2008 Bond University Annual Report DIRECTORS’ REPORT

The directors present their report on the consolidated entity consisting of Bond University Limited and the entities it controlled at the end of, or during, the year ended 31 December 2008.

DIRECTORS The following persons were directors of Bond University Limited during the whole of the financial year and up to the date of this report:

T C Rowe AM R Stable G Bugden OAM B Chow AO D Gibson AO K Greiner AO B Morris

P Fielding and T Ray were appointed as directors on 23 May BOND UNIVERSITY LIMITED 2008 and continue in office at the date of this report. A.C.N. 010 694 121 AND CONTROLLED ENTITIES N Balnaves and I Kortlang were directors from the beginning of the financial year until their resignation on 23 May 2008. COMPANY PARTICULARS Directors PRINCIPAL ACTIVITIES Trevor Rowe AM (Chancellor) The principal activity of the consolidated entity is the promotion Robert Stable (Vice Chancellor) and operation of Bond University in Queensland. The University Gary Bugden OAM (Deputy Chancellor) has an agreement with Business Breakthrough Inc. (BBT) Japan for the delivery of a Masters of Business Administration program Benjamin Chow AO in Japan. Peta Fielding Bond University provides English language courses through a Dennis Gibson AO subsidiary, Lashkar Pty Ltd (trading as Bond University English Kathryn Greiner AO Language Institute) and operates a Bond College that provides Bronwyn Morris pathway programs into the University. Tom Ray In addition to this, through a subsidiary, Campus Operations Pty Limited, Bond University Limited operates student Secretary accommodation including a food and beverage facility. Alan Finch During the year the University established a postgraduate and Executive Education facility in Sydney. Registered Office In the prior year the Board resolved to establish two subsidiary Bond University Limited companies, Bond Innovation 1 Pty Ltd and Bond R&D 1 Pty Ltd Level 6, The Arch for the purpose of developing further, the commercialisation Bond University Qld 4229 of research and development opportunities supported by the University. Auditors PricewaterhouseCoopers DIVIDENDS Riverside Centre Bond University Limited is a not for profit company limited by 123 Eagle Street guarantee. Accordingly, no dividend was declared (2007: nil). Brisbane Qld 4000 REVIEW OF OPERATIONS Solicitors The University achieved a surplus of $27.256 million for the year Minter Ellison compared with $14.326 million in the prior year. Waterfront Place The parent company reported a surplus for the year of $25.226 million (2007: $16.062 million) that includes an internal 1 Eagle Street management charge by the parent company to subsidiaries. Brisbane Qld 4000 The internal management charge had no impact upon the Corrs Chambers Westgarth consolidated surplus achieved by the University. Waterfront Place The surplus was derived from total operating revenue of $135.117 1 Eagle Street million (2007: $111.236 million) and other income of $10.819 Brisbane Qld 4000 million (2007: $2.340 million), less total operating expenditure of $118.680 million (2007: $99.250 million). The University Bankers includes in operating revenue all research income once received, ANZ Banking Group Limited for which there can be specific restrictions on its use. 324 Queen Street The University Council resolved to establish the Bond University Brisbane Qld 4000 Endowment Fund within the University and has allocated funds towards the establishment of the Fund.

11 DIRECTORS’ REPORT

Review of Operations (continued) A summary of the consolidated revenues and expenses is as follows: 2008 2007 $ $ Revenues

Tuition revenue – University (a) 109,177,217 89,641,559

Tuition revenue – External Programs (b) 2,461,545 2,386,129

Tuition revenue – Language Centre (c) 3,883,593 3,232,661

Tuition revenue – Bond College (d) 1,749,563 347,625

Sale of goods – food and beverages (e) 5,960,918 5,058,156

Student accommodation rent (e) 3,624,696 3,358,545

Consulting income (f) 1,127,861 1,410,351

Non-refundable student income (g) 137,573 74,542

Other student fees and charges (h) 1,000,433 983,503

Fitness centre income (i) 711,399 763,048

Student activities fee income (j) 544,989 471,938

Sundry income (k) 1,826,599 1,739,207

Interest (l) 2,910,994 1,769,215

Grants and donations (m) 10,818,883 2,339,485

145,936,263 113,575,964

Expenses

Salaries and related expenses (a) 70,823,009 58,117,115

Facilities management and maintenance (b) 6,237,865 5,591,188

Utilities and outgoings (c) 2,738,994 2,690,934

Marketing and promotional expenses (d) 8,992,011 8,897,805

Depreciation and amortisation expenses (e) 10,403,713 8,329,557

Finance costs (f) 4,378,622 3,375,115

Food and beverage cost (g) 2,191,196 1,889,118

Service fee – external programs (h) 1,308,477 1,305,451

Consumables (i) 2,111,760 1,775,990

Minor equipment (j) 1,472,471 1,449,272

Other expenses from ordinary activities (k) 8,021,971 5,828,125

118,680,089 99,249,670

Comments on the operations: Revenues (a) Tuition revenue – University Academic Purposes (EAP). There was also growth in revenue The increase was substantially attributable to strong growth from tour groups over the prior year. in continuing full degree domestic enrolments, and in particular undergraduate students. (d) Tuition revenue - Bond College Bond College commenced in 2007 and achieved strong (b) Tuition revenue – External programs growth in enrolments particularly in domestic students. Tuition revenue is derived from the Masters of Business Administration program in Japan delivered through Business (e) Sale of goods–food and beverage & Student Breakthrough Inc (BBT). accommodation rent The increase in food & beverage is substantially attributable (c) Tuition revenue – Language centre to the growth in the banquets business, and improved The University operates an English Language training centre occupancy in student accommodation. which continued to achieve growth in program enrolments, in particular the general English programs and English for

2 DIRECTORS’ REPORT

(f) Consulting income (g) Food and beverage cost of sale This is principally income generated from academic staff The increase in costs over the prior year are associated with through research consulting and by the Centre for Executive the growth in the banquet business and increase in food Education that was formally established in July 2007. costs.

(g) Non-refundable student income (h) Service fee – external programs The University has a policy of bringing into account as This is the contractual delivery cost associated with the revenue any unclaimed credit balances greater than twelve Masters of Business Administration program in Japan. months old. (i) cOnsumables (h) Other student fees and charges Consumables consist of postage, courier, stationery, printing These consist of application fees, graduation fees, course and other consumables. The increase over the prior year materials and other fees charged to students. was generally across all areas consistent with the growth of the University. (i) fitness centre income Income includes gym memberships, facilities rental and other (j) Minor equipment sporting event income. This represents purchases of minor equipment, furniture and fittings associated with new building fitout and other (j) Student activities fee income University growth and replacements. Voluntary student unionism was enacted during 2006, as a result payment of activities fees are now voluntary and (k) Other expenses increased through the growth in enrolled students. Other expenses include consultants, student events, database costs, course materials, subscriptions, professional (k) Sundry income services, rent and hire costs, bad debts expense and credit Sundry income includes language training tours, study tours, card fees and charges. The increase over the prior year was photocopying charges and rents. mostly growth related.

(l) interest SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS The treasury function of the University invests funds in Significant changes in the state of affairs of the consolidated short-term deposit cycles that support drawdowns required entity during the financial year were as follows: to meet University commitments. The increase in interest • In 2008 the University continued development and income is linked to the revenue growth and increase in cash curriculum design for the School of Hotel, Resort and reserves during the year. Tourism Management which enrolled its first students in January 2009. (m) Grants and donations • The University established a postgraduate and Executive The University discloses as part of revenue any general Education facility in the Sydney CBD. and specific purpose grants and donations received. The increase over the prior year is attributable to growth in MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL research grants, external donations and endowment funds. YEAR Subsequent to balance date, the University Council resolved Expenses to allocate $5.0 million of the University’s 2008 surplus to the (a) Salaries and related expenses Bond University Endowment Fund, which together with other Growth over the prior year, apart from merit and cost of donated funds brings the Endowment Fund to a total of $15.5 living adjustments, was associated with maintaining low million. staff to student ratios and supporting growth in full degree No other matter or circumstance has arisen since 31 December enrolments across all faculties. 2008 that has significantly affected or may significantly affect: (a) the consolidated entity’s operations in future financial years, (b) Facilities management and maintenance or This incorporates contract services for maintaining building (b) the results of those operations in future financial years, or infrastructure, landscaped areas, and other repairs and (c) the consolidated entity’s state of affairs in future financial maintenance. Additional work was undertaken during the years. year to ensure the campus is maintained to an acceptable standard. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF (c) Utilities and outgoings OPERATIONS There are no likely developments not otherwise disclosed in the These cover electrical, telecommunications, rates and accounts to report upon. insurance costs.

(d) Marketing and promotional expenses ENVIRONMENTAL REGULATION These cover travel, commissions for recruitment of students, The company is subject to environmental regulation only in promotional materials and advertising. respect to any tree clearing that may be associated with a new building site or in the case of a specialised building, the (e) Depreciation and amortisation management of medical or trade waste. The increase is attributable to new buildings, fitout and technology infrastructure under finance lease.

(f) Finance costs There has been an increase in debt financing costs associated with new building construction finance and includes lease financing interest for technology infrastructure.

3 DIRECTORS’ REPORT

INFORMATION ON DIRECTORS

Director Experience Special Responsibilities

Chairman – non-executive T C Rowe AM Independent non-executive director and Chairman for six years. Chancellor and Chairman CA, CPA, FCIS, FAICD Extensive global investment and banking experience. Chairman of Alumni Committee Chairman of Rothschild Australia Limited. Chairman of Finance Committee Chairman of Queensland Investment Corporation. Member of Nominations Advisory Chairman of Queensland BioCapital Fund Limited. Committee Director of Australian Securities Exchange Chairman of United Group Limited. Chairman of GoTalk Limited. Chairman of Enhance Management Pty Ltd. Chairman of RSPCA Queensland Building Fund. Chairman of Careers Australia Group Ltd. Director of CRI Asset Management. Member of the Board of Guardians of the Australian Government Future Fund. Member of the Royal Flying Doctors Friends Committee. Member of the Commonwealth of Australia’s Foreign Affairs Council – 2000-2007.

Executive director R Stable Executive director and Vice-Chancellor for five years. Vice-Chancellor and President MBBS (Qld), MHP (NSW), Former chairman of Australian Rural and Remote Workforce Member of Alumni Committee DUni (QUT), FRACGP, Agencies Group. Member of Finance Committee FRACMA, FAICD

Non-executive directors G Bugden OAM Non-executive director for six years. Deputy Chancellor DUniv Griff., DipL, MAICD Currently a consultant lawyer and former partner of Mallesons Chairman of Nominations Stephen Jaques, specialising in property law. Advisory Committee Chairman of Purchasers Strata Inspections Pty Ltd. Chairman of MyStrata Pty Ltd. Chairman of Integrated Strata Solutions Pty Ltd. Director of MyStrata Holdings Pty Ltd. Director of Bugden R&D Pty Ltd. Director of Nitarae Nominees Pty Ltd.

B Chow AO Non-executive director for four years. BEng Syd. Civil engineer and property development consultant. Director of Sydney Subdivision Pty Ltd. Director of Trenton Developments Pty Ltd. Director of Jabroo Investments Pty Ltd. Director of Chain Reaction Foundation Ltd. Director of InvoCare Ltd. Council member of the National Museum of Australia. President of Sydney University Nerve Research Foundation. Trustee of Australian Chinese Charity Foundation Inc. Council Member of Australian Chinese Community Association of NSW.

P Fielding Non-executive director for one year. Member of Alumni Committee BA LLB Bond, Corporate Lawyer. MBA UH/JAIMS Co-founder and CEO of Burleigh Brewing Company.

D Gibson AO Non-executive director for four years. Member of Audit & Risk BSc Hull, MSc Newcastle (UK), Chancellor of RMIT University. Management Committee PhD Newcastle (UK), Chairman of M&MD Pty Ltd. DSc CNAA, Chairman of QID Pty Ltd. DUniv Sunshine Coast, Chairman of RDDT Ltd. DUniv QUT, FAICD, FTSE Director of RMIT Vietnam Holdings.

