value Fairas Value as Licence at 31/12/13at 31/12/13 Licence cost associated with the Optical Fibre Wide Area Network (WAN) are initially recorded at cost and amortised on a straight line basis over the period of the 2013 AUD 2013'000 AUDAUD '000 '000 AUDAUD '000 '000 AUD '000AUD '000 AUD '000 relevant contract which is 20 years. Licence intangibles are subsequently carried at cost less accumulated amortisation and impairment losses.

Freehold land 1,034 1,034 Freehold land 1,034 1,034 Crown land 7,070 7,070 Crown land 7,070 7,070 1.13 Liabilities buildings used solely for Payables buildings used solely for 32,293 32,293 educational purposes 32,293 32,293 Payables consisteducational of: purposes buildings used for communal • contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent buildings used for communalpurposes

liabilities for goods and services provided to the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to purposes

make future payments in respect of the purchase of those goods and services; and • statutory payables, such as goods and services tax and fringe benefits tax payables. Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract. Provisions Provisions are recognised when the Institute has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. Employee benefits The calculation of employee benefits includes all relevant on-costs and are calculated as follows at reporting date. 38 Page 14 of 53

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Page 18 of 53

Page 18 of 53 Notes to the Financial Statements - AdvanceNOTES TAFE TO THE FINANCIAL STATEMENT for the year ended 31 December 2013 FOR THE YEAR ENDED 31 DECEMBER 2013

NOTE 2

Income from Transactions

Institute 2013 2012 2 Income from transactions $'000 $'000 (a) Grants and other transfers (other than contributions by owners) Government financial assistance (i) Government contributions - operating State government recurrent 7,634 13,164 Other contributions by State Government 1,484 836 Total government contributions - operating 9,118 14,000

(ii) Government contributions - capital Commonwealth capital - 1,060 State capital 600 2,478 Total government contributions - capital 600 3,538 Total government financial assistance 9,718 17,538

(b) Sales of goods and services Student fees and charges 2,933 2,033 Rendering of services Fee for service - Government 2,946 1,156 Fee for service - other 1,037 3,992 Total rendering of services 3,983 5,148

Other non-course fees and charges Sale of goods 825 521 Total other fees and charges 825 521 Total revenue from sale of goods and services 7,741 7,702

(c) Interest Interest from financial assets not at fair value through P/L: Interest on bank deposits 30 135 Total interest from financial assets not at fair value through P/L 30 135

Interest from financial assets at fair value through P/L: Interest from debt securities 103 134 Total interest from financial assets at fair value through P/L 103 134

Net interest income 133 269

(d) Other income Rental income: Hire of campuses and accommodation units - 25 Total rental income - 25

Other revenue 191 498 Total other income 191 523

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C:\Users\bbarker\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\DVYMQQ2Y\Book3 28/03/2014 1:56 PM NOTESNotes to the TO Financial THE FINANCIAL Statements - Advance STATEMENT TAFE FORfor the THE year YEAR ended ENDED 31 December 31 DECEMBER 2013 2013

NOTE 3

Expenses from transactions

Institute 2013 2012 3 Expenses from transactions $'000 $'000 (a) Employee expenses Salaries, wages, overtime and allowances 12,127 14,813 Superannuation 1,243 1,317 Payroll tax 740 781 Worker's compensation 138 112 Long service leave 218 252 Annual leave 127 154 Termination benefits 145 612 Casual, consulting and other staff costs 1,916 142 Total employee expenses 16,654 18,183

(b) Depreciation and amortisation Depreciation of non-current assets Buildings 942 1,114 Plant and equipment 849 884 Motor vehicles 165 182 Library collections 160 160 Land improvements 50 - Furniture & Fittings 6 6 Total depreciation 2,172 2,346

Amortisation of non-current physical and intangible assets Leasehold improvements 13 6 WAN Optiv Fibre Licence 32 32 Total amortisation 45 38 Total depreciation and amortisation 2,217 2,384

(c) Grants and other transfers (other than contributions by owners) Grants and subsidies apprentices and trainees 18 23 Total grants and other transfers 18 23

(d) Supplies and Services Purchase of supplies and consumables 985 1,136 Communication expenses 221 369 Contract and other services 719 993 Bad debts on sale of goods and services 667 - Cost of goods sold/distributed (ancillary trading) 167 238 Building repairs and maintenance 477 470 Fees and charges 491 295 Total supplies and services 3,727 3,501

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P:\My Documents\Book5 28/03/2014 3:35 PM Notes to the Financial Statements - Advance TAFENOTES TO THE FINANCIAL STATEMENT for the year ended 31 December 2013 FOR THE YEAR ENDED 31 DECEMBER 2013

NOTE 3

Expenses from transactions

Institute 2013 2012 3 Expenses from transactions $'000 $'000

(e) Other Expenses General Expenses Marketing and promotional expenses 187 283 Occupancy expenses 555 473 Audit fees and services 47 67 Staff development 138 125 Travel and motor vehicle expenses 364 451 Motor vehicle taxes 62 32 Other expenses 420 323 Interest write off on CDOs - 320 Total general expenses 1,773 2,074

Operating lease rental expenses: Minimum lease payments 14 206 Total operating lease rental expenses 14 206 Subtotal 1,787 2,280

Equipment below capitalisation threshold 386 508 Total other operating expenses 2,173 2,788 (f) Goodwill and Capitalised costs written off Cafe Rossi goodwill written off 55 - Port of Sale capitalised costs written off 2,059 - Total goodwill and capitalised costs written off 2,114 -

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P:\My Documents\Book5 28/03/2014 3:35 PM NOTESNotes to the TO Financial THE Statements FINANCIAL - Advance STATEMENT TAFE FORfor the THE year YEAR ended ENDED31 December 31 DECEMBER 2013 2013

NOTE 4

Other economic flows included in net result

Institute 2013 2012 4 Other economic flows included in net result $'000 $'000 (a) Net gain/(loss) on non-financial assets (including PPE and intangible assets) Net gain/(loss) on disposal of physical assets 78 (2) Total net gain/(loss) on non-financial assets and liabilities 78 (2)

(b) Other gains/(losses) from other economic flows Net gain/(loss) arising from revaluation of long service leave liability (17) (25) Total other gains/(losses) from other economic flows (17) (25)

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

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

NOTE 5

Cash and cash equivalents

Institute 2013 2012 5 Cash and deposits $'000 $'000 Cash at bank and on hand 963 1,998 Deposits - at call with TCV 1,000 - Total cash and cash equivalents 1,963 1,998

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

Institute 2013 2012 (a) Reconciliation to cash at the end of the year $'000 $'000 Balances as above 1,963 1,998 Balance as per cashflow statement 1,963 1,998

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

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V:\Finance1\Reporting\Annual reports\2013\Framework\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) FINAL_2103 24/03/2014 11:00 AM Notes to the Financial Statements - Advance TAFENOTES TO THE FINANCIAL STATEMENT for the year ended 31 December 2013 FOR THE YEAR ENDED 31 DECEMBER 2013

NOTE 6

Receivables

Institute

2013 2012 6 Receivables $'000 $'000 Current receivables Contractual Trade receivables1 1,307 852 Provision for doubtful contractual receivables(a) (See also Note 6(a) below) (700) (49) Revenue receivable - 18 Total contractual 607 821

Statutory Amounts owing from Victorian Government 248 1,092 GST receivable from ATO 41 52 Total statutory 289 1,144 Total current receivables 896 1,965

Total receivables 896 1,965

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

Institute 2013 2012 (a) Movement in the provision for doubtful contractual receivables $'000 $'000 Balance at beginning of the year 49 20 Increase in provision recognised in the net result 651 29 Balance at end of the year 700 49

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

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

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2013_ANNUAL REPORT_FINAL.indd 43 1/05/14 3:58 PM NOTESNotes to theTO Financial THE FINANCIAL Statements - Advance STATEMENT TAFE FORfor the THE year YEAR ended ENDED 31 December 31 DECEMBER 2013 2013

NOTE 7

Investments, loans and other financial assets

Institute 2013 2012 7 Investments and other financial assets $'000 $'000

Fixed Interest Term Deposits with TCV - 4,500 Total current investments and other financial assets - 4,500