4 DIRECTORS’ REPORT

Director Experience Special Responsibilities

K Greiner AO Non-executive director for five years. Member of Nominations Advisory BSW (UNSW), MAICD Strong background in local government, former Councillor of the Committee City of Sydney, broad interests in education and training. Member of Alumni Committee Chair of Bio Tech Capital. Chair of Australian Hearing. Chair of Bell Shakespeare Foundation. Director of Gabane Pty Ltd. Member of National Capital Authority.

B Morris Non-executive director for five years Chairman of Audit & Risk BCom Qld, FCA, FAICD Chartered Accountant and former partner of KPMG, director of Management Committee publicly-listed companies, government and charitable Member of Finance Committee organisations. Strong interests in risk management, corporate governance and strategy development. Director of Spotless Group Ltd. Director of Queensland Investment Corporation. Director of Care Australia. Director of Brisbane Marketing Pty Ltd. Director of The Royal Automobile Club of Queensland. Director of The Brisbane Club. Director of Taylors Group Ltd. Member of the Advisory Council of Parsons Brinckerhoff Australia. Former Chair of Queensland Rail.

T Ray Non-executive director for one year. Member of Audit & Risk BComn(Bus) Bond Chief Executive Officer for the Ray Group. Management Committee Director of Banksford Pty Ltd. Member of Nominations Advisory Director of Brentwood Projects Pty Ltd. Committee Director of Cabbala Pty Ltd. Director of Calypso Plaza Pty Ltd. Director of Central Park (Salt) Pty Ltd. Director of Cheka Pty Ltd. Director of Cosmic Echo Pty Ltd. Director of Courthouse Hotel Cairns Pty Ltd. Director of Eastlink Projects Pty Ltd. Director of Gaffer Pty Ltd. Director of Glenloch Pty Ltd. Director of Kingscliff South Pty Ltd. Director of Mastmere Pty Ltd. Director of Moonshadowz Pty Ltd. Director of Naughty Noodles Pty Ltd. Director of NNR Pty Ltd. Director of Port Douglas Developments Pty Ltd. Director of Project & Event Marketing Pty Ltd. Director of Ray Family Investments Pty Ltd. Director of Ray Group Alpine Developments Pty Ltd. Director of Ray Group Management Pty Ltd. Director of Ray Group Mirage Pty Ltd. Director of Ray Group Properties Pty Ltd. Director of Ray Group Pty Ltd. Director of Ray Group Real Estate Pty Ltd. Director of Ray Group Salt Pty Ltd. Director of Ray Management Pty Ltd. Director of RDC Pty Ltd. Director of S1 Developments Pty Ltd. Director of Salt Bar (NSW) Pty Ltd. Director of Salt Developments Pty Ltd. Director of Salt Holdings (NSW) Pty Ltd. Director of Salt Retail Pty Ltd. Director of South Kingscliff Developments Pty Ltd. Director of Sports & Leisure Consulting Pty Ltd. Director of Xebec Holdings Pty Ltd. Director of Xebec Securities Pty Ltd.

Company Secretary The company secretary is Mr Alan Finch BA Melb, FAIM. Mr Finch was appointed to the position of company secretary in 1996. He is employed by Bond University as the Registrar. 5 DIRECTORS’ REPORT

Meetings of Directors The numbers of meetings of the company’s board of directors and of each board committee held during the year ended 31 December 2008, and the numbers of meetings attended by each director were:

Full Meetings of Meetings of Committee Directors

Nominations Advisory Audit and Risk Management Alumni Committee Committee Committee

No. of Mtgs No. of Mtgs No. of Mtgs No. of Mtgs No. of Mtgs No. of Mtgs No. of Mtgs No. of Mtgs Held * Attended Held * Attended Held * Attended Held * Attended T Rowe 7 7 4 4 1 1 ** **

R Stable 7 7 4 4 ** ** ** **

G Bugden*** 7 1 ** ** 1 0 1 0 N Balnaves (retired 23 3 3 ** ** ** ** 2 1 May 2008) B Chow 7 7 ** ** ** ** ** ** P Fielding (appointed 4 4 3 3 ** ** ** ** 23 May 2008) D Gibson 7 6 ** ** ** ** 5 5

K Greiner 7 5 4 4 1 1 ** ** I Kortlang (retired 23 3 1 ** ** ** ** ** ** May 2008) B Morris 7 5 ** ** ** ** 5 5 T Ray (appointed 4 3 ** ** 1 0 3 2 23 May 2008)

*Number of meetings held during the time the director held office or was a member of the committee during the year **Not a member of the relevant committee ***The University Council granted formal leave of absence for meetings in 2008.

All committees have one or more independent members that are not members of the board of directors.

A finance committee was established during January 2009.

Insurance of Officers Auditor The company has entered into an agreement with its insurer PricewaterhouseCoopers continues in office in accordance to insure all directors of the company including executive with section 327 of the Corporations Act 2001. officers of the company and its controlled entities and independent members of committees. A copy of the auditors’ independence declaration as required The liabilities insured are legal costs that may be incurred under section 307C of the Corporations Act 2001 is set out in defending civil or criminal proceedings that may be on the next page. brought against the officers in their capacity as directors or executive officers or independent members of committees of This report is made in accordance with a resolution of the entities in the consolidated entity, and any other payments directors. arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty or the improper use of inside information or position to gain advantage or to cause detriment to the company. Disclosure of the amount of premium paid is prohibited under the terms of the insurance contract.

T C Rowe Director and Chancellor Brisbane 17 April 2009

6 DIRECTORS’Page 11 REPORT

PricewaterhouseCoopers ABN 52 780 433 757

Riverside Centre 123 Eagle Street BRISBANE QLD 4000 GPO Box 150 BRISBANE QLD 4001 DX 77 Brisbane Australia www.pwc.com/au Telephone +61 7 3257 5000 Auditors’ Independence Declaration Facsimile +61 7 3257 5999

As lead auditor for the audit of Bond University Limited for the year ended 31 December 2008, I declare that to the best of my knowledge and belief, there have been: a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Bond University Limited and the entities it controlled during the period.

M Linz Partner PricewaterhouseCoopers

Brisbane 17 April 2009

Liability is limited by a scheme approved under Professional Standards Legislation.

7

Financial Report 31 December 2008

CONTENTS

Page Financial report Income Statements 9 Balance Sheets 10 Statements of Recognised Income and Expense 11 Cash flow Statements 12 Notes to the financial statements 13 Directors’ declaration 36 Independent auditor’s report to the members 37

This financial report covers both Bond University Limited as an individual entity and the consolidated entity consisting of Bond University Limited and its controlled entities. The financial report is presented in Australian currency.

Bond University Limited is a company limited by guarantee, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Bond University Limited Level 6, The Arch Bond University Qld 4229

A description of the nature of the consolidated entity’s operations and its principal activities is included in the directors’ report on pages 2-5, which is not part of this financial report.

The financial report was authorised for issue by the directors on 17 April 2009. The company has the power to amend and reissue the financial report.

8 INCOME STATEMENTS FOR THE YEAR ENDED

INCOME STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2008 31 DECEMBER 2008

Consolidated Parent Entity 2008 2007 2008 2007

Notes $ $ $ $

Revenue from continuing operations 3 135,117,380 111,236,330 130,012,204 106,726,758

Salaries and related expenses 70,823,009 58,117,115 62,727,896 35,079,077

Facilities management and maintenance 6,237,865 5,591,188 5,499,676 4,965,464

Utilities and outgoings 2,738,994 2,690,934 2,298,917 2,328,202

Marketing and promotional expenses 8,992,011 8,897,805 8,735,730 8,757,586

Depreciation and amortisation expenses 5 10,403,712 8,329,557 10,399,924 8,327,751

Finance costs 5 4,378,622 3,375,115 4,378,622 3,375,115

Food and beverage cost – Conference Centre 2,191,196 1,889,118 - -

Service fee – external programs 1,308,477 1,305,451 1,308,477 1,305,451

Consumables 2,111,760 1,775,990 1,811,375 1,478,890

Minor equipment 1,472,471 1,449,272 1,317,317 1,321,533

Management fees - - 8,010,086 20,520,632

Other expenses from ordinary activities 8,021,971 5,828,125 7,356,366 5,544,738

Profit from operations 16,437,292 11,986,660 16,167,818 13,722,319

Other income 4 10,818,883 2,339,634 9,057,987 2,339,634

Profit before income tax 27,256,175 14,326,294 25,225,805 16,061,953

Income tax expense 1(e) - - - -

Profit for the year 27,256,175 14,326,294 25,225,805 16,061,953

As a not-for-profit University, the profit for the year is for reinvestment back into the University.

The above income statements should be read in conjunction with the accompanying notes.

9 BALANCE SHEETS AS AT 31 DECEMBER 2008

BALANCE SHEETS AS AT 31 DECEMBER 2008

Consolidated Parent Entity

2008 2007 2008 2007

Notes $ $ $ $ ASSETS

CURRENT ASSETS

Cash and cash equivalents 6 44,788,334 26,760,590 37,426,025 20,928,216

Receivables 7 13,889,240 6,078,726 13,716,363 5,868,312

Inventories 8 111,559 78,362 - - Other financial assets at fair value 9 239,006 5,319 2,601 5,319 through profit or loss TOTAL CURRENT ASSETS 59,028,139 32,922,997 51,144,989 26,801,847

NON-CURRENT ASSETS

Available-for-sale financial assets 10 11,000 11,000 11,000 11,000

Derivative financial instruments 11 - 1,964,698 - 1,964,698

Other financial assets 12 - - 13 9

Property, plant and equipment 13 118,227,727 102,308,915 118,180,821 102,292,405

Intangible assets 14 1,011,128 375,824 1,011,128 375,824

TOTAL NON-CURRENT ASSETS 119,249,855 104,660,437 119,202,962 104,643,936 TOTAL ASSETS 178,277,994 137,583,434 170,347,951 131,445,783

LIABILITIES

CURRENT LIABILITIES

Payables 15 14,471,973 11,703,491 14,515,456 13,598,555

Borrowings 16 4,751,427 2,195,314 4,751,427 2,195,314

Provisions 17 2,729,917 2,513,646 2,729,917 1,012,021

Other 18 12,247,745 10,668,159 10,592,743 9,124,851 TOTAL CURRENT LIABILITIES 34,201,062 27,080,610 32,589,543 25,930,741

NON-CURRENT LIABILITIES

Borrowings 19 53,839,516 45,968,514 53,839,516 45,968,514

Derivative financial instruments 11 5,020,506 - 5,020,506 -

Provisions 20 1,669,443 1,257,814 1,669,443 558,186 TOTAL NON-CURRENT LIABILITIES 60,529,465 47,226,328 60,529,465 46,526,700

TOTAL LIABILITIES 94,730,527 74,306,938 93,119,008 72,457,441

NET ASSETS 83,547,467 63,276,496 77,228,943 58,988,342

EQUITY

Contributed equity 21 - - - -

Reserves 22(a) (5,020,506) 1,964,698 (5,020,506) 1,964,698

Retained profits 22(b) 88,567,973 61,311,798 82,249,449 57,023,644

TOTAL EQUITY 83,547,467 63,276,496 77,228,943 58,988,342

The above balance sheets should be read in conjunction with the accompanying notes. 10

STATEMENTS OF RECOGNISED INCOME AND EXPENSE

STATEMENTS OF RECOGNISED INCOME AND EXPENSEFOR THE YEAR ENDED 31 DECEMBER 2008 FOR THE YEAR ENDED 31 DECEMBER 2008

Consolidated Parent Entity 2008 2007 2008 2007 Notes $ $ $ $

Total equity at the beginning of the financial year 63,276,496 46,593,319 58,988,342 40,569,506

Changes in the value of cash flow hedges, net of tax 22 (6,985,204) 2,356,883 (6,985,204) 2,356,883

Net income recognised directly in equity (6,985,204) 2,356,883 (6,985,204) 2,356,883

Profit for the year 27,256,175 14,326,294 25,225,805 16,061,953

Total recognised income and expense for the year 20,270,971 16,683,177 18,240,601 18,418,836

Total equity at the end of the financial year 83,547,467 63,276,496 77,228,943 58,988,342

The above statements of recognised income and expense should be read in conjunction with the accompanying notes.