Non-current investments and other financial assets Debt securities: Collateralised Debt Obligations - 1,938 Total debt securities - 1,938

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

Total investments and other financial assets - 6,438

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

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

Notes toPlease the referFinancial to Note Statements27 for the nature - Advanceand extent ofTAFE risks arising from investments, loans and other financial assets. for the year ended 31 December 2013

NOTE 8

Inventories

Institute 2013 2012 8 Inventories $'000 $'000 Current List type of inventories held Supplies and consumables - at cost 21 43 Raw materials - at cost 56 56 Finished goods - at cost 12 - Inventories held-for-sale: at cost 59 65 Total current inventories 148 164

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V:\Finance1\Reporting\Annual reports\2013\Framework\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) FINAL_2103 21/03/2014 3:37 PM Notes to the Financial Statements - Advance TAFE NOTES TO THE FINANCIAL STATEMENT for the year ended 31 December 2013 FOR THE YEAR ENDED 31 DECEMBER 2013

Notes to the Financial Statements - Advance TAFE NOTEfor the year 9ended 31 December 2013

NOTE 9 Property, plant and equipment Property, plant and equipment

Land Construction in Plant & Motor Leasehold Furniture & Land Buildings Library Total Improvements progress Equipment LandVehicles Improvements Fittings Construction in Plant & Motor Leasehold Furniture & Land Buildings Library Total Institute $'000 $'000 $'000 $'000 $'000Improvements$'000 $'000 $'000 progress$'000 $'000Equipment Vehicles Improvements Fittings At 1 January 2012 InstituteCost - - - $'000 - - $'000 - $'000 - - $'000 733 733$'000 $'000 $'000 $'000 $'000 $'000 Valuation 8,778 - 44,045 1,282 10,492 1,642 300 167 - 66,706 AtAccumulated 1 January depreciation 2012 - - (7,093) - (6,549) (913) (24) (143) (161) (14,883) Net bookCost amount 8,778 - 36,952 1,282 - 3,943 - 729 276 - 24 572 - 52,556 - - - - 733 733 Year endedValuation 31 December 2012 8,778 - 44,045 1,282 10,492 1,642 300 167 - 66,706 Opening net book amount 8,778 - 36,952 1,282 3,943 729 276 24 572 52,556 AdditionsAccumulated depreciation 1,074 - 351 1,742 - 314 - 130 - (7,093) - 1 - 3,612 (6,549) (913) (24) (143) (161) (14,883) Disposals - - - - (17) (63) - - - (80) Net revaluationNet book increments/ amount decrements 126 109 (3,064) 8,778 - - - - 936,952 - 1,282 - (2,820) 3,943 729 276 24 572 52,556 Transfer to assets classified as held-for-sale ------YearImpairment ended loss charged 31 December to net result 2012 ------Depreciation expense & amortisation expense - - (1,114) - (884) (182) (6) (6) (160) (2,352) ExchangeOpening differences net book amount - - - 8,778 - - - - - 36,952 - 1,282 - - 3,943 729 276 24 572 52,556 Reclassification (1,874) 1,874 ------ClosingAdditions net book amount 8,104 1,983 33,125 3,024 1,074 3,356 - 614 279 351 18 1,742413 50,916 314 130 - - 1 3,612

At 31 DecemberDisposals 2012 - - - - (17) (63) - - - (80) CostNet revaluation increments/ decrements - - - - 126 - 109 - - (3,064) - 734 - 734 - - 9 - - (2,820) Valuation 8,104 2,438 44,735 3,024 10,769 1,568 509 168 - 71,315 AccumulatedTransfer depreciation to assets classified as held-for-sale - (455) (11,610) - - (7,413) - (954) (230) - (150) (321) - (21,133) ------Net book amount 8,104 1,983 33,125 3,024 3,356 614 279 18 413 50,916 Impairment loss charged to net result ------Year ended 31 December 2013 OpeningDepreciation net book amount expense & amortisation expense 8,104 1,983 33,125 3,024 - 3,356 - 614 279 (1,114) 18 413 - 50,916 (884) (182) (6) (6) (160) (2,352) Additions - - 110 - 161 223 - - - 494 DisposalsExchange differences ------(59) - - - - - (59) ------ImpairmentReclassification loss charged to net result - - - (2,059) (1,874) - 1,874 ------(2,059) ------Depreciation & amortisation expense - (50) (942) - (849) (165) (13) (6) (160) (2,185) ExchangeClosing differences net book amount - - - 8,104 - - 1,983 - - 33,125 - 3,024 - - 3,356 614 279 18 413 50,916 Closing net book amount 8,104 1,933 32,293 965 2,668 613 266 12 253 47,107 AtAt 31 December 31 December 2013 2012 Cost ------ValuationCost 8,104 2,438 44,845 965 - 10,930 -1,732 509 - 168 734 - 70,425 - - - - 734 734 AccumulatedValuation depreciation - (505) (12,552) 8,104 - (8,262) 2,438 (1,119) (243) 44,735 (156) (481) 3,024 (23,318) 10,769 1,568 509 168 - 71,315 Net book value at the end of the financial year 8,104 1,933 32,293 965 2,668 613 266 12 253 47,107 Accumulated depreciation - (455) (11,610) - (7,413) (954) (230) (150) (321) (21,133) (a) Valuations of Property, Plant and Equipment Net book amount 8,104 1,983 33,125 3,024 3,356 614 279 18 413 50,916 Fair value assessments have been performed at 31 December 2013 for all classes of assets. This assessment demonstrated that fair value was materially similar to carrying value, and therefore a full revaluation was not required Yearthis year. ended The next scheduled31 December full revaluation 2013 for this purpose Institute will be conducted in 2017. (b) Non‑current assets pledged as security ThereOpening are no non current net assetsbook pedged amount as security 8,104 1,983 33,125 3,024 3,356 614 279 18 413 50,916 Additions - - 110 - 161 223 - - - 494 Disposals - - - - - (59) - - - (59) Impairment loss charged to net result - - - (2,059) - - - - - (2,059) Depreciation & amortisation expense - (50) (942) - (849) (165) (13) (6) (160) (2,185) Exchange differences ------Closing net book amount 8,104 1,933 32,293 965 2,668 613 266 12 253 47,107

At 31 December 2013 Cost ------Valuation 8,104 2,438 44,845 965 10,930 1,732 509 168 734 70,425 Accumulated depreciation - (505) (12,552) - (8,262) (1,119) (243) (156) (481) (23,318) Net book value at the end of the financial year 8,104 1,933 32,293 965 2,668 613 266 12 253 47,107

(a) Valuations of Property, Plant and Equipment

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

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V:\Finance1\Reporting\Annual reports\2013\Framework\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) FINAL_2103 21/03/2014 3:37 PM NOTESNotes to the TO Financial THE FINANCIAL Statements - Advance STATEMENT TAFE FORfor the THE year YEAR ended ENDED 31 December 31 DECEMBER 2013 2013

NOTE 10

Biological assets

Biological assets - animals

10 Biological assets

Institute 2013 2012 Consumable assets $'000 $'000 Mature assets Cattle 13 19 Total consumable assets 13 19

Qty Qty Quantities Cattle 24 31 Total quantity of consumable assets 24 31

Output Natural increase 11 - Total quantity of output 11 -

$'000 $'000 Fair value of output was Determined using market value 6 - Total fair value of output 6 -

Biological assets - reconciliation

Institute 2013 2012 10 Biological assets $'000 $'000 Reconciliation of changes in carrying amount of biological assets Carrying amount at 1 January 19 30 Increases due to: Births 6 - Decreases attributable to: Sales (6) (11) Other (6) - Carrying amount at 31 December 13 19

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

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NOTE 11

Intangible assets

Trademarks Goodwill Software Total & Licences Institute $’000 $’000 $’000 $’000 At 1 January 2012 Cost 55 - 645 700 Accumulated amortisation and impairment - - (103) (103) Net book amount 55 - 542 597

Year ended 31 December 2012 Opening net book amount 55 - 542 597 Amortisation charge 1 - - (32) (32) Closing net book amount 55 - 510 565

At 31 December 2012 Cost 55 - 645 700 Accumulated amortisation and impairment - - (135) (135) Net book amount 55 - 510 565

Year ended 31 December 2013 Opening net book amount 55 - 510 565 Additions - 3,736 - 3,736 Impairment losses charged to net result (55) - - (55) Amortisation charge 1 - - (32) (32) Closing net book amount - 3,736 478 4,214

At 31 December 2013 Cost 55 - 645 700 Accumulated amortisation and impairment (55) 3,736 (167) 3,514 Net book value at the end of the financial year - 3,736 478 4,214

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2013_ANNUAL REPORT_FINAL.indd 47 1/05/14 3:58 PM NOTESNotes to the TO Financial THE FINANCIAL Statements - Advance STATEMENT TAFE FORfor the THE year YEAR ended ENDED 31 December 31 DECEMBER 2013 2013

NOTE 12

Other non-financial assets

Institute 2013 2012 12 Other non-financial assets $'000 $'000 Current other non-financial assets Prepayments 143 - Total current other non-financial assets 143 -

Total other non-financial assets 143 - Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 13

Payables

Institute 2013 2012 13 Payables $'000 $'000 Current Contractual Supplies and services 413 856 Wages and salaries 117 - Amounts payable to government and agencies - 1,911 Revenue in advance 593 395 1,123 3,162 Statutory GST payable 69 147 FBT payable 5 - Total current payables 1,197 3,309

Total payables 1,197 3,309

The carrying amounts of the Institutes payables are denominated in the following currencies: Institute 2013 2012 (a) Foreign currency risk $'000 $'000 Australian Dollars 1,197 3,309 1,197 3,309

Notes 1 The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice.

Maturity analysis of contractual payables Refer to Note 27 for maturity analysis of contractual payables. Page 25 of 48

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NOTE 14

Provisions

Institute 2013 2012 14 Provisions $'000 $'000 Current provisions expected to be settled within 12 months Employee benefits Annual leave 338 349 Long service leave 181 226 Total current provisions expected to be settled within 12 months 519 575

Current provisions expected to be settled after 12 months Employee benefits Long service leave 1,256 1,332 Total current provisions expected to be settled after 12 months 1,256 1,332 Total current provisions 1,775 1,907

Non-current Employee benefits: Long service leave 322 335 Total non-current provisions 322 335

Total provisions 2,097 2,242

Institute 2013 2012 Movements in Provisions $'000 $'000 Movements in each class, other than employee provisions during the financial year are set out below: Carrying amount at start of year 2013 2,242 2,765 2012 NOTE 12: OTHERAdditional NON-FINANCIAL provisions recognised ASSETS $’000 1,051 $’000 347 CurrentAmounts other used non-financial assets (1,213) (880) UnusedPrepayments amounts reversed 144 - (15)- IncreaseTotal in current discounted other non-financial amount assets 144 17 25- Carrying amount at end of year 2,097 2,242 Total other non-financial assets 144 -

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2013_ANNUAL REPORT_FINAL.indd 49 1/05/14 3:58 PM NOTESNotes to the TO Financial THE FINANCIAL Statements - Advance STATEMENT TAFE FORfor the THE year YEAR ended ENDED 31 December 31 DECEMBER 2013 2013

NOTE 15

Equity

Institute 2013 2012 15 Equity $'000 $'000 (a) Contributed Capital Balance at 1 January 15,556 15,556 Capital contributions 3,736 - Balance at 31 December 19,292 15,556

(b) Accumulated surplus / (deficit) Balance at 1 January 31,874 32,748 Net result for the year (9,058) (874) Balance at 31 December 22,816 31,874

(c) Reserves Composition of Reserves Land surplus 4,517 4,517 Buildings surplus 4,177 4,177 Available-for-sale revaluation surplus1 388 388 Balance at 31 December 9,082 9,082

Total equity 51,190 56,512

Institute 2013 2012 15 Movements in Reserves $'000 $'000 Asset Revaluation Surplus - Land Balance at 1 January 4,517 4,273 Revaluation increment on non-current assets - 244 Balance at 31 December 4,517 4,517

Asset Revaluation Surplus - Buildings Balance at 1 January 4,177 7,241 Revaluation (decrement) on non-current assets - (3,064) Balance at 31 December 4,177 4,177

Financial assets available-for-sale revaluation surplus Balance at 1 January 388 390 Valuation gain/(loss) recognised - (2) Balance at 31 December 388 388

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NOTE 16

Cash flow information

Institute 2013 2012 16 Cash flow information $'000 $'000 (a) Reconciliation of operating result after income tax to net cash flows from operating activities Net result for the year (9,058) (874)

Non-cash flows in operating result Depreciation and amortisation of non-current assets 2,217 2,384 Net (gain) / loss on sale of non-current assets (79) 2 Goodwill write off 55 - Port of Sale transfer - (543) Capitalised costs write off 2,059 - Trade Centre land transfer - (1,074) Movement in allowance for doubtful debts 651 29 Net gain/(loss) on employee benefits provision 17 25 Total non-cash flows in operating result 4,920 823

Movements in operating assets and liabilities Decrease / (increase) in trade receivables (455) 21 Decrease / (increase) in inventories 17 (6) Decrease / (increase) in other debtors 872 1,456 Increase / (decrease) in payables (2,111) (220) Increase / (decrease) in employee benefits (164) (548) Increase / (decrease) in other financial assets (143) - Total movement in operating assets and liabilities (1,984) 703 Net cash flows provided by/(used in) operating activities (6,123) 652

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2013_ANNUAL REPORT_FINAL.indd 51 1/05/14 3:58 PM Financial Reporting Framework NOTESNotes to theTO Financial THE FINANCIAL Statements - AdvanceSTATEMENT TAFE FORfor the THE year YEAR ended ENDED 31 December 31 DECEMBER 2013 2013

NOTE 17

Commitments

Lease Commitments

Institute 2013 2012 17 Commitments $'000 $'000 (a) Lease commitments Commitments in relation to leases contracted for at the reporting date but not recognised as liabilities, payable: Within one year 140 53 Later than one year but not later than five years 291 188 Later than five years 1,087 1,007 Total lease commitments 1,518 1,248 GST reclaimable on the above (138) (113) Net commitments operating leases 1,380 1,135

Representing: Cancellable operating leases 1,233 1,248 Non-cancellable operating leases 147 - Total lease commitments 1,380 1,248

(i) Operating leases

Institute 2013 2012 $'000 $'000

As at the reporting date leased property centrally managed and paid on behalf of the Institute by the Office of Training and Tertiary Education were as follows: Financial ReportingCentrally Framework Managed Property Leases - 46 Notes toTotal the centrally Financial managed Statements property leases - Advance TAFE - 46 for the year ended 31 December 2013

NOTE 18

Leased assets

Institute 2013 2012 18 Leased assets $'000 $'000 As at the reporting date the Institute leased out the following assets: Café & canteen - Forestech campus, Kalimna - 3 Building K - Fulham campus, Sale - 19 Gross amount of leased assets - 22 Page 30 of 48

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NOTE 19

FinancialContingent Reporting Assets Framework and Contingent Liabilities Notes to the Financial Statements - Advance TAFE forThere the were year noended known 31 Decembercontingent 2013 assets or contingent liabilities as at balance date (2012 - Nil)

NOTE 20

Economic dependency

Institute 2013 2012 20 Economic dependency $'000 $'000 Higher Education & Skills Group 7,634 13,164 7,634 13,164

Financial Reporting Framework Notes 1 Higher to Education the & Skills Financial Group Statements -‐ Advance TAFE Financial ReportingFinancial Framework Reporting Framework for the year ended 31 December 2013 NotesThe toInstitute theNotes Financial is dependent to the Statements Financialon a significant Statements - Advancevolume of revenue TAFE- Advance derived TAFE from the Higher Education & Skills Group (formerly the Victorian Skills Commission). The revenues predominantly fund the delivery of general and specific training courses. for the year endedfor the 31 year December ended 201331 December 2013 NOTE 21