11 CASH FLOW STATEMENTS

CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2008 FOR THE YEAR ENDED 31 DECEMBER 2008

Consolidated Parent Entity 2008 2007 2008 2007

Notes $ $ $ $

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (inclusive of goods and services tax) 143,242,442 115,529,253 126,418,741 102,463,403 Receipts on behalf of controlled entities (inclusive of goods and services tax) - - 7,932,666 7,295,890 Payments to suppliers and employees (inclusive of goods and services tax) (108,487,711) (94,393,875) (90,542,944) (66,050,517) Payments on behalf of controlled entities (inclusive of goods and services tax) - - (12,210,871) (20,974,327)

Interest received 3,284,607 1,768,789 2,785,506 1,492,490

Interest paid (3,993,842) (3,955,756) (3,993,842) (3,955,756)

Net cash inflow from operating activities 28 34,045,496 18,948,411 30,389,256 20,271,183

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment (25,152,338) (21,450,433) (25,118,154) (21,432,581)

Payments for intangible assets (906,449) (266,626) (906,449) (266,626) Payments for other financial assets at fair value through profit or loss (8,000) (28,405) - (28,405) Loan repaid by (advanced to) Bond University Foundation 29,250 (24,231) 29,250 (24,231) Proceeds from sale of other financial assets at fair value through profit or loss - 29,721 0 29,721 Proceeds from sale of property, plant and equipment 1,447,756 341,828 1,447,756 337,374

Net cash outflow from investing activities (24,589,781) (21,398,146) (24,547,597) (21,384,748)

CASH FLOWS FROM FINANCING ACTIVITIES

Advances to controlled entities - - (1,708,226) (3,665,054)

Repayment from controlled entities - - 4,000,000 -

Proceeds from borrowings 10,487,827 10,624,673 10,487,827 10,624,673

Repayment of borrowings - - - -

Repayment of lease liabilities (2,455,693) (2,195,969) (2,455,693) (2,195,969) Net cash inflow/(outflow) from financing activities 8,032,134 8,428,704 10,323,908 4,763,650

Net Increase/(Decrease) in cash and cash equivalents 17,487,849 5,978,969 16,165,567 3,650,085

Cash at the beginning of the financial year 22,270,397 16,291,428 17,716,381 14,066,296 Cash and cash equivalents at the end of the financial year 6 39,758,246 22,270,397 33,881,948 17,716,381

19 Financing arrangements

Non-cash investing and financing activities 29

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

12 CONTENTS OF THE NOTES TO THE FINANCIAL STATEMENTS Page 1 Summary of Significant Accounting Policies 14 2 Financial Risk Management 18 3 Revenue 18 4 Other Income 19 5 Expenses 19 6 Current Assets – Cash and cash equivalents 20 7 Current Assets – Receivables 21 8 Current Assets – Inventories 21 9 Current Assets – Other financial assets at fair value through profit or loss 22 10 Non-current Assets – Available-for-sale Financial Assets 22 11 Non-current Assets – Derivative financial instruments 22 12 Non-current Assets – Other Financial Assets 22 13 Non-current Assets – Property, Plant and Equipment 23 14 Non-current Assets – Intangible Assets 25 15 Current Liabilities – Payables 25 16 Current Liabilities – Borrowings 26 17 Current Liabilities – Provisions 26 18 Current Liabilities – Other 26 19 Non-current Liabilities – Borrowings 26 20 Non-current Liabilities – Provisions 30 21 Contributed Equity 30 22 Reserves and Retained Profits 30 23 Remuneration of Auditors 31 24 Contingencies 31 25 Commitments 31 26 Related Party Transactions 32 27 Subsidiaries 34 28 Reconciliation of Profit after Income Tax to Net Cash Inflow from Operating Activities 34 29 Non-cash Investing and Financing Activities 35 30 Events Occurring After the Balance Sheet Date 35

13 NOTES TO THE FINANCIAL STATEMENTS 31 December 2008

Note 1. Summary of Significant Accounting (d) Revenue Recognition Policies Revenue is measured at the fair value of the consideration The principal accounting policies adopted in the preparation received or receivable. Amounts disclosed as revenue are net of of the financial report are set out below. These policies have returns, trade allowances and duties and taxes paid. Revenue is been consistently applied to all the years presented, unless recognised for the major business activities as follows: otherwise stated. The financial report includes separate · Tuition and student food and accommodation revenue are financial statements for Bond University Limited as an individual recognised monthly as the services are provided to students. entity and the consolidated entity consisting of Bond University Tuition revenue is net of financial aid provided to students by Limited and its subsidiaries. the University. · Other food and beverage income is recognised upon provision (a) Basis of Preparation to customers. This general purpose financial report has been prepared in · Interest revenue is recognised using the effective interest accordance with Australian Accounting Standards, other method. authoritative pronouncements of the Australian Accounting · Donations and government grants are recognised as income Standards Board, Urgent Issues Group Interpretations and the when received. Corporations Act 2001. Australian Accounting Standards include · Other income is recognised when the service is provided. Australian equivalents to International Financial Reporting It is the University’s policy to recognise as revenue non- Standards (AIFRS). refundable student tuition income.

Historical Cost Convention (e) Income Tax These financial statements have been prepared under the The Company, Bond University Limited, and its controlled historical cost convention, as modified by the revaluation of entities, Bond University Staff Services Pty Ltd, Bond University financial assets and liabilities (including derivative instruments) Services Pty Ltd, Campus Operations Pty Limited, Lashkar at fair value. Pty Limited, Themis Pty Ltd and Bond University Trust are exempt from income tax under section 50-5 of the Income Tax (b) Principles of Consolidation Assessment Act 1997. The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Bond University Limited (f) Leases (“company” or “parent entity”) as at 31 December 2008 and Leases of property, plant and equipment where the Group has the results of all subsidiaries for the year then ended. Bond substantially all the risks and rewards of ownership are classified University Limited and its subsidiaries together are referred to in as finance leases (note 13). Finance leases are capitalised at this financial report as the Group or the consolidated entity. The the lease’s inception at the lower of the fair value of the leased Bond University Trust has been included as a subsidiary of Bond property and the present value of the minimum lease payments. University Limited. The corresponding rental obligations, net of finance charges, are included in other short-term and long-term payables. Each Subsidiaries are all those entities (including special purpose lease payment is allocated between the liability and the finance entities) over which the Group has the power to govern the cost. The finance cost is charged to the income statement over financial and operating policies, generally accompanying a the lease period so as to produce a constant periodic rate of shareholding of more than one-half of the voting rights. The interest on the remaining balance of the liability for the period. existence and effect of potential voting rights that are currently The property, plant and equipment acquired under finance lease exercisable or convertible are considered when assessing is depreciated over the shorter of the asset’s useful life and the whether the Group controls another entity. lease term.

Subsidiaries are fully consolidated from the date on which Leases in which a significant portion of the risks and rewards of control is transferred to the Group. They are de-consolidated ownership are retained by the lessor are classified as operating from the date that control ceases. leases (note 25). Payments made under operating leases (net of any incentives received from the lessor) are charged to the Intercompany transactions, balances and unrealised gains income statement on a straight-line basis over the period of the on transactions between Group companies are eliminated. lease. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the assets transferred. (g) Acquisition of Assets Accounting policies of subsidiaries have been changed where The purchase method of accounting is used for all acquisitions of necessary to ensure consistency with the policies adopted by the assets regardless of whether equity instruments or other assets Group. are acquired. Cost is measured as the fair value of the assets given or liabilities incurred or assumed at the date of exchange (c) Foreign Currency Translation plus costs directly attributable to the acquisition. (i) Functional and presentation currency Items included in the financial statements of each of the (h) Impairment of Assets Group’s entities are measured using the currency of the primary Assets are reviewed for impairment whenever events or changes economic environment in which the entity operates (‘the in circumstances indicate that the carrying amount may not be functional currency’). The consolidated financial statements recoverable. An impairment loss is recognised for the amount are presented in Australian dollars, which is Bond University by which the asset’s carrying amount exceeds its recoverable Limited’s functional and presentation currency. amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of (ii) Transactions and balances assessing impairment, assets are grouped at the lowest levels Foreign currency transactions are translated into the functional for which there are separately identifiable cash inflows which currency using the exchange rates prevailing at the dates of the are largely independent of the cash inflows from other assets or transactions. Foreign exchange gains and losses resulting from groups of assets (cash-generating units). the settlement of such transactions are recognised in the income statement.

14 NOTES TO THE FINANCIAL STATEMENTS 31 December 2008

(i) Cash and Cash Equivalents are presented in the income statement within other income Cash and cash equivalents include cash on hand, deposits held or other expenses in the period in which they arise. Dividend at call with financial institutions and other short-term, highly income from financial assets at fair value through profit or liquid investments with original maturities of three months or loss is recognised in the income statement as part of revenue less that are readily convertible to known amounts of cash and from continuing operations when the Group’s right to receive which are subject to an insignificant risk of changes in value. For payments is established. the purposes of the cash flows statement, cash excludes monies held in trust. Changes in the fair value of other monetary and non-monetary securities classified as available-for-sale are recognised in (j) Trade Receivables equity. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for Fair Value doubtful debts. Trade receivables are due for settlement no The fair value of quoted investments are based on current bid more than 30 days from the date of recognition. prices.

Collectibility of trade receivables is reviewed on an ongoing Impairment basis. Debts which are known to be uncollectible are written off. The Group assesses at each balance date whether there is A provision for doubtful receivables is established when there is objective evidence that a financial asset or group of financial objective evidence that the Group will not be able to collect all assets is impaired. In the case of equity securities classified as amounts due according to the original terms of receivables. The available-for-sale, a significant or prolonged decline in the fair amount of the provision is recognised in the income statement. value of a security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists (k) Inventories for available-for-sale financial assets, the cumulative loss – Food, beverages and general stores stock are stated at the lower measured as the difference between the acquisition cost and of cost and net realisable value. Costs are assigned to inventory the current fair value, less any impairment loss on that financial quantities on hand at balance date on the basis of weighted asset previously recognised in profit or loss – is removed from average cost. equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments (l) investments and other Financial Assets classified as available-for-sale are not reversed through the Classification income statement. The Group classifies its investments in the following categories: financial assets at fair value through profit or loss and available- (m) Derivatives for-sale financial assets. The classification depends on the Derivatives are initially recognised at fair value on the date purpose for which the investments were acquired. Management a derivative contract is entered into and are subsequently determines the classification of its investments at initial remeasured to their fair value at each reporting date. The recognition. accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, (i) Financial assets at fair value through profit or loss and if so, the nature of the item being hedged. The Group Financial assets at fair value through profit or loss are financial designated its derivative as a hedge of highly probable forecast assets held for trading. A financial asset is classified in this transactions (cash flow hedge). category if acquired principally for the purpose of selling in the short term. Assets in this category are classified as current The Group documents at the inception of the transaction assets. the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy (ii) Available-for-sale financial assets for undertaking various hedge transactions. The Group also Available-for-sale financial assets, comprising principally documents its assessment, both at hedge inception and on marketable equity securities, are non-derivatives that are either an ongoing basis, of whether the derivatives that are used in designated in this category or not classified in any of the other hedging transactions have been and will continue to be highly categories. They are included in non-current assets unless effective in offsetting changes in fair values or cash flows of management intends to dispose of the investment within 12 hedged items. months of the balance sheet date. The fair values of various derivative financial instruments used Recognition and Derecognition for hedging purposes are disclosed in note 11. Movements in the Regular purchases and sales of financial assets are recognised hedging reserve in equity are shown in note 22. The full fair on trade-date – the date on which the Group commits to value of a hedging derivative is classified as a non-current asset purchase or sell the asset. Investments are initially recognised or liability when the remaining maturity of the hedged item is at fair value plus transaction costs for all financial assets not more than 12 months; it is classified as a current asset or liability carried at fair value through profit or loss. Financial assets when the remaining maturity of the hedged item is less than 12 carried at fair value through profit or loss are initially recognised months. at fair value and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