NOTE 21 NOTE 21 Subsequent events

Subsequent eventsSubsequent events

21 Subsequent events

21 Advance Subsequent21 TAFE eventsSubsequent have events signed a memorandum of understanding whereby Advance TAFE will be amalgamated with Gipps TAFE to form a combined operation commencing on the 1st May 2014 to trade under the name Federation Training with a view to then Advance TAFE Advancehave signed TAFE a memorandumhave signed a memorandum of understanding of understanding whereby Advance whereby TAFE Advancewill be amalgamated TAFE will be amalgamatedwtih Gipps wtih Gipps being amalgamated into the operation of Federation University of Australia pending acceptable financial and operating TAFE to form aTAFE combined to form operation a combined commencing operation on commencing the 1st May on 2014 the to1st trade May under2014 to the trade name under Federation the name Training Federation Training Financialperformance Reporting Framework over a twenty month period. In doing so the amalgamated operations receive support funding through the state with a view to withthen a being view amalgamatedto then being amalgamatedinto the operation into theof Federation operation Universityof Federation of Australia University pending of Australia acceptable pending acceptable government's TAFE Structural Adjustment Fund as announced by the Minister on the 16th April 2014 to support the Notesfinancial to the and Financialoperatingfinancial andperformance Statements operating over performance a- twentyAdvance overmonth aTAFE twenty period. month In doing period. so the In amalgamated doing so the amalgamatedoperations receive operations receive amalgamation activities. for thesupport year ended funding support31 through December funding the 2013state through government's the state government'sTAFE Structural TAFE Adjustment Structural Fund Adjustment as announced Fund asby announcedthe Minister by on the Minister on the 16th April the2014 16th to support April 2014 the to amalgamation support the amalgamation activities. activities. NOTE 22

Remuneration of auditors

Institute

2013 2012 22 Remuneration of auditors $'000 $'000 Remuneration of Victorian Auditor General's Office for: Audit or review of the financial statements 20 23 Total remuneration of Victoria Auditor General's Office 20 23 Remuneration of other auditors Internal Auditors 27 44 Total remuneration of other auditors of subsidiaries 27 44 Total Remuneration of auditors 47 67

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P:\My Documents\AdvanceP:\My Documents\Advance TAFE - 2013 Accounts TAFE (Final - 2013 updated Accounts for (FinalAASB updated119 AASB13) for AASB v10_0704_2404 119 AASB13) v10_0704_2404 29/04/2014 3:02 PM29/04/2014 3:02 PM Financial Reporting Framework NOTESNotes to theTO Financial THE FINANCIAL Statements - Advance STATEMENT TAFE FORfor the THE year YEAR ended ENDED 31 December 31 DECEMBER 2013 2013

NOTE 23

Superannuation (Part I)

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

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

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

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

Institute 2013 2012 23 Superannuation $'000 $'000 Paid Contribution for the Year Defined benefit plans : State Superannuation Fund – revised and new 50 100 Total defined benefit plans 50 100

Defined contribution plans: VicSuper 786 866 Other 406 351 Total defined contribution plans 1,192 1,217 Total paid contribution for the year 1,242 1,317

Contribution Outstanding at Year End Defined benefit plans: State Superannuation Fund – revised and new 3 7 Total defined benefit plans 3 7

Defined contribution plans: VicSuper 57 60 Other 31 29 Total defined contribution plans 88 89 Total 91 96

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

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2013_ANNUAL REPORT_FINAL.indd 54 1/05/14 3:58 PM Financial Reporting Framework Notes to the Financial Statements - Advance TAFENOTES TO THE FINANCIAL STATEMENT for the year ended 31 December 2013 FOR THE YEAR ENDED 31 DECEMBER 2013

NOTE 24

Key management personnel disclosures (Part I)

Responsible persons related disclosures

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

(i) Minister

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

(ii) Members of the Board of Advance TAFE of TAFE Board Ministerial appointment Board Director / Chair - Scott Rossetti Board Director - Catherine Greaves Board Director - Lyndon Webb Board Director - Gabrielle Bell Board Director - Angus Hume Board Nominee Director - Dianne Wilkinson (appointed 01/09/13) Board Nominee Director - Tim Weight (appointed 01/09/13) Board Nominee Director - Thelma Hutchinson (appointed 01/09/13) Board Nominee Director - Andrew Reynolds (appointed 01/09/13)

(iii) Executive Officers The following persons also had authority and responsibility for planning, directing and controlling the activities of Institute during the financial year: Chief Executive Officer - Shaun McDonagh (appointed 31/07/2013) Executive Manager Corporate Services - Peter Quilligan (resigned 01/07/13) Executive Manager Development - Jane Ponting (resigned 13/09/13) Executive Manager Learning and Innovation - Catherine Brigg (resigned 12/07/13) Executive Manager Corporate Services - Nicholas Fordham (appointed 02/07/13) Executive Manager Learning and Innovation - Karen Bird (appointed 13/07/13) Chief Finance Officer - Brenton Barker (appointed 23/09/13) There were no other key management personnel. All of the above persons were also key management persons during the year ended 31 December 2013

Responsible persons

Institute 2013 2012 24 Key management personnel disclosures $'000 $'000 Remuneration of Board members

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2013_ANNUAL REPORT_FINAL.indd 55 1/05/14 3:58 PM Financial Reporting Framework Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 24

Key management personnel disclosures (Part I)

Responsible persons related disclosures

(i) Minister

(iii) Executive Officers The following persons also had authority and responsibility for planning, directing and controlling the activities of Institute during the financial year: Chief Executive Officer - Shaun McDonagh (appointed 31/07/2013) Executive Manager Corporate Services - Peter Quilligan (resigned 01/07/13) Executive Manager Development - Jane Ponting (resigned 13/09/13) Executive Manager Learning and Innovation - Catherine Brigg (resigned 12/07/13) Executive Manager Corporate Services - Nicholas Fordham (appointed 02/07/13) Executive Manager Learning and Innovation - Karen Bird (appointed 13/07/13) Chief Finance Officer - Brenton Barker (appointed 23/09/13) NOTESThere TO were THE no other FINANCIAL key management personnel.STATEMENT FORFinancial THEAll ofReporting YEAR the above ENDED Framework persons 31 DECEMBER were also key2013 management persons during the year ended 31 December 2013 Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013 Responsible persons

NOTE 24 Institute 2013 2012 24Key managementKey management personnel personnel disclosures disclosures (Part I) $'000 $'000 Remuneration of Board members Remuneration received, or due and receivable from the Institute in connection with the management of the Institute. Includes termination payments and bonuses paid at end of 88 368 contracts. Page 37 of 48

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No. No. Income range The number of Board members whose remuneration from the Institute was within the specified bands are as follows: Less than $10,000 5 9 $10,000 - $19,999 4 2 $300,000 - $309,999 - 1 Total number of Responsible Persons 9 12

$'000 $'000 Retirement benefits of Board members The retirement benefits paid by the Institute in connection with the Board members of the - - Institute amounted to: Total retirement benefits of Board members - -

Executive officers

Institute 2013 2012 24 Key management personnel disclosures $'000 $'000 Executive Officers' Remuneration

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

Base remuneration of executive officers 527 429 Total remuneration of executive officers 527 462

No. No. Income range The number of executive officers whose remuneration from the Institute was within the specified bands are as follows: $20,000 - $29,999 - - $30,000 - $39,999 1 -

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2013_ANNUAL REPORT_FINAL.indd 56 1/05/14 3:58 PM Financial Reporting Framework Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 24

Key management personnel disclosures (Part I)

Remuneration received, or due and receivable from the Institute in connection with the management of the Institute. Includes termination payments and bonuses paid at end of 88 368 contracts.

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

Executive officers

Institute 2013 2012 24 Key management personnel disclosures $'000 $'000 Executive Officers' Remuneration

Base remuneration of executive officers 527 429 FinancialTotal Reporting remuneration Framework of executive officers 527 462 Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013 No. No. Income range NOTEThe 24 number of executive officers whose remuneration from the Institute was within the specified bands are as follows: Key management$20,000 - $29,999 personnel disclosures (Part I) - - $30,000 - $39,999 1 - $60,000 - $69,999 2 - Page 38 of 48 $70,000 - $79,999 2 - V:\Finance1\Reporting\Annual reports\2013\Framework\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) FINAL_2103 21/03/2014 3:37 PM $80,000 - $89,999 1 - $110,000 - $129,999 - - $130,000 - $139,999 1 - $140,000 - $149,999 - 1 $150,000 - $159,999 - 1 $160,000 - $169,999 - 1 Total executive officers 7 3 Total annualised employee equivalent (AEE) 4 3

Key management personnel

Institute 2013 2012 24 Key management personnel disclosures No. No. Excutive Officers' personnel compensation Termination benefits 1 - Total key management personnel compensation 1 -

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V:\Finance1\Reporting\Annual reports\2013\Framework\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) FINAL_2103 21/03/2014 3:37 PM Financial Reporting Framework NOTESNotes to the TO Financial THE FINANCIAL Statements - Advance STATEMENT TAFE FORfor the THE year YEAR ended ENDED 31 December 31 DECEMBER 2013 2013

NOTE 25

Related parties

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

Transactions with related parties

ThereFinancial were Reporting no transactions Framework at any time during the year with related parties. Notes to the Financial Statements - Advance TAFE for the year ended 31 December 2013

NOTE 26

Institute details

26 Institute details The registered office of the Institute is:

Advance TAFE 48 Main st, Bairnsdale VIC 3875

The principal place of business is:

Advance TAFE 48 Main st, Bairnsdale VIC 3875

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

Page 41 of 48

V:\Finance1\Reporting\Annual reports\2013\Framework\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) FINAL_2103 21/03/2014 3:37 PM Financial Reporting Framework Notes to the Financial Statements - AdvanceNOTES TAFE TO THE FINANCIAL STATEMENT for the year ended 31 December 2013 FOR THE YEAR ENDED 31 DECEMBER 2013

NOTE 27- 1

Financial Instruments (Part I)

27 Financial Instruments

Financial risk management (i) Financial risk management objectives

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

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

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

(ii) Financial risk exposures and management The Institute's financial instruments consist mainly of deposits with banks, local money market instruments, short term investments, accounts receivables and payables and leases. The main risks the Institute is exposed to through its financial instruments are market risk, foreign currency risk, price risk, funding risk, interest rate risk, credit risk and liquidity risk.

(iii) Categorisation of financial instruments Institute Carrying amount of financial instruments by category: 2013 2012 $'000 $'000 Financial Assets Note Category Cash and Deposits 5 Cash 1,963 1,998 Receivables (a) 6 Loans and receivables 607 821 Other financial assets 7 Other financial assets - - Term Deposit - 4,500 Collateralised Debt Obligations - 1,938 2,570 9,257

Financial Liabilities Payables (a) 13 Financial liabilities 1,123 3,162 1,123 3,162

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2013_ANNUAL REPORT_FINAL.indd 59 1/05/14 3:58 PM Financial Reporting Framework NOTESNotes to the TO Financial THE FINANCIAL Statements - Advance STATEMENT TAFE FORfor the THE year YEAR ended ENDED 31 December 31 DECEMBER 2013 2013

NOTE 27- 1

Financial Instruments (Part I)

Institute Net holding gain/(loss) on financial instruments by category: 2013 2012 $'000 $'000 Financial Assets Category Other financial assets Other financial assets - - Collateralised Debt Obligations - (62) - - Note: (a) Receivables and payables disclosed here exclude statutory receivables and statutory payables.

Market risk The Board ensures that all market risk exposure is consistent with the Institute's business strategy and within the risk tolerance of the Institute. Regular risk reports are presented to the Board. There has been no significant change in the Institute's exposure, or its objectives, policies and processes for managing market risk or the methods used to measure this risk from the previous reporting period.

Foreign currency risk

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

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

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

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

The objective is to manage the rate risk to achieve stable and sustainable net interest earnings in the long term. This is managed predominately through a mixture of short term and longer term investments.

Funding risk Funding risk is the risk of over reliance on a funding source to the extent that a change in that funding source could impact on the operating result for the current year and future years. The Institute manages funding risk by continuing to diversify and increase funding from Commercial activities, both domestically and off shore. The model used by the Victorian State Government to fund TAFE Institutes is undergoing continued change and the Institute has implemented controls to manage the funding risk and monitor its impact.

Concentrations of credit risk The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance sheet and notes to the financial statements.

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2013_ANNUAL REPORT_FINAL.indd 60 1/05/14 3:58 PM Financial Reporting Framework Notes to the Financial Statements - AdvanceNOTES TAFE TO THE FINANCIAL STATEMENT for the year ended 31 December 2013 FOR THE YEAR ENDED 31 DECEMBER 2013

NOTE 27- 1

Financial Instruments (Part I)

There are no material amounts of collateral held as security at 31 December 2013. Credit risk is managed on a category basis and reviewed regularly by the audit and risk committee. It arises from exposures to customers as well as through deposits with financial institutions.

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

• surplus cash reserves must be invested with the Treasury Corporation of Victoria or the Victorian Funds Management Corporation. • all potential customers are rated for credit worthiness taking into account their size, market position and financial standing; and • customers that do not meet the group’s strict credit policies may only purchase in cash or using recognised credit cards.

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

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

The Institute minimises credit risk in relation to student loans receivable in the following ways: • Specific loan conditions have been established which are applicable to all loans. A $50 loan fee was established in 2008 to minimise the number of student loans, and encourage up-front payments.

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

• All loan monies must relate to the cost of attendance at the Institute, whether that be for fees, materials, books or protective clothing, etc. • A schedule of repayment is agreed with the student at the time of making application.

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

Liquidity risk Ultimate responsibility for liquidity risk management rests with the institute's governing body, which has built an appropriate liquidity risk management framework for the management of the short, medium and long-term funding and liquidity requirements. The institute manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. In view of the working capital levels as at the 31st December 2013 weekly cash flow monitoring is taking place as turn around initiatives are closely monitored.

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2013_ANNUAL REPORT_FINAL.indd 61 1/05/14 3:58 PM Financial Reporting Framework NOTESNotes to the TOFinancial THE Statements FINANCIAL - Advance TAFESTATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013 for the year ended 31 December 2013

NOTE 27 - 2

Financial Instruments (Part II)

27 Financial instruments

(ii) Summarised sensitivity analysis

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

Interest rate risk Other price risk Carrying -1% 1% -5% 5% amount Result Equity Result Equity Result Equity Result Equity 31 December 2013 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Financial assets Cash and deposits 1,963 (20) (20) 20 20 - - - - Receivables 607 ------Other financial assets ------Term Deposit ------Total increase/ (decrease) in financial assets 2,570 (20) (20) 20 20 - - - -

Financial liabilities Payables (1,123) ------Total increase/ (decrease) in financial liabilities (1,123) ------Total increase/ (decrease) 1,447 (20) (20) 20 20 - - - -

Interest rate risk Other price risk Carrying -1% 1% -5% 5% amount Result Equity Result Equity Result Equity Result Equity 31 December 2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Financial assets Cash and cash equivalents 1,998 (20) (20) 20 20 - - - - Receivables 821 ------Other financial assets ------Term Deposit 4,500 ------Collateralised Debt Obligations 1,938 ------Total increase/ (decrease) in financial assets 9,257 (20) (20) 20 20 - - - -

Financial liabilities Payables (3,162) ------Total increase/ (decrease) in financial liabilities (3,162) ------Total increase/ (decrease) 6,095 (20) (20) 20 20 - - - -

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2013_ANNUAL REPORT_FINAL.indd 62 1/05/14 3:58 PM Financial Reporting Framework Notes to the Financial Statements - Advance TAFE NOTES TO THE FINANCIAL STATEMENT Financialfor the Reporting year Frameworkended 31 December 2013 FOR THE YEAR ENDED 31 DECEMBER 2013 Notes to the Financial Statements - Advance TAFE forNOTE the year 27 ended - 331 December 2013 NOTE 27 - 3 Financial instruments (Part III) Financial instruments (Part III)