Subsequent Measurement Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category

15 NOTES TO THE FINANCIAL STATEMENTS 31 December 2008

Cash flow hedge (p) Intangible Assets The effective portion of changes in the fair value of derivatives Computer software has a finite useful life and are carried at that are designated and qualify as cash flow hedges is cost less accumulated amortisation. Amortisation is calculated recognised in equity in the hedging reserve. The gain or loss using the straight line method to allocate the cost of computer relating to the ineffective portion is recognised immediately in software over their estimated useful life of 3 years. the income statement. (q) Trade and Other Payables Amounts accumulated in equity are recycled in the income These amounts represent liabilities for goods and services statement in the periods when the hedged item will affect provided to the consolidated entity prior to the end of the profit or loss. The gain or loss relating to the effective portion financial year which are unpaid. The amounts are unsecured and of interest rate swaps hedging variable rate borrowings is are usually paid within 30 days of recognition. recognised in the income statement within ‘finance costs’. (r) Borrowings When a hedging instrument expires or is sold or terminated, Borrowings are initially recognised at fair value, net of or when a hedge no longer meets the criteria for hedge transaction costs incurred. Borrowings are subsequently accounting, any cumulative gain or loss existing in equity at measured at amortised cost. Any difference between the that time remains in equity and is recognised when the forecast proceeds (net of transaction costs) and the redemption amount transaction is ultimately recognised in the income statement. is recognised in the income statement over the period of the When a forecast transaction is no longer expected to occur, borrowings using the effective interest method. the cumulative gain or loss that was reported in equity is immediately transferred to the income statement. Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled (n) Fair Value Estimation or expired. The difference between the carrying amount of a The fair value of financial assets and financial liabilities must be financial liability that has been extinguished or transferred to estimated for recognition and measurement or for disclosure another party and the consideration paid, including any non-cash purposes. assets transferred or liabilities assumed, is recognised in other income or other expenses. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) Borrowings are classified as current liabilities unless the Group is determined using valuation techniques. The fair value of has an unconditional right to defer settlement of the liability for interest-rate swaps is calculated as the present value of the at least 12 months after the balance sheet date. estimated future cash flows. (s) Borrowing costs The carrying value less impairment provision of trade receivables Borrowing costs are expensed in the period to which they relate. and payables are assumed to approximate their fair values due Any prepayment of interest is recorded as part of current to their short-term nature. receivables.

(o) Property, Plant and Equipment Borrowing costs for the consolidated entity include interest on All property, plant and equipment are stated at historical cost long-term borrowings and finance lease charges. less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

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

Land and artworks are not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows:

Buildings 10-50 years Computer Equipment 3 years Other Plant and Equipment 5 years Furniture and Fitout 5 years Library Books and Journals 5 years Motor vehicles 5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 1(h)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement.

16 NOTES TO THE FINANCIAL STATEMENTS 31 December 2008

(t) Employee benefits 2008 reporting periods. The Group’s and the parent entity’s (i) Wages and Salaries, Annual Leave and Sick Leave assessment of the impact of these new standards and Liabilities for wages and salaries, including non-monetary interpretations is set out below. benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in (i) Revised AASB 123 Borrowing Costs and AASB 2007-6 respect of employees’ services up to the reporting date and are Amendments to Australian Accounting Standards arising from measured at the amounts expected to be paid when the liabilities AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & are settled. Liabilities for sick leave are recognised when the AASB 138 and Interpretations 1 & 12] leave is taken and measured at the rates paid or payable. The revised AASB 123 is applicable to annual reporting periods (ii) Long Service Leave commencing on or after 1 January 2009. It has removed the The liability for long service leave is recognised in the provision option to expense all borrowing costs and - when adopted - for employee benefits and measured as the present value of will require the capitalisation of all borrowing costs directly expected future payments to be made in respect of services attributable to the acquisition, construction or production of a provided by employees up to the reporting date. Consideration qualifying asset. The Group intends to apply the revised AASB is given to expected future wage and salary levels, experience 123 from 1 January 2009. of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting (ii) Revised AASB 101 Presentation of Financial Statements and date on national government bonds with terms to maturity and AASB 2007-8 Amendments to Australian Accounting Standards currency that match, as closely as possible, the estimated future Arising from AASB 101. cash outflows. A revised AASB 101 was issued in September 2007 and is (iii) Retirement benefit obligations applicable to annual reporting periods beginning on or after 1 All employees of the Group are entitled to benefits on January 2009. It requires the presentation of a statement of retirement, disability or death from the Group’s superannuation comprehensive income and makes changes to the statement plan. The Group has a defined contribution plan that receives of changes in equity but will not affect any of the amounts fixed contributions from Group companies and the Group’s legal recognised in the financial statements. If the entity has made or constructive obligation is limited to these contributions. a prior period adjustment or has reclassified items in the Contributions to the defined contribution fund are recognised as financial statements, it will need to disclose a third balance an expense as they become payable. sheet (statement of financial position), this one being as at the beginning of the comparative period. The Group intends to apply (u) New accounting standards and interpretations the revised standard from 1 January 2009. Certain new accounting standards and interpretations have been published that are not mandatory for 31 December

17 NOTES TO THE FINANCIAL STATEMENTS 31 December 2008

N ote 2. Financial Risk Management (b) Liquidity risk The Group’s activities expose it to a variety of financial risks; Prudent liquidity management implies maintaining sufficient creditNOTES risk, TO liquidity THE FINANCIAL risk and cash STATEMENTS flow interest rate risk. The cash and the availability of funding through an adequate amount Group’s31 December overall 200 risk8 management (continued) program focuses on the of committed credit facilities. predictabilityNOTE 2. FINANCIAL of financial RISK markets MANAGEMENT and seeks (continued)to minimise potential adverse effects on the financial performance of the (c) Cash flow risk Group.Risk management The Group usesis carried derivative out under financial principles instruments approved such by asthe BoardThe Group’sof Directors. cash rate Management risk arises identifies, from movements evaluates in andinterest interesthedges financialrate swaps risks. to hedge certain risk exposures. rates on long-term borrowings. Borrowings issued at variable (a) Credit risk rates expose the Group to cash flow interest-rate risk. The Group Risk management is carried out under principles approved by manages its cash flow interest-rate risk by using floating-to-fixed The Group has no significant concentrations of credit risk. Tuitioninterest and rate accommodation swaps. Such interest fees are rate payable swaps in have advance the economic for the Boardeach of Directors.semester. Management Fee-Help revenue identifies, is received evaluates from andthe Department of Education, Employment and Workplace Relations hedges financialon a fortnightly risks. basis throughout the year. effect of converting borrowings from floating rates to fixed rates. Generally, the Group raises long term borrowings at floating (a) CreditIn riskrespect to cash balances including bank deposits, the Universityrates and has swaps considered them intoand fixedis satisfied rates withthat theare lowercredit thanrating those of its banker. The Group has no significant concentrations of credit risk. available to the Group borrowed at fixed rates directly. Under Tuition(b) andLiquidity accommodation risk fees are payable in advance for each the interest-rate swap, the Group agrees to exchange, quarterly, the difference between fixed contract rates and floating-rate semester.Prudent Fee-H elpliquidity revenue management is received implies from the maintaining Department sufficient of cash and the availability of funding through an adequate Education,amount Employment of committed and Workplace credit facilities. Relations on a fortnightly interest amounts calculated by reference to the agreed notional basis throughout the year. principal amounts. (c) Cash flow risk The Group’s cash rate risk arises from movements in interest rates on long-term borrowings. Borrowings issued at In respectvariable to cash rates balances expose including the Group bank to deposits, cash flow the interest -rate risk. The Group manages its cash flow interest-rate risk by Universityusing has floating considered-to-fixed and isinterest satisfied rate with swaps. the creditSuch interestrating rate swaps have the economic effect of converting borrowings of its banker.from floating rates to fixed rates. Generally, the Group raises long term borrowings at floating rates and swaps them into fixed rates that are lower than those available to the Group borrowed at fixed rates directly. Under the interest-rate swap, the Group agrees to exchange, quarterly, the difference between fixed contract rates and floating-rate interest amounts calculated by reference to the agreed notional principal amounts.

NNOTEote 3. REVENUErevenue

Consolidated Parent Entity

2008 2007 2008 2007

$ $ $ $

FROM CONTINUING OPERATIONS

Sales Revenue

Tuition revenue – University 109,177,217 89,641,559 109,177,217 89,641,559

Tuition revenue – External Programs 2,461,545 2,386,129 2,461,545 2,386,129

Tuition revenue – Language Centre 3,883,593 3,232,661 - -

Tuition revenue – Bond College 1,749,563 347,625 1,749,563 347,625

Sale of goods – food and beverages 5,960,918 5,058,156 - -

Student accommodation rent 3,624,696 3,358,545 - -

Consulting income 1,127,861 1,410,351 1,127,861 1,410,351

Non-refundable student income 137,573 74,542 137,573 74,542

Other student fees and charges 1,000,433 983,503 745,121 716,835

Fitness centre income 711,399 763,048 - -

Student activities fee income 544,989 471,938 544,989 471,938

Sundry income 1,826,599 1,739,058 1,089,731 1,410,351

132,206,386 109,467,115 117,033,600 96,459,330

Other Revenue

Interest 2,910,994 1,769,215 2,411,892 1,492,490

Management fee - - 10,566,712 8,774,938

135,117,380 111,236,330 130,012,204 106,726,758

Tuition revenue is net of scholarships provided by the University to students which amounted to $9,769,050 in 2008 and $7,318,517 in 2007.

18

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 (continued) NOTE 4. OTHER INCOME

NOTE 4. OTHER INCOME

Consolidated Parent Entity NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 (continued) 2008 2007 2008 2007

$ $ $ $ NOTE 4. OTHER INCOME Fair value gain on other financial assets at fair value through profit or loss Consolidated- 149 Parent- Entity 149 Grants and donations 10,818,8832008 2,339,4852007 9,057,9872008 2,339,4852007 10,818,883$ 2,339,634$ 9,057,987$ 2,339,634$

Fair value gain on other financial assets at

NfairOTE value 5. EXPENSES through profit or loss - 149 - 149 Grants and donations 10,818,883 2,339,485 9,057,987 2,339,485 PROFIT FOR THE YEAR INCLUDES THE 10,818,883 2,339,634 9,057,987 2,339,634 FOLLOWING SPECIFIC EXPENSES: NOTE 5. EXPENSES

NOTE 5. EXPENSES Depreciation

PROFIT Buildings FOR THE YEAR INCLUDES THE 3,440,719 2,278,318 3,440,719 2,278,318 FOLLOWING SPECIFIC EXPENSES: Plant and equipment 1,097,220 743,975 1,093,432 742,632

Furniture and fitout 2,835,919 2,081,037 2,835,919 2,080,574 Depreciation Motor vehicles 551 - 551 - Buildings 3,440,719 2,278,318 3,440,719 2,278,318 Library 826,282 870,502 826,282 870,502 Plant and equipment 1,097,220 743,975 1,093,432 742,632 Total depreciation 8,200,691 5,973,832 8,196,903 5,972,026 Furniture and fitout 2,835,919 2,081,037 2,835,919 2,080,574 Amortisation Motor vehicles 551 - 551 - Plant and equipment under finance leases 1,561,531 1,466,772 1,561,531 1,466,772 Library 826,282 870,502 826,282 870,502 Motor vehicles under finance leases 370,345 414,796 370,345 414,796 Total depreciation 8,200,691 5,973,832 8,196,903 5,972,026 Computer software 271,145 474,157 271,145 474,157 Amortisation Total amortisation 2,203,021 2,355,725 2,203,021 2,355,725 Plant and equipment under finance leases 1,561,531 1,466,772 1,561,531 1,466,772

Finance Motor costs vehicles under finance leases 370,345 414,796 370,345 414,796 Interest and finance charges paid/payable 4,378,622 3,375,115 4,378,622 3,375,115 Computer software 271,145 474,157 271,145 474,157 Net loss on sale of other financial assets at - 1,585 - 1,585 fairTotal value amortisation through profit or loss 2,203,021 2,355,725 2,203,021 2,355,725

FinanceNet loss costson disposal of property, plant and equipment 48,184 3,312 48,184 7,767 Interest and finance charges paid/payable 4,378,622 3,375,115 4,378,622 3,375,115

Net loss on sale of other financial assets at Rental expense relating to operating leases - 1,585 - 1,585 fair value through profit or loss Minimum lease payments 157,768 162,970 157,768 162,970

DefinedNet loss contributionon disposal of superannuation property, plant expense and 7,540,130 6,264,534 5,960,004 3,428,271 equipment 48,184 3,312 48,184 7,767

Rental expense relating to operating leases Minimum lease payments 157,768 162,970 157,768 162,970

Defined contribution superannuation expense 7,540,130 6,264,534 5,960,004 3,428,271

19

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008

NOTE 6. CURRENT ASSETS – CASH AND CASH EQUIVALENTS NOTE 6. CURRENT ASSETS – CASH AND CASH EQUIVALENTS

Cash at bank and on hand 44,788,334 26,760,590 37,426,025 20,928,216

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

Balances as above 44,788,334 26,760,590 37,426,025 20,928,216

Less: Monies held in trust 5,030,088 4,490,193 3,544,077 3,211,835

Balances per statement of cash flows 39,758,246 22,270,397 33,881,948 17,716,381

Monies held in trust relate to students fees that are held in trust as required by the Education Services for Overseas Students (ESOS) Act.

20

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 (continued)

NOTENOTES 6. TO CURRENT THE FINANCIAL ASSETS STATEMENTS – CASH AND CASH EQUIVALENTS (continued) 31 December 2008 (continued) NOTE 6. CURRENT ASSETS – CASH AND CASH EQUIVALENTS (continued) (b) Cash at bank and on hand Cash at(b) bank Cash bears at bank a floating and on interest hand rate of 4.20% (2007: 6.70%) and cash on hand is non-interest bearing. NOTE 6. CURRENT ASSETS – CASH AND CASH EQUIVALENTS (continued) Cash at bank bears a floating interest rate of 4.20% (2007: 6.70%) and cash on hand is non-interest bearing. (c) Endowment(b) Cash atfund bank and and restricted on hand funds Of the(c) above Endowment cash at bank fund balance, and restricted a total amount funds of $6,000,000 (2007: nil) is set aside in the Endowment Fund and a total of Cash at bank bears a floating interest rate of 4.20% (2007: 6.70%) and cash on hand is non-interest bearing. $8,531,142Of the (2007: above $4,279,418) cash at bank represents balance, a grants total amount and donations of $6,000,000 and other (2007: funds nil) set is aside set aside for restricted in the Endowment purposes. Fund and a (c)total Endowment of $8,531,142 fund (2007: and restricted$4,279,418 funds) represents grants and donations and other funds set aside for restricted purposes. Of the above cash at bank balance, a total amount of $6,000,000 (2007: nil) is set aside in the Endowment Fund and a NOTEtotal 7.7. CURRENT of $8,531,142 ASSETS ASSETS (2007: – RECEIVABLES– $RECEIVABLES4,279,418) represents grants and donations and other funds set aside for restricted purposes.

NOTE 7. CURRENT ASSETS – RECEIVABLES Consolidated Parent Entity

2008 2007 2008 2007 Consolidated Parent Entity $ $ $ $ 2008 2007 2008 2007 Trade receivables 10,873,027 3,139,938 10,834,527 2,998,536 $ $ $ $ Less:Trade Provision receivables for doubtful receivables 10,873,027(130,000) 3,139,938(125,000) 10,834,527(125,000) 2,998,536(120,000)

Less: Provision for doubtful receivables 10,743,027(130,000) 3,014,938(125,000) 10,709,527(125,000) 2,878,536(120,000) Other receivables 1,613,947 859,044 1,610,492 798,147 10,743,027 3,014,938 10,709,527 2,878,536 Prepayments 1,531,143 2,203,621 1,395,221 2,190,506 Other receivables 1,613,947 859,044 1,610,492 798,147 Security deposits 1,123 1,123 1,123 1,123 Prepayments 1,531,143 2,203,621 1,395,221 2,190,506 13,889,240 6,078,726 13,716,363 5,868,312 Security deposits 1,123 1,123 1,123 1,123 13,889,240 6,078,726 13,716,363 5,868,312 (a) Trade (a) Tradereceivables receivables Trade Tradereceivables receivables include include an amount an amount of $10,266,737 of $10,266 (2007:,737 (2007:2,508,911) 2,508,911) for Fee- forHelp Fee receivable-Help receivable from the from Department the Department of Education, of Employment (a)Education, Trade and receivables EmploymentWorkplace Relations and Workplace (DEEWR) Relations that was (DE receivedEWR) that after was year-end. received after year-end. (Tradeb) Bad receivables and doubtful include trade an receivables amount of $10,266,737 (2007: 2,508,911) for Fee-Help receivable from the Department of (b) BadEducation, and doubtful Employment trade receivables and Workplace Relations (DEEWR) that was received after year-end. The Group The has Group recognised has recognised a loss of $47,760 a loss of (2007: $47,7 60$46,271) (2007 :in $ respect46,271) inof respectbad and ofdoubtful bad and trade doubtful receivables trade receivables during the yearduring ended the 31 December(yearb) Bad ended 2008.and 31doubtful DecemberThe loss trade has 200 receivablesbeen8. The included loss has in ‘other been includedexpenses’ in in ‘other the income expenses’ statement. in the income statement. (c ) OtherThe Group receivables has recognised a loss of $47,760 (2007: $46,271) in respect of bad and doubtful trade receivables during the (c) Otheryear receivables ended 31 December 2008. The loss has been included in ‘other expenses’ in the income statement. TheseThese are debtors are debtors other otherthan students than students and Campus and Campus Operations Operations debtors. debtors. There Thereis no interest is no interest charged charged on overdue on overdue amounts. amounts. Collateral (cCollateral) Other riseceivables not normally obtained. is not normally obtained. These(d) Impaired are debtors trade otherreceivables than students and Campus Operations debtors. There is no interest charged on overdue amounts. Collateral is not normally obtained. (d) ImpairedAs at 31 trade December receivables 2008 current trade receivables of the Group with a nominal value of $130,000 (2007: $125,000) were As at impaired.(d)31 December Impaired The trade2008 amount receivablescurrent of the trade provision receivables was $130,000 of the Group (2007: with $125,000). a nominal valueThese of impaired $130,000 receivables (2007: $125,000) mainly relate were toimpaired. The amountstudents of thewho provision are no longer was $130,000 enrolled. (2007: $125,000). These impaired receivables mainly relate to students who are no longerAs enrolled. at 31 December 2008 current trade receivables of the Group with a nominal value of $130,000 (2007: $125,000) were (e)impaired. Past due The but amount not impaired of the provision was $130,000 (2007: $125,000). These impaired receivables mainly relate to students who are no longer enrolled. (e) PastAs dueof 31 but December not impaired 2008, trade receivables of $476,290 (2007: $506,027) were past due but not impaired. These relate As of 31to(e) Decemberstudents Past due who but2008, anotre trade stillimpaired enroll receivables ed or were of $476,290 finishing their(2007: course $506,027) as at yearwere- end.past Thedue sebut receivab not impaired.les are Thesepast due relate for noto studentsmore than one semester. who areAs stillof 31 enrolled December or were 2008, finishing trade receivables their course of as$476,290 at year-end. (2007: These $506,027) receivables were are past past due due but for not no impaired. more than These one semester.relate to students who are still enrolled or were finishing their course as at year-end. These receivables are past due for no more NOTEthan 8. CURRENT one semester. ASSETS - INVENTORIES

NOTE 8. CURRENT ASSETS - INVENTORIES NOTE 8. CURRENT ASSETS - INVENTORIES Consolidated Parent Entity

2008 2007 2008 2007 Consolidated Parent Entity $ $ $ $ 2008 2007 2008 2007 AT COST $ $ $ $ Food 43,185 21,416 - - AT COST Beverages 51,486 41,456 - - Food 43,185 21,416 - - General stores 16,888 15,490 - - Beverages 51,486 41,456 - - 111,559 78,362 - - General stores 16,888 15,490 - -

111,559 78,362 - -

21

NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 (continued) NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 NOTES 31 December TO THE 2008 FINANCIAL (continued) STATEMENTS 31 December 2008 (continued) NOTE 9. CURRENT ASSETS – OTHER FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS NOTE 9. CURRENT ASSETS – OTHER FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

NOTE 9. CURRENT ASSETS – OTHER FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS NOTE 9. CURRENT ASSETS – OTHER FINANCIAL ASSETS ATConsolidated FAIR VALUE THROUGH PROFIT ORParent LOSS Entity NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 (continued) Consolidated Parent Entity 2008 2007 2008 2007 Consolidated Parent Entity 2008$ 2007$ 2008$ 2007$ 2008 2007 2008 2007 NOTE Australian 9. CURRENT listed equity ASSETS securities – OTH ER FINANCIAL ASSETS239,006 AT FAIR$ VALUE THROUG5,319$ H PROFIT OR2,601 LOSS$ 5,319$ Australian listed equity securities 239,006$ 5,319$ 2,601$ 5,319$

Australian listed equity securities 239,006Consolidated 5,319 Parent2,601 Entity 5,319 Changes in fair values of other financial assets at fair value through profit or loss are recorded in other income in the income statement (note 4). 2008 2007 2008 2007 Changes in fair values of other financial assets at fair value through profit or loss are recorded in other income in the income statement (note 4). $ $ $ $ Changes in fair values of other financial assets at fair value through profit or loss are recorded in other income in the income statement (note 4). NOTENOTEAustralian 10. 10. NON NON-CURRENT listed-CURRE equityNT securities ASSETS ASSETS – AVAILABL – AVAILABLE-FOR-SALEE-FOR-SALE239,006 FINANCIAL FINANCIAL ASSETS ASSETS5,319 2,601 5,319

NOTE 10. NON-CURRENT ASSETS – AVAILABLE-FOR-SALE FINANCIAL ASSETS Australian unlisted equity securities 11,000 11,000 11,000 11,000 NOTE 10. NON-CURRENT ASSETS – AVAILABLE-FOR-SALE FINANCIAL ASSETS ChangesAustralian in fair unlisted values equity of other securities financial assets at fair value through11,000 profit or loss11,000 are recorded in other11,000 income in the income11,000 statementAustralian (note unlisted 4). equity securities 11,000 11,000 11,000 11,000