2727 FinancialFinancial instruments instruments

(iii) Financial instrument composition and interest rate exposure (iii) Financial instrument composition and interest rate exposure The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management’s expectations of the settlement period for all other financial instruments. As such, the amounts may not reconcile to the balance sheet. The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management’s expectations of the settlement period for Exposureall other to interest financial rate risk instruments. is insignificant and As may such, arise theprimarily amounts through themay Institute’s not reconcile borrowings. to Minimisation the balance of risk sheet.is achieved by mainly undertaking fixed rate or non interest bearing financial instruments. For financial liabilities, the Institute mainly undertakes financial liabilities with relatively even maturity profiles. The Institute’s borrowings are managed by [specify] and any movements in interest rates are monitored on a daily basis. [amend as appropriate for the Institute] TheExposure Department’s to exposure interest to interestrate risk rate isrisk insignificant is set out below and may arise primarily through the Institute’s borrowings. Minimisation of risk is achieved by mainly undertaking fixed rate or non interest bearing financial instruments. For financial liabilities, the Institute mainly undertakes financial liabilities with relatively even maturity profiles. The Institute’s borrowings are managed by [specify] and any movements in interest rates are monitored on a daily basis. [amend as appropriate for the Institute] Weighted Total Carrying The Department’s exposure to interest rate risk is set out below Floating Fixed Non-Interest average Amount per interest rate interest rate Bearing effective rate Balance Sheet 2013 % $`000 $`000 $`000 $`000 Financial assets Weighted Total Carrying Cash and deposits Floating Fixed Non-Interest average Amount per Cash at bank and on hand 2.45 963 963 - - interest rate interest rate Bearing Contractual receivables - effective rate Balance Sheet 2013Trade receivables - 607 - % - $`000 607 $`000 $`000 $`000 Investment, loans and other financial assets - Financial Term Deposit assets - - - - - TotalCash financial and assets deposits 1,570 963 - 607 Cash at bank and on hand 2.45 963 963 - - Trade and other payables - 1,123 - - 1,123 Contractual receivables - Total financial liabilities - 1,123 - - 1,123 Trade receivables - 607 - - 607 Weighted Total Carrying Floating Fixed Non-Interest Investment, loans and other financial assets average Amount per - interest rate interest rate Bearing Term Deposit effective rate Balance Sheet - - - - - 2012 % $`000 $`000 $`000 $`000 FinancialTotal assets financial assets 1,570 963 - 607 Cash and cash equivalents Cash at bank and on hand 3.64 1,998 1,998 - - ContractualTrade and receivables other payables - 1,123 - - - 1,123 Trade receivables - 821 - - 821 Total financial liabilities - 1,123 - - 1,123 Investments, loans and other financial assets - Term Deposit 3.90 4,500 - 4,500 - Collateralised Debt Obligations - 1,938 1,938 Weighted - Total Carrying - Floating Fixed Non-Interest Total financial assets 9,257 3,936 average 4,500 Amount 821per interest rate interest rate Bearing Financial liabilities effective rate Balance Sheet - Trade2012 and other payables - 3,162 - % - $`000 3,162 $`000 $`000 $`000 Total financial liabilities - 3,162 - - 3,162 Financial assets Note Cash1. Other and receivables cash equivalents does not include statutory receivables. Cash at bank and on hand 3.64 1,998 1,998 - - (iv) Ageing analysis of financial assets Contractual receivables - There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated. The followingTrade table disclosesreceivables the contractural maturity analysis for the Institute's financial assets and financial liabilities. - 821 - - 821 Investments, loans and other financial assets - Not past Maturity dates Impaired Term Deposit Carrying 3.90 4,500 - 4,500 - due and not ‑ ‑ financial amount Less than 1 3 3 months 1 5 Collateralised Debt Obligations impaired 1 month months – 1 year years - assets 1,938 1,938 - - 2013Total Financial financial assets assets 9,257 3,936 4,500 821 Contractual receivables FinancialTrade receivables liabilities 607 458 171 39 639 - (700) - Investments, loans and other financial assets Trade and other payables - 3,162 - - 3,162 Term Deposit ------TotalTotal 2013 financial financial assets liabilities 607 458 171 39 639 -- 3,162(700) - - 3,162

2013 Financial liabilities Note Financial liabilities Trade and1. otherOther payables receivables does not include statutory receivables. 1,197 1,190 7 - - - - Total 2013 financial liabilities 1,197 1,190 7 - - - -

2012(iv) Financial Ageing assets analysis of financial assets Contractual receivables ThereTrade receivables are no financial assets that have had their terms renegotiated 803 so - as to prevent 351 them from 200 being past 252 due or impaired, - and they are (49) stated at the carrying amounts as indicated. The followingRevenue receivables table discloses the contractural maturity analysis 18 for the Institute's 18 financial - assets and - financial liabilities. - - - 63 Investments, loans and other financial assets - Term Deposit 4,500 4,500 - - - - - Collateralised Debt Obligations 1,938 - - Not - past - 2,000 Maturity (62) dates Impaired 2013_ANNUAL REPORT_FINAL.indd 63 Carrying 1/05/14 3:58 PM Total 2012 financial assets 7,259 4,518 351 due 200 and not 252 2,000 ‑ (111) ‑ financial amount Less than 1 3 3 months 1 5 impaired assets 2012 Financial liabilities 1 month months – 1 year years Financial2013 liabilitiesFinancial assets Trade and other payables 3,162 3,162 - - - - - TotalContractual 2012 financial receivablesliabilities 3,162 3,162 - - - - - Trade receivables 607 458 171 39 639 - (700) Investments, loans and other financial assets Term Deposit ------Total 2013 financial assets 607 458 171 39 639 - (700)

2013 Financial liabilities Financial liabilities Trade and other payables 1,197 1,190 7 - - - - Total 2013 financial liabilities 1,197 1,190 7 - - Page - 46 of 48 - V:\Finance1\Reporting\Annual reports\2013\Framework\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) FINAL_2103 21/03/2014 3:37 PM

2012 Financial assets Contractual receivables Trade receivables 803 - 351 200 252 - (49) Revenue receivables 18 18 - - - - - Investments, loans and other financial assets - Term Deposit 4,500 4,500 - - - - - Collateralised Debt Obligations 1,938 - - - - 2,000 (62) Total 2012 financial assets 7,259 4,518 351 200 252 2,000 (111)

2012 Financial liabilities Financial liabilities Trade and other payables 3,162 3,162 - - - - - Total 2012 financial liabilities 3,162 3,162 - - - - -

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NOTE 27 - 3

Financial instruments (Part III)

27 Financial instruments

(iii) Financial instrument composition and interest rate exposure

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

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

Weighted Total Carrying Floating Fixed Non-Interest average Amount per interest rate interest rate Bearing effective rate Balance Sheet 2013 % $`000 $`000 $`000 $`000 Financial assets Cash and deposits Cash at bank and on hand 2.45 963 963 - - Contractual receivables - Trade receivables - 607 - - 607 Investment, loans and other financial assets - Term Deposit - - - - - Total financial assets 1,570 963 - 607

Trade and other payables - 1,123 - - 1,123 Total financial liabilities - 1,123 - - 1,123

Weighted Total Carrying Floating Fixed Non-Interest average Amount per interest rate interest rate Bearing effective rate Balance Sheet 2012 % $`000 $`000 $`000 $`000 Financial assets Cash and cash equivalents Cash at bank and on hand 3.64 1,998 1,998 - - Contractual receivables - Trade receivables - 821 - - 821 Investments, loans and other financial assets - Term Deposit 3.90 4,500 - 4,500 - Collateralised Debt Obligations - 1,938 1,938 - - Total financial assets 9,257 3,936 4,500 821

Financial liabilities - Trade and other payables - 3,162 - - 3,162 Total financial liabilities - 3,162 - - 3,162 NOTESFinancial Reporting Framework TO THE FINANCIAL STATEMENT Notes Noteto the Financial Statements - Advance TAFE FOR THE1. Other YEAR receivables ENDED does not 31 include DECEMBER statutory receivables. 2013 for the year ended 31 December 2013

NOTE(iv) 27 Ageing - 3 analysis of financial assets There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated. The Financialfollowing instruments table discloses (Part III) the contractural maturity analysis for the Institute's financial assets and financial liabilities.