NOTE 11. DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 11.10. DERIVATIVE NON-CURRE NTFINANCIAL ASSETS –INSTRUMEN AVAILABLETS-FOR -SALE FINANCIAL ASSETS NOTE 11. DERIVATIVE FINANCIAL INSTRUMENTS NOTENon- current11. DERIVATIVE assets FINANCIAL INSTRUMENTS Australian unlisted equity securities 11,000 11,000 11,000 11,000 Non- current assets NonInterest-current rate assetsswap contracts – cash flow hedges - 1,964,698 - 1,964,698 Interest rate swap contracts – cash flow hedges - 1,964,698 - 1,964,698 - 1,964,698 - 1,964,698 NOTEInterest 11. rateDERIVATIVE swap contracts FINANCIAL – cash INSTRUMEN flow hedges TS - 1,964,698 - 1,964,698 - 1,964,698 - 1,964,698 Non- current liabilities Non -current liabilities - 1,964,698 - 1,964,698 InterestNon-current rate assetsswap contracts – cash flow hedges 5,020,506 - 5,020,506 - Non-current liabilities Interest rate swap contracts – cash flow hedges 5,020,506 - 5,020,506 - Interest rate swap contracts – cash flow hedges 5,020,506- 1,964,698- 5,020,506- 1,964,698- Interest rate swap contracts – cash flow hedges 5,020,506 - 5,020,506 - 5,020,506 - 5,020,506 - Instruments used by the Group - 1,964,698 - 1,964,698 5,020,506 - 5,020,506 - TheInstrumentsNon Group- current is usedparty liabilities by to the derivative Group financial instruments in the normal course of business in order to hedge exposure to fluctuations inInstruments interest rates. used by the Group TheInstruments Group is partyused byto derivativethe Group financial instruments in the normal course of business in order to hedge exposure to fluctuations inInterest interest rate rates. swap contracts – cash flow hedges 5,020,506 - 5,020,506 - InterestTheThe GroupGroup rate is partyswap contractsto derivative – cash financial flow hedges instrumentsinstruments inin thethe normalnormal coursecourse ofof businessbusiness in orderorder to hedgehedge exposureexposure to fluctuationsfluctuations in in interest rates. InterestBankinterest loans raterates. of swap the Group contracts currently – cash bear flow an hedges average variable5,020,506 interest rate of 8.72%. In -order to5,020,506 protect the loans from exposure- Interestto increasing rate swapinterest contracts rates, the – cash Group flow has hedges entered into an interest rate swap contract under which it is obliged to receive Bankinterest loans at variableof the Group rates currently and to pay bear interest an average at fixed variable rates. interest rate of 8.72%. In order to protect the loans from exposure InstrumentstoInterest increasing rate used interestswap by contracts the rate Groups, the – cash Group flow has hedgesentered into an interest rate swap contract under which it is obliged to receive BankBank loansloans of the Group currently bear an average variable interestinterest raterate of of 8.72%. 8.72%. In In order order to to protect protect the the loans loans from from exposure exposure to toTheinterest increasing swap at currently variable interest ratesin rateplace ands, coversthe to Grouppay 100% interest has (200 entered at7 fixed: 100%) into rates. anof theinterest loan principalrate swap outstanding contract under and whichexpires it onis obliged23 November to receive 2013 . The Thefixedincreasing Group interest isinterest party rate is torates, 6.51% derivative the plus Group afinancial pricing has entered instrumentsmargin into of 1.35% an in interest the (200 normal7 rate: 6.51% courseswap plus contract of a business pricing under margin in whichorder of toit 1.35%) is hedge obliged and exposure tothe receive variable to fluctuations interest rate is at ininterest interest at rates.variable rates and to pay interest at fixed rates. theThevariable bankswap ratesbill currently swap and rateto in pay place which interest covers at balance at 100% fixed date (200 rates. was7: 100%) 4.29% of (200 the 7loan: 7.12 principal%) plus outstandinga margin of 1.35%.and expi res on 23 November 2013. The fixed interest rate is 6.51% plus a pricing margin of 1.35% (2007: 6.51% plus a pricing margin of 1.35%) and the variable rate is InterestThe swap rate currently swap contracts in place covers – cash 100%flow hedges (2007 : 100%) of the loan principal outstanding and expires on 23 November 2013. The theThe bankcontract bill swap require rates settlement which at balance of net interestdate was receivable 4.29% (200 or 7payable: 7.12%) each plus month a margin. Interest of 1.35%. is payable on the underlying debt fixedThe swap interest currently rate is in 6.51% place pluscovers a pricing 100% (2007:margin 100%) of 1.35% of the(200 loan7: 6.51% principal plus outstanding a pricing margin and expires of 1.35%) on 23 and November the variable 2013. rate The is fixed Banktheevery bank loans quarter bill of swap .the The Grouprate contracts which currently atare balance settledbear an date on average a was net 4.29basis. variable% (200 interest7: 7.12 rate%) plus of 8 a.72 margin%. In oforder 1.35%. to protect the loans from exposure Theinterest contract rate isrequire 6.51%s plussettlement a pricing of marginnet interest of 1.35% receivable (2007: 6.51%or payable plus eacha pricing month margin. Interest of 1.35%) is payable and the on variable the underlying rate is the debt bank Thetoevery increasing gain quarter or loss interest. The from contracts remeasuringrates, the are Group settled the hedginghas on entered a net instruments basis. into an interest at fair value rate swapis deferred contract in equityunder inwhich the hedgingit is obliged reserve, to receive to the interestThebill swapcontract at rate variable requirewhich ratesats settlement balance and to date pay of wasnetinterest interest4.29% at (2007:fixed receivable rates. 7.12%) or pluspayable a margin each ofmonth 1.35%.. Interest is payable on the underlying debt extent that the hedge is effective, and reclassified to profit and loss when the hedged interest expense is recognised. In the year Theevery gain quarter or loss. The from contracts remeasuring are settled the hedging on a net instruments basis. at fair value is deferred in equity in the hedging reserve, to the endedThe swap 31 December currently in2008 place a gaincovers of 100%$266,7 (20098 was7: 100%) reclassified of the loaninto profiprincipalt and outstanding loss (2007: and$17 ,expi748res) and on included 23 November in finance 2013 cost. The. TheextentThereThe gaincontract was that or no theloss requireshedge hedge from ineffectiveness remeasuringsettlementis effective, of andthe netin hedgingthereclassified interest current instruments receivable orto priorprofit year.or andat payable fair loss value when each is the deferredmonth. hedged Interest in interestequity is in payable expense the hedging on is therecognised. reserve, underlying to In the debt the yearevery endedfixed interest 31 December rate is 2008 6.51% a plusgain aof pricing $266,7 margin98 was of reclassified 1.35% (200 in7to: 6.51% profit plus and aloss pricing (2007 margin: $17,748 of 1.35%)) and included and the invariable finance rate cost is. extentthequarter. bank that Thebill the swap contracts hedge rate is whichare effective, settled at balance andon a reclassified net date basis. was 4.29 to profit% (200 and7 :loss 7.12 when%) plus the a hedgedmargin interestof 1.35%. expense is recognised. In the year endedThere was31 December no hedge 2008ineffectiveness a gain of $ in266 the,7 current98 was reclassifiedor prior year. in to profit and loss (2007: $17,748) and included in finance cost. ThereNOTEThe contract was12. NONno requirehedge-CURREN ineffectivenesss settlementT ASSETS of innet– OTHERthe interest current FIN receivableANCIAL or prior year.ASSETS or payable each month. Interest is payable on the underlying debt The gain or loss from remeasuring the hedging instruments at fair value is deferred in equity in the hedging reserve, to the extent NOTEeverythat the quarter12. hedge NON. -TheisCURREN effective, contractsT ASSETSand are reclassified settled – OTHER on ato net FINprofit ANCIALbasis. and loss ASSETS when the hedged interest expense is recognised. In the year ended 31 Consolidated Parent Entity TheNOTE December gain 12. or NON2008 loss- CURRENfrom a gain remeasuring ofT $266,798 ASSETS the was– OTHERhedging reclassified FIN instrumentsANCIAL into profitASSETS at fair and value loss is (2007: deferred $17,748) in equity and inincluded the hedging in finance reserve, cost. to the There was no extent hedge ineffectivenessthat the hedge isin effective,the current and or reclassified prior year. to profit andConsolidated loss when the hedged interest expenseParent is recognised. Entity In the year 2008 2007 2008 2007 ended 31 December 2008 a gain of $266,798 was reclassified inConsolidatedto profit and loss (2007: $17,748) andParent included Entity in finance cost. There was no hedge ineffectiveness in the current or prior year.2008 $ 2007$ 2008$ 2007$ NOTE 12. NON-CURRENT ASSETS – OTHER FINANCIAL 2008ASSETS$ 2007$ 2008$ 2007$ NOTEShares 12. in NON subsidiaries-CURREN (noteT ASSETS 27) – OTHER FINANCIAL ASSETS- - 13 9 $ $ $ $ Shares in subsidiaries (note 27) - - 13 9 These financial assets are carried at cost. Shares in subsidiaries (note 27) Consolidated- - Parent13 Entity 9 These financial assets are carried at cost. 2008 2007 2008 2007 These financial assets are carried at cost. $ $ $ $ Shares in subsidiaries (note 27) - - 13 9

These financial assets are carried at cost.

22

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 31 December 2008 (continued)

NOTE 13. NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT NOTE 13. NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT

Consolidated Parent Entity 2008 2007 2008 2007 $ $ $ $ Land and Buildings Freehold land – at cost 10,717,000 10,717,000 10,717,000 10,717,000 Buildings – at cost 99,689,154 82,767,913 99,689,154 82,767,913 Less: Accumulated depreciation 14,042,052 10,601,333 14,042,052 10,601,333 85,647,102 72,166,580 85,647,102 72,166,580 Total land and buildings 96,364,102 82,883,580 96,364,102 82,883,580 Plant and equipment and other assets Plant and equipment – at cost 11,350,174 9,907,962 11,032,588 9,576,762 Less: Accumulated depreciation 6,512,290 5,507,369 6,241,610 5,192,679 4,837,884 4,400,593 4,790,978 4,384,083

Plant and equipment under finance lease 6,462,250 5,066,728 6,462,250 5,066,728 Less: Accumulated amortisation 3,836,209 2,584,844 3,836,209 2,584,844 2,626,041 2,481,884 2,626,041 2,481,884

Furniture, fitout and other assets – at cost 26,423,824 21,939,727 24,822,689 20,217,717 Less: Accumulated depreciation 15,672,681 13,279,006 14,071,546 11,556,996 10,751,143 8,660,721 10,751,143 8,660,721

Motor vehicles – at cost 3,405 6,136 3,405 - Less: Accumulated depreciation 551 6,136 551 - 2,854 - 2,854 -

Motor vehicles under finance lease 1,976,266 2,347,515 1,976,266 2,347,515 Less: Accumulated amortisation 484,406 678,114 484,406 678,114 1,491,860 1,669,401 1,491,860 1,669,401 Library – at cost 19,508,338 18,949,424 19,445,770 18,886,855 Less: Accumulated depreciation 17,354,495 16,736,688 17,291,927 16,674,119 2,153,843 2,212,736 2,153,843 2,212,736 Total plant and equipment and other assets 21,863,625 19,425,335 21,816,719 19,408,825 Total property, plant and equipment 118,227,727 102,308,915 118,180,821 102,292,405

(a) Valuations of land and buildings Land and buildings are measured on the cost basis. An independent valuation of land and buildings was carried out during the financial year ended 31 December 2008 in accordance with bank covenants. The market value was calculated at $125,000,000 on a going concern basis. (a) Valuations of land and buildings (b)Land Non and-current buildings assets are measuredpledged as on security the cost basis. An independent valuation of land and buildings was carried out during the Referfinancial to note year 19 ended for information 31 December on non2008-current in accordance assets pledgedwith bank as covenants.security by theThe parentmarket entityvalue orwas its calculated controlled at entities. $125,000,000 on a going concern basis.

(b) Non-current assets pledged as security Refer to note 19 for information on non-current assets pledged as security by the parent entity or its controlled entities.

23 NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 31 December 2008 (continued)

NOTE 13. NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT (continued) NOTE 13. NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT (continued) (c)(c) Reconciliations Reconciliations Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current Reconciliationsfinancial year ofare the set carrying out below. amounts of each class of property, plant and equipment at the beginning and end of the current financial year are set out below.

Opening net Additions Disposals Amortisation Closing net book amount at Charge book amount at 1 Jan 2008 31 Dec 2008

$ $ $ $ $ Consolidated Land 10,717,000 - - - 10,717,000 Buildings 60,318,254 14,126,644 - 2,278,318 72,166,580 Plant and equipment 2,825,882 3,251,014 932,328 743,975 4,400,593 Leased plant and equipment 2,772,312 1,176,344 - 1,466,772 2,481,884 Furniture, fitout and other assets 6,620,995 4,120,763 - 2,081,037 8,660,721 Leased motor vehicles 1,677,081 740,399 333,283 414,796 1,669,401 Library 2,210,755 884,341 11,858 870,502 2,212,736 Total 87,142,279 24,299,505 1,277,469 7,855,400 102,308,915

Parent entity Land 10,717,000 - - - 10,717,000 Buildings 60,318,254 14,126,644 - 2,278,318 72,166,580 Plant and equipment 2,825,882 3,233,161 932,328 742,632 4,384,083 Leased plant and equipment 2,772,312 1,176,344 - 1,466,772 2,481,884 Furniture, fitout and other assets 6,620,532 4,120,763 - 2,080,574 8,660,721 Leased motor vehicles 1,677,081 740,399 333,283 414,796 1,669,401 Library 2,210,755 884,341 11,858 870,502 2,212,736 Total 87,141,816 24,281,652 1,277,469 7,853,594 102,292,405

Opening net Additions Disposals Amortisation Closing net book amount at Charge book amount at 1 Jan 2008 31 Dec 2008 $ $ $ $ $ Consolidated Land 10,717,000 - - - 10,717,000 Buildings 72,166,580 16,921,241 - 3,440,719 85,647,102 Plant and equipment 4,400,593 2,485,705 951,194 1,097,220 4,837,884 Leased plant and equipment 2,481,884 1,705,688 - 1,561,531 2,626,041 Furniture, fitout and other assets 8,660,721 4,946,893 20,552 2,835,919 10,751,143 Motor vehicles - 3,405 - 551 2,854 Leased motor vehicles 1,669,401 807,792 614,988 370,345 1,491,860 Library 2,212,736 795,093 27,704 826,282 2,153,843 Total 102,308,915 27,665,817 1,614,438 10,132,567 118,227,727

Parent entity Land 10,717,000 - - - 10,717,000 Buildings 72,166,580 16,921,241 - 3,440,719 85,647,102 Plant and equipment 4,384,083 2,451,521 951,194 1,093,432 4,790,978 Leased plant and equipment 2,481,884 1,705,688 - 1,561,531 2,626,041 Furniture, fitout and other assets 8,660,721 4,946,893 20,552 2,835,919 10,751,143 Motor vehicles - 3,405 - 551 2,854 Leased motor vehicles 1,669,401 807,792 614,988 370,345 1,491,860 Library 2,212,736 795,093 27,704 826,282 2,153,843 Total 102,292,405 27,631,633 1,614,438 10,128,779 118,180,821

24

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 31 December 2008 (continued)

NOTE NOTE 14.14. NONNON-CURRENT-CURRENT ASSET ASSETSS – INTANGIBLE– INTANGIBLE ASSET ASSETSS NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 (continued) Consolidated Parent Entity

2008 2007 2008 2007 NOTE 14. NON-CURRENT ASSETS – INTANGIBLE ASSETS $ $ $ $ Computer software 4,053,062Consolidated 3,147,108 4,033,062Parent Entity 3,126,613 Less: Accumulated amortisation 3,0420081,934 2,771,2842007 3,0220081,934 2,750,7892007 $ $ $ $ 1,011,128 375,824 1,011,128 375,824 Computer software 4,053,062 3,147,108 4,033,062 3,126,613 Opening net Additions Disposals Amortisation Closing net Less: Accumulated amortisation book amount at 3,041,934 2,771,284 3,0Charge21,934* book 2,750,789amount at 1 Jan 2007 31 Dec 2007 1,011,128 375,824 1,011,128 375,824

Opening net$ Additions$ Disposals$ Amortisation$ Closing net$ Consolidated book amount at Charge* book amount at 1 Jan 2007 31 Dec 2007 Computer software 583,356 266,625 - 474,157 375,824

Parent entity $ $ $ $ $ Consolidated Computer software 583,356 266,625 - 474,157 375,824 Computer software 583,356 266,625 - 474,157 375,824 Opening net Additions Disposals Amortisation Closing net Parent entity book amount at Charge* book amount at Computer software 1 Jan583,356 2008 266,625 - 474,157 31 Dec375,824 2008 $ $ $ $ $ Opening net Additions Disposals Amortisation Closing net Consolidated book amount at Charge* book amount at Computer software 1 Jan375,824 2008 906,449 - 271,145 31 Dec1,011,128 2008 $ $ $ $ $ Parent entity ComputerConsolidated software 375,824 906,449 - 271,145 1,011,128 Computer software 375,824 906,449 - 271,145 1,011,128

* AmortisationParent entity of $271,145 (2007: $474,157) is included in depreciation and amortisation expense in the income statement. Computer software has a finite useful life of 3 years. Computer software 375,824 906,449 - 271,145 1,011,128

* Amortisation of $271,145 (2007: $474,157) is included in depreciation and amortisation expense in the income statement. Computer software hasNOTE a finite 15. usefulCURRENT life of 3LIABILITI years. ES – PAYABLES

Consolidated Parent Entity

NOTE 15. CURRENT LIABILITIES – PAYABLES NOTE 15. CURRENT LIABILITIES – PAYABLES 2008 2007 2008 2007 $ $ $ $ Consolidated Parent Entity Trade payables 9,851,663 7,398,537 9,313,045 6,674,239 2008 2007 2008 2007 Other payables 4,620,310 4,304,954 4,620,310 2,620,439 $ $ $ $ Amounts payable to subsidiaries - - 582,101 4,303,877 Trade payables 9,851,663 7,398,537 9,313,045 6,674,239 14,471,973 11,703,491 14,515,456 13,598,555 Other payables 4,620,310 4,304,954 4,620,310 2,620,439

OtherAmounts payables payable include to subsidiaries accruals for annual leave. The entire obligation is presented- as current,- since the Group582,101 does not have4,303,877 unconditional right to defer settlement. The Group expects all employees to take the full amount of accrued leave within the next 12 months. 14,471,973 11,703,491 14,515,456 13,598,555

Other payables include accruals for annual leave. The entire obligation is presented as current, since the Group does not have unconditional right to defer settlement. The Group expects all employees to take the full amount of accrued leave within the next 12 months.

25

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 31 December 2008 (continued) NOTES TO THE FINANCIAL STATEMENTS NOTE 16. CURRENT LIABILITIES – BORROWINGS 31 December 2008 (continued) NOTE 16. CURRENT LIABILITIES – BORROWINGS NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 (continued) NOTE 16. CURRENT LIABILITIES – BORROWINGS Consolidated Parent Entity NOTES TO THE FINANCIAL STATEMENTS 31NOTE December 16. CURRENT 2008 (continued) LIABILITIES – BORROWINGS 2008Consolidated 2007 2008Parent Entity 2007

2008$ 2007$ 2008$ 2007$ NOTE 16. CURRENT LIABILITIES – BORROWINGS Consolidated Parent Entity Secured $ $ $ $ 2008 2007 2008 2007 Bank loan 2,500,000Consolidated - 2,500,000Parent Entity - Secured $ $ $ $ Lease liabilities (note 25) 2,251,4272008 2,195,3142007 2,251,4272008 2,195,3142007 SecuredBank loan 2,500,000 - 2,500,000 - Total secured current borrowings 4,751,427$ 2,195,314$ 4,751,427$ 2,195,314$ BankLease loan liabilities (note 25) 2,500,0002,251,427 2,195,314- 2,500,0002,251,427 2,195,314- Secured DetailsLeaseTotal secured ofliabilities the security current (note relating 25)borrowings to each of the secured liabilities and2,251,4274,751,427 further information 2,195,314 on the bank loan 2,251,4274,751,427are set out in note 192,195,314. Bank loan 2,500,000 - 2,500,000 -

DetailsTotal securedof the security current relating borrowings to each of the secured liabilities and4,751,427 further information 2,195,314 on the bank loan 4,751,427are set out in note 192,195,314. NOTELease 17 liabilities. CURRENT (note LIABILITI 25) ES – PROVISIONS 2,251,427 2,195,314 2,251,427 2,195,314

NOTEDetails 17. of theCURRENT security LIABILITIESrelating to each – PROVISIONS of the secured liabilities and further information on the bank loan are set out in note 19. NOTEEmployeeTotal 1 secured7. CURRENT benefits current – LIABILITIlong borrowings serviceES leave – PROVISIONS 4,751,4272,729,917 2,513,6462,195,314 4,751,4272,729,917 2,195,3141,012,021

NOTE DetailsEmployee 1 7of. theCURRENT benefits security – LIABILITI longrelating service toES each leave– PROVISIONS of the secured liabilities and2,729,917 further information 2,513,646 on the bank loan are2,729,917 set out in note 191,012,021. NOTE 18. CURRENT LIABILITIES – OTHER

NOTE Employee 17. CURRENT benefits – LIABILITIlong serviceES leave– PROVISIONS 2,729,917 2,513,646 2,729,917 1,012,021 NOTEDeferred 18. CURRENTincome LIABILITIES – OTHER

Employee benefits – long service leave 2,729,917 2,513,646 2,729,917 1,012,021 NOTENOTEDeferredstudent 18.18. CURRENTincome fees LIABILITI LIABILITIESES – –OTHER OTHER 12,105,749 10,564,596 10,530,943 9,102,666

studentscholarships fees 12,105,74961,800 10,564,59622,185 10,530,94361,800 9,102,66622,185 NOTEDeferred 18. CURRENTincome LIABILITIES – OTHER fitness centre 80,196 81,378 - - scholarshipsstudent fees 12,105,74961,800 10,564,59622,185 10,530,94361,800 9,102,66622,185 Deferred income 12,247,745 10,668,159 10,592,743 9,124,851 scholarshipsfitness centre 61,80080,196 22,18581,378 61,800- 22,185- student fees 12,105,749 10,564,596 10,530,943 9,102,666 fitness centre 12,247,74580,196 10,668,15981,378 10,592,743- 9,124,851- NOTEscholarships 19. NON-CURRENT LIABILITIES – BORROWINGS 61,800 22,185 61,800 22,185 12,247,745 10,668,159 10,592,743 9,124,851 fitness centre 80,196 81,378 - - NOTESecured 19. NON-CURRENT LIABILITIES – BORROWINGS

12,247,745 10,668,159 10,592,743 9,124,851 NOTESecuredBank 1loan9. NON -CURRENT LIABILITIES – BORROWINGS 51,800,000 43,812,173 51,800,000 43,812,173

NOTE BankLease 19. loan liabilities NON-CURRENT (note 25) LIABILITIES – BORROWINGS 51,800,0002,039,516 43,812,1732,156,341 51,800,0002,039,516 43,812,1732,156,341 NOTESecured 19. NON-CURRENT LIABILITIES – BORROWINGS Total non-current borrowings 53,839,516 45,968,514 53,839,516 45,968,514 BankLease loan liabilities (note 25) 51,800,0002,039,516 43,812,1732,156,341 51,800,0002,039,516 43,812,1732,156,341 Secured (a)LeaseTotal Total non liabilities Secured-current (note Liabilities borrowings 25) 53,839,5162,039,516 45,968,5142,156,341 53,839,5162,039,516 45,968,5142,156,341 Bank loan 51,800,000 43,812,173 51,800,000 43,812,173 TheTotal total non secured-current liabilities borrowings (current and non-current) are as follows:53,839,516 45,968,514 53,839,516 45,968,514 (a)Lease Total liabilities Secured (note Liabilities 25) 2,039,516 2,156,341 2,039,516 2,156,341

The total secured liabilities (current and non-current) are as follows: (a)BankTotal Total loannon Secured- current Liabilities borrowings 54,300,00053,839,516 45,968,51443,812,173 54,300,00053,839,516 45,968,51443,812,173

TheLease total liabilities secured liabilities (current and non-current) are as follows:4,290,943 4,351,655 4,290,943 4,351,655 (a)Bank Total loan Secured Liabilities 54,300,000 43,812,173 54,300,000 43,812,173

Total secured liabilities 58,590,943 48,163,828 58,590,943 48,163,828 TheBankLease total loan liabilities secured liabilities (current and non-current) are as follows:54,300,0004,290,943 43,812,1734,351,655 54,300,0004,290,943 43,812,1734,351,655

LeaseTotal secured liabilities liabilities 58,590,9434,290,943 48,163,8284,351,655 58,590,9434,290,943 48,163,8284,351,655 Bank loan 54,300,000 43,812,173 54,300,000 43,812,173 (b) Assets Pledged as Security Total secured liabilities 58,590,943 48,163,828 58,590,943 48,163,828 TheLease bank liabilities loan is secured by: 4,290,943 4,351,655 4,290,943 4,351,655 (b) Assets Pledged as Security −Total first secured registered liabilities mortgages over the freehold land and buildings;58,590,943 48,163,828 58,590,943 48,163,828 The− bankfirst registeredloan is secured company by: charge over all assets and undertakings of all entities in the consolidated entity; (b)− Assetscross guaranteePledged as between Security Bond University Limited and all entities in the consolidated entity. − first registered mortgages over the freehold land and buildings; TheLease− bankfirst liabilities registeredloan is are secured effectively company by: charge secured over as theall assets rights andto the undertakings leased asset of recognised all entities in the financialconsolidated statements entity; revert to the (b)lessor− Assetscrossfirst in the registered guaranteePledged event of as mortgages betweendefault. Security Bond over Universitythe freehold Limited land and and buildings; all entities in the consolidated entity. TheLease− bankfirst liabilities registeredloan is are secured effectively company by: charge secured over as theall assets rights andto the undertakings leased asset of recognised all entities in the financialconsolidated statements entity; revert to the − cross guarantee between Bond University Limited and all entities in the consolidated entity. lessor− first in the registered event of mortgages default. over the freehold land and buildings; Lease− first liabilities registered are effectively company charge secured over as theall assets rights andto the undertakings leased asset of recognised all entities in the financialconsolidated statements entity; revert to the lessor− cross in the guarantee event of betweendefault. Bond University Limited and all entities in the consolidated entity. Lease liabilities are effectively secured as the rights to the leased asset recognised in the financial statements revert to the lessor in the event of default.