27 Financial instruments Not past Maturity dates Impaired Carrying due and not ‑ ‑ financial (iii) Financial instrument composition and interest rate exposure amount Less than 1 3 3 months 1 5 impaired 1 month months – 1 year years assets 2013The tables Financial below assets reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management’s expectations of the settlement period for all other financial instruments. As such, the amounts may not reconcile to the balance sheet. Contractual receivables ExposureTrade toreceivables interest rate risk is insignificant and may arise primarily through the Institute’s 607 borrowings. 458 Minimisation of 171 risk is achieved by 39 mainly undertaking 639 fixed rate or- non interest bearing (700) Investments,financial instruments. loans and For other financial financial liabilities, assets the Institute mainly undertakes financial liabilities with relatively even maturity profiles. The Institute’s borrowings are managed by [specify] and any movements in interest rates are monitored on a daily basis. [amend as appropriate for the Institute] Term Deposit ------The Department’s exposure to interest rate risk is set out below Total 2013 financial assets 607 458 171 39 639 - (700)

2013 Financial liabilities Weighted Total Carrying Financial liabilities Floating Fixed Non-Interest average Amount per Trade and other payables 1,197 1,190 7 - interest rate - interest rate - Bearing - effective rate Balance Sheet Total 2013 financial liabilities 1,197 1,190 7 - - - - 2013 % $`000 $`000 $`000 $`000 Financial assets 2012 Financial assets Cash and deposits Contractual receivables Cash at bank and on hand 2.45 963 963 - - Trade receivables 803 - 351 200 252 - (49) Contractual receivables - Revenue receivables 18 18 - - - - - Trade receivables - 607 - - 607 Investments, loans and other financial assets - Investment, loans and other financial assets - Term Deposit 4,500 4,500 - - - - - Term Deposit - - - - - Collateralised Debt Obligations 1,938 - - - - 2,000 (62) Total financial assets 1,570 963 - 607 Total 2012 financial assets 7,259 4,518 351 200 252 2,000 (111)

Trade2012 Financial and other liabilities payables - 1,123 - - 1,123 TotalFinancial financial liabilities liabilities - 1,123 - - 1,123 Trade and other payables 3,162 3,162 - - - - - Weighted Total Carrying Total 2012 financial liabilities 3,162 3,162 - - Floating - Fixed - Non-Interest - average Amount per interest rate interest rate Bearing effective rate Balance Sheet 2012 % $`000 $`000 $`000 $`000 Financial assets Cash and cash equivalents Cash at bank and on hand 3.64 1,998 1,998 - - Contractual receivables - Trade receivables - 821 - - 821 Investments, loans and other financial assets - Term Deposit 3.90 4,500 - 4,500 - Collateralised Debt Obligations - 1,938 1,938 - - Total financial assets 9,257 3,936 4,500 821 Page 46 of 48

V:\Finance1\Reporting\Annual reports\2013\Framework\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) FINAL_2103 Financial liabilities - 21/03/2014 3:37 PM Trade and other payables - 3,162 - - 3,162 Total financial liabilities - 3,162 - - 3,162

Note 1. Other receivables does not include statutory receivables.

(iv) Ageing analysis of financial assets

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

Not past Maturity dates Impaired Carrying due and not ‑ ‑ financial amount Less than 1 3 3 months 1 5 impaired 1 month months – 1 year years assets 2013 Financial assets Contractual receivables Trade receivables 607 458 171 39 639 - (700) Investments, loans and other financial assets Term Deposit ------Total 2013 financial assets 607 458 171 39 639 - (700)

2013 Financial liabilities Financial liabilities Trade and other payables 1,197 1,190 7 - - - - Total 2013 financial liabilities 1,197 1,190 7 - - - -

2012 Financial assets Contractual receivables Trade receivables 803 - 351 200 252 - (49) Revenue receivables 18 18 - - - - - Investments, loans and other financial assets - 64 Term Deposit 4,500 4,500 - - - - - Collateralised Debt Obligations 1,938 - - - - 2,000 (62) Total 2012 financial assets 7,259 4,518 351 200 252 2,000 (111)

2013_ANNUAL REPORT_FINAL.indd 64 1/05/14 3:58 PM 2012 Financial liabilities Financial liabilities Trade and other payables 3,162 3,162 - - - - - Total 2012 financial liabilities 3,162 3,162 - - - - -

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V:\Finance1\Reporting\Annual reports\2013\Framework\Advance TAFE - 2013 Accounts (Final updated for AASB 119 AASB13) FINAL_2103 21/03/2014 3:37 PM Financial Reporting Framework Notes to the Financial Statements - Advance TAFE NOTES TO THE FINANCIAL STATEMENT for the year ended 31 December 2013 FOR THE YEAR ENDED 31 DECEMBER 2013

NOTE 27- 4

Financial instruments (IV)

27 Financial instruments

Fair value estimation

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

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

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

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

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

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

Due to the short-term nature of the current receivables, their carrying value is assumed to approximate their fair value and based on credit history it is expected that the receivables that are neither past due nor impaired will be received when due. For other assets and other liabilities the fair value approximates their carrying value. Financial assets where the carrying amount exceeds fair values have not been written down as the Institute intends to hold these assets to maturity.

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

2013 2012 Carrying Net Fair Carrying Net Fair Amount Value Amount Value 27 Financial instruments $’000 $’000 $’000 $’000 Financial assets Cash and cash equivalents Cash at bank and on hand 963 963 1,998 1,998 Deposits at call 1,000 1,000 - - Contractual receivables Trade receivables 607 607 821 821 Receivables from other parties 289 289 1,144 1,144 Investments, loans and other financial assets Term Deposit - - 4,500 4,500 Collateralised Debt Obligations - - 1,938 1,938 Total financial assets 2,859 2,859 10,401 10,401

Financial liabilities Payables 1,123 1,123 3,162 3,162 Borrowings - - - - Total financial liabilities 1,123 1,123 3,162 3,162

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2013_ANNUAL REPORT_FINAL.indd 65 1/05/14 3:58 PM Financial Reporting Framework NOTESNotes to the TO Financial THE FINANCIALStatements - Advance STATEMENT TAFE FORfor the THE year YEAR ended ENDED 31 December 31 DECEMBER 2013 2013

NOTE 27- 4

Financial instruments (IV)

The following tables provide an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

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

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

Fair value measurements recognised in the balance sheet are categorised into the following levels:

Level 1 Level 2 Level 3 Un- Quoted Observable 2013 observable Prices Price Inputs Inputs $’000 $‘000 $‘000 $‘000 Financial assets Collateralised Debt Obligations - - - - Total financial assets - - - -

Level 1 Level 2 Level 3 Un- Quoted Observable 2012 observable Prices Price Inputs Inputs $’000 $‘000 $‘000 $‘000 Financial assets Collateralised Debt Obligations 1,938 - 1,938 - Total financial assets 1,938 - 1,938 -

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2013_ANNUAL REPORT_FINAL.indd 66 1/05/14 3:58 PM Disclosure Index

ITEM SOURCE PAGE NO. REFERENCE REPORTING REQUIREMENT NO.

REPORT OF OPERATIONS

CHARTER AND PURPOSE

1 FRD 22D Manner of establishment and the relevant Minister 5

2 FRD 22D Objectives, functions, powers and duties 5

3 FRD 22D Nature and range of services provided including communities served 5

MANAGEMENT AND STRUCTURE

4 FRD 22D Organisational structure and chart, including accountabilities 7

5 FRD 22D Names of Board members 6

FINANCIAL AND OTHER INFORMATION

6 FRD 03A Accounting for Dividends 31

7 FRD 07A Early adoption of authoritative accounting pronouncements n/a

8 FRD 10 Disclosure Index 67-70

9 FRD15B Executive officer disclosures 55-57

10 FRD 17A Long Service leave wage inflation and discount rates 34, 49

11 FRD19 Private provision of public infrastructure n/a

12 FRD 20A Accounting for State motor vehicle lease arrangements prior to 1 Feb 2004 n/a

13 FRD22 & SD Operational and budgetary objectives, performance against objectives and achievements 21-66 4.2(k)

14 FRD 22D Occupational health and safety statement including performance indicator and performance against those 14 indicators

15 FRD 22D Workforce data for current and previous reporting period including a statement on employment and 10-11, conduct principles 15

16 FRD 22D Summary of the financial results for the year including previous 4 year comparisons 19

17 FRD 22D Significant changes in financial position during the year 28

18 FRD 22D Major changes or factors affecting performance 28

19 FRD 22D Post-balance sheet date events likely to significantly affect subsequent reporting periods 28

20 FRD 22D Summary of application and operation of the Freedom of Information Act 1982 15

21 FRD 22D Statement of compliance with building and maintenance provisions of the Building Act 1993 14

22 FRD 22D Statement on National Competition Policy 15

23 FRD 22D Summary of application and operation of the Protected Disclosure Act 2012 15

24 FRD 22D Summary of Environmental Performance. 15

25 FRD 22C Details of consultancies over $10,000 (refer to FRD for information required) 15

26 FRD 22C Details of consultancies under $10,000 (refer to FRD for information required) 15

27 FRD 22D List of certain other information available on request (as specified in the FRD) 14

28 FRD 24C Reporting of office based environmental impacts 15

29 FRD 25A Victorian Industry Participation Policy Disclosures 15

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ITEM SOURCE PAGE NO. REFERENCE REPORTING REQUIREMENT NO.

30 FRD 26A Accounting for VicFleet motor vehicle lease arrangements on or after 1 February 2004 n/a

31 FRD 29 Workforce Data Disclosures on the public service employee workforce 11

32 FRD30A Standard requirements for the design and print of annual reports 2

33 SD 4.5.5 Risk Management compliance attestation 16

34 SD 4.2 (g) Qualitative and Quantitative information to be included 4-16

35 SD 4.2 (h) Statement that Report prepared in accordance with Financial Reporting Directions 21

36 SD 4.2 (j) Sign-off by member of Responsible Body 21

37 CG 10 Major Commercial Activities 12-13 (clause 27)

38 CG 12 Controlled Entities 28 (clause 33)

FINANCIAL REPORT

FINANCIAL STATEMENTS REQUIRED UNDER PART 7 OF THE FINANCIAL MANAGEMENT ACT 1984

39 SD 4.2 (a) The financial statements must be prepared in accordance with: • Australian accounting standards (AAS and AASB standards) and other mandatory professional reporting 21 requirements (including urgent issues group consensus views); 21 • Financial Reporting Directions; and 21 • business rules.

40 SD 4.2 (b) The financial statements are to comprise the following: • income statement; 23 • balance sheet; 24 • statement of recognised income and expense; and 25 • cash flows statement; and 26 • notes to the financial statements. 27-66

OTHER REQUIREMENTS UNDER STANDING DIRECTION 4.2

41 SD 4.2 (c) The financial statements must where applicable be signed and dated by the Accountable Officer, CFAO and a member of the Responsible Body, stating whether, in their opinion: • the financial statements present fairly the financial transactions during the reporting period and the financial position at the end of the period; 21-22 • the financial statements are prepared in accordance with this direction and applicable Financial Reporting Directions; and 21-22 • the financial statements comply with applicable Australian accounting standards (AAS and AASB standards) and other mandatory professional reporting requirements (including urgent issues group consensus views). 21-22

42 SD 4.2 (d) Rounding of amounts. 35

43 SD 4.2 (e) Review and sign off by Audit Committee or responsible body 17, 22

44 SD 4.2 (f) Compliance with DTF Model Financial report 21-66

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ITEM SOURCE PAGE NO. REFERENCE REPORTING REQUIREMENT NO.

OTHER REQUIREMENTS AS PER FINANCIAL REPORTING DIRECTIONS IN NOTES TO THE FINANCIAL STATEMENTS

45 FRD 9A Disclosure of administered assets and liabilities n/a

46 FRD 11 Disclosure of ex-gratia payments 15

47 FRD 21B Disclosures of Responsible Persons, Executive Officer and Other Personnel (Contractors with significant 55-57 management responsibilities) in the Financial Report

48 FRD 101 First time adoption n/a

49 FRD 102 Inventories 33, 44

50 FRD 103D Non-current physical assets 32-33, 45

51 FRD 104 Foreign currency 28,42, 48, 59

52 FRD 105A Borrowing costs n/a

53 FRD 106 Impairment of assets 32, 45

54 FRD 109 Intangible assets 33, 47

55 FRD 107 Investment properties n/a

56 FRD 110 Cash flow statements 56

57 FRD 112C Defined benefit superannuation obligations 54

58 FRD 113 Investment in subsidiaries, jointly controlled entities and associates n/a

59 FRD 114A Financial instruments – general government entities and public non-financial corporations 65

60 FRD 115 Non-current physical assets – first time adoption n/a

61 FRD 119 Contributions by owners 25

62 FRD 119A Transfers through contributed capital 25

63 FRD 120G Accounting and reporting pronouncements applicable to the reporting period 36

64 FRD 121 Infrastructure assets n/a

PART 7 OF THE FINANCIAL MANAGEMENT ACT 1994 (FMA)

65 FMA 49 (a) Must contain such information as required by the Minister. 21

66 FMA 49 (b) Must be prepared in a manner and form approved by the Minister. 21

67 FMA 49 (c) Must present fairly the financial transactions of an institute during the financial year to which they relate. 21

68 FMA 49 (d) Must present fairly the financial position of an institute as at the end of the year. 21

69 FMA 49 (e) Must be certified by the Accountable Officer for an institute in the manner approved by the Minister. 21

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ITEM SOURCE PAGE NO. REFERENCE REPORTING REQUIREMENT NO.

COMPLIANCE WITH OTHER LEGISLATION AND SUBORDINATE INSTRUMENTS

70 Legislation The TAFE institute Annual Report must contain a statement that it complies with all relevant legislation and subordinate instruments, including, but not limited to, the following: Education and Training Reform Act 2006 (ETRA) 14-15 TAFE institute constitution Directions of the Minister for Higher Education and Skills (or predecessors) TAFE institute Commercial Guidelines TAFE institute Strategic Planning Guidelines Public Administration Act 2004 Freedom of Information Act 1982 Building Act 1983 Protected Disclosure Act 2012 Victorian Industry Participation Policy Act 2003

71 ETRA Statement about compulsory non-academic fees, subscriptions and charges payable in 2013. 15 s 3.2.8

PRESENTATION OF REPORTING AND PERFORMANCE INFORMATION Audited Statements of Key Performance Measures (KPIs) must include an audited statement of performance for certain KPIs.

72 FRD 27B Reporting and performance should be presented using KPIs and a signed Performance Management Certificate should also be completed. (The following 11 are the mandatory KPIs) 1. Participation of 15-24 year olds. 18 2. Participation of 25-64 year olds. 3. Module Load Completion Rate. 4. Student satisfaction. 5. Total Cost per Student Contact Hour (SCH). 6. Working Capital Ratio. 7. Net Operating Margin. 8. Fee for Service Revenue. 9. Revenue per EFT Staff. 10. Student Contact Hours (SCH). 11. Energy Consumption.

OVERSEAS OPERATIONS OF VICTORIAN TAFE INSTITUTES

73 PAEC and • financial and other information on initiatives taken or strategies relating to the institute’s overseas n/a VAGO (June operations. 2003 Special Review item • nature of strategic and operational risks for overseas operations; 3.110) • strategies established to manage such risks of overseas operations; • performance measures and targets formulated for overseas operations; • the extent to which expected outcomes for overseas operations have been achieved.

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We have three main campuses at Sale, Bairnsdale and Lakes Entrance, as well as specialist education centres located across south-east Victoria, encompassing the Wellington Shire and East Gippsland Shire region. We deliver courses in online and blended learning programs across the state.

The Hon. Peter Hall, MLC Minister for Higher Education and Skills and Minister responsible for the Teaching Profession

24 February 2014

Dear Minister,

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

The Annual Report was approved by the Advance TAFE Board on 24 February 2014. Sale Yours sincerely,

Melbourne

Mr Scott Rossetti Chair, Advance TAFE Board

SALE LOCATIONS BAIRNSDALE LOCATIONS LAKES ENTRANCE LOCATION Fulham Campus Bairnsdale Campus with G-tec Seamec Work Safety Centre Bairnsdale Trade Centre G-tec Oaktree Restaurant Sale Campus

advancetafe.edu.au | 1300 133 717

2013_ANNUAL REPORT_FINAL.indd 71 1/05/14 3:58 PM ANNUAL REPORT PO Box 886 2013 Bairnsdale Vic, 3875 ABN: 41 975 960 230 advancetafe.edu.au 1300 133 717

International callers +61 3 5152 0700 Interstate callers 03 5152 0700

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

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