26

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008

NOTES TO THE FINANCIAL STATEMENTS NOTE31 December 19. NON-CURRENT 2008 (continued) LIABILITIES – BORROWINGS (continued)

NOTE 19. NON-CURRENT LIABILITIES – BORROWINGS (continued) (b) Assets Pledged as Security (continued) The following financial covenants apply to the bank loan: − total debt to EBITDA to be less than 4.1 times; − alternate use land valuation not less than $80,000,000; − EBITDA to be within 85% of budget forecasts; − debt service cover ratio to be more than 1.3 times; and − the company is not to incur other debt or operating leasing greater than $5,000,000 in aggregate without the prior written consent of the bank. The company complied at all times during the year with the above covenants.

The carrying amounts of assets pledged as security for current and non-current interest bearing liabilities are:

Consolidated Parent Entity 2008 2007 2008 2007 CURRENT $ $ $ $ Floating charge Cash and cash equivalents 44,788,334 26,760,590 37,426,025 20,928,216 Receivables 13,889,240 6,078,726 13,716,363 5,868,312 Inventories 111,559 78,362 - - Other financial assets at fair value through profit or loss 239,006 5,319 2,601 5,319

Total current assets pledged as security 59,028,139 32,922,997 51,144,989 26,801,847

NON-CURRENT

First mortgage Freehold land and buildings 96,364,102 82,883,580 96,364,102 82,883,580

Finance lease Plant and equipment under finance lease 2,626,041 2,481,884 2,626,041 2,481,884 Motor vehicles under finance lease 1,491,860 1,669,401 1,491,860 1,669,401 4,117,901 4,151,285 4,117,901 4,151,285 Floating charge Available-for-sale financial assets 11,000 11,000 11,000 11,000 Other financial assets - - 13 9 Derivative financial instruments - 1,964,698 - 1,964,698 Plant and equipment 17,745,724 15,274,050 17,698,818 15,257,540 Intangible assets 1,011,128 375,824 1,011,128 375,824 18,767,852 17,625,572 18,720,959 17,609,071

Total non-current assets pledged as security 119,249,855 104,660,437 119,202,962 104,643,936

Total assets pledged as security 178,277,994 137,583,434 170,347,951 131,445,783

27

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008

NOTENOTES 19. TO NON-CURRENT THE FINANCIAL LIABILITIESSTATEMENTS – BORROWINGS (continued) 31 December 2008 (continued)

NOTE 19. NON-CURRENT LIABILITIES – BORROWINGS (continued)

Consolidated Parent Entity 2008 2007 2008 2007 $ $ $ $ (c) Financing Arrangements Unrestricted access was available at balance date to the following lines of credit: Credit standby arrangements Total facilities Lease finance facility 343,000 343,000 343,000 343,000 Asset finance facility 4,000,000 4,000,000 4,000,000 4,000,000 4,343,000 4,343,000 4,343,000 4,343,000 Used at balance date Lease finance facility - - - - Asset finance facility 700,815 1,397,866 700,815 1,397,866 700,815 1,397,866 700,815 1,397,866 Unused at balance date Lease finance facility 343,000 343,000 343,000 343,000 Asset finance facility 3,299,185 2,602,134 3,299,185 2,602,134 3,642,185 2,945,134 3,642,185 2,945,134 Bank loan facilities Total facilities 54,300,000 54,300,000 54,300,000 54,300,000 Used at balance date 54,300,000 43,812,173 54,300,000 43,812,173 Unused at balance date - 10,487,827 - 10,487,827

The current interest rate on the bank loans drawn is 7.86% (2007: 7.86%).

(d) Interest Rate Risk Exposures The following table sets out the consolidated entity’s exposure to interest rate risk, including the contractual repricing dates and the effective weighted average interest rate by maturity periods. Exposures arise predominantly from liabilities bearing variable interest rates as the consolidated entity intends to hold fixed rate liabilities to maturity.

28

NOTES TO THE FINANCIAL STATEMENTS

31 December 2008 NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 (continued) NOTE 19. NON-CURRENT LIABILITIES – BORROWINGS (continued)

NOTE 19. NON-CURRENT LIABILITIES – BORROWINGS (continued) (d) Interest Rate Risk Exposures (continued) (d) Interest Rate Risk Exposures (continued)

Fixed interest rate

Floating 1 year or Over 1 to 2 Over 2 to Over 3 to 4 Over 4 to Over 5 Total interest rate less years 3 years years 5 years years 2008 $ $ $ $ $ $ $ $

Bank loan 54,300,000 ------54,300,000 (note 19)

Lease liabilities - 2,251,427 1,286,193 527,884 161,331 64,108 - 4,290,943 (note 16)

Interest rate swap (note 11) (54,187,500) 1,666,666 2,500,000 2,500,000 2,500,000 2,500,000 42,520,834 -

112,500 3,918,093 3,786,193 3,027,884 2,661,331 2,564,108 42,520,834 58,590,943

Weighted average 8.72% 8.13% 7.94% 8.18% 8.06% 7.92% interest rate

Fixed interest rate

Floating 1 year or Over 1 to 2 Over 2 to Over 3 to 4 Over 4 to Over 5 Total 2007 interest rate less years 3 years years 5 years years $ $ $ $ $ $ $ $

Bank loan (note 19) 43,812,173 ------43,812,173

Lease liabilities - 2,195,314 1,537,618 531,517 87,205 - - 4,351,654 (note 16)

Interest rate (43,812,173) - 2,500,000 2,500,000 2,500,000 2,500,000 33,812,173 - swap (note 11)

- 2,195,314 4,037,618 3,031,517 2,587,205 2,500,000 33,812,173 48,163,827

Weighted average 8.79% 8.27% 8.16% 7.91% 7.86% 7.86% interest rate

(e) Fair Value The(e) Fairfair valueValue of all interest bearing liabilities (including those arising from interest rate swap agreements) of the consolidated entity approximates their carrying amounts. The fair value of all interest bearing liabilities (including those arising from interest rate swap agreements) of the consolidated entity approximates their carrying amounts.

29

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 (continued) NOTE 20. NON-CURRENT LIABILITIES – PROVISIONS

NOTESNOTE 20 TO. NONTHE -FINANCIALCURRENT LIABI STATEMENTSLITIES – PROVISIONS 31 December 2008 (continued)

Consolidated Parent Entity NOTE 20. NON-CURRENT LIABILITIES – PROVISIONS 2008 2007 2008 2007 Consolidated$ $ Parent$ Entity $ Employee benefits – long service leave 1,669,4432008 1,257,8142007 1,669,4432008 558,1862007

$ $ $ $ Employee benefits – long service leave 1,669,443 1,257,814 1,669,443 558,186 NOTE 21. CONTRIBUTED EQUITY NOTE 21. CONTRIBUTED EQUITY Bond University Limited was incorporated as a company limited by guarantee on 12 February 1987. Pursuant to the Bond Memorandum University and Limited Articles was of incorporated Association asof thea company company, limited every by member guarantee has on undertaken 12 February in the1987. event Pursuant of a deficiency to the Memorandum on winding NOTE 21. CONTRIBUTED EQUITY andup to Articles contribute of Association an amount of not the exceeding company, $10. every At member 31 December has undertaken 2008, Bond in theUniversity event of Limited a deficiency had 30 onme mbers.winding up to contribute an amount Bond University not exceeding Limited $10. was At incorporated 31 December as 2008, a company Bond University limited by Limited guarantee had on 30 12 members. February 1987. Pursuant to the NOTEMemorandum 22. RESERVES and Articles AND of RETAAssociationINED PROFITS of the company, every member has undertaken in the event of a deficiency on winding up to contribute an amount not exceeding $10. At 31 December 2008, Bond University Limited had 30 members. Consolidated Parent Entity NOTENOTE 22.22. RESERVES AND AND RETA RETAINEDINED PROFITS PROFITS 2008 2007 2008 2007 (a) Reserves $ $ $ $ Consolidated Parent Entity Hedging reserve – cash flow hedges (5,020,506)2008 1,964,6982007 (5,020,506)2008 1,964,6982007 (a) Reserves $ $ $ $ HedgingMovements: reserve – cash flow hedges (5,020,506) 1,964,698 (5,020,506) 1,964,698

Balance 1 January 1,964,698 (392,185) 1,964,698 (392,185) Movements: Transfer to net profit (266,798) (17,748) (266,798) (17,748) Balance 1 January 1,964,698 (392,185) 1,964,698 (392,185) Revaluation (6,718,406) 2,374,631 (6,718,406) 2,374,631 Transfer to net profit (6,985,204)(266,798) 2,356,883(17,748) (6,985,204)(266,798) 2,356,883(17,748) BalanceRevaluation 31 December (5,020,506)(6,718,406) 1,964,6982,374,631 (5,020,506)(6,718,406) 1,964,6982,374,631 (6,985,204) 2,356,883 (6,985,204) 2,356,883 (b)Balance Retained 31 December profits (5,020,506) 1,964,698 (5,020,506) 1,964,698 Movements in retained profits were as follows: (b)Balance Retained 1 January profits 61,311,798 46,985,504 57,023,644 40,961,691 MovementsNet profit for in the retained year profits were as follows: 27,256,175 14,326,294 25,225,805 16,061,953 Balance 131 January December 88,567,97361,311,798 46,985,50461,311,798 82,249,44957,023,644 57,023,64440,961,691 Net profit for the year 27,256,175 14,326,294 25,225,805 16,061,953 (c) Nature and purpose of reserves Balance 31 December 88,567,973 61,311,798 82,249,449 57,023,644 The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised directly in equity, as described in note 1(m). Amounts are recognised in profit and loss when the associated hedge transaction affects (c)profit Nature and loss. and purpose of reserves The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised directly in equity, as described in note 1(m). Amounts are recognised in profit and loss when the associated hedge transaction affects profit and loss.

30

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008

NOTES TO THE FINANCIAL STATEMENTS NOTES31NOTE December 23.TO THE REMUNERATION 200 FINANCIAL8 (continued) STATEMENTS OF AUDITORS 31 December 2008 (continued)

NOTEDuring 23. the REMUNERATIyear the followingON OFfees AUDITORS were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms: NOTEDuring 23. the yearREMUNERATI the followingON OFfees AUDITORS were paid or payable for services provided by the auditor of the parent entity, its related Duringpractices the and year non the-related following audit fees firms: were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms: Consolidated Parent Entity Consolidated Parent Entity 2008 2007 2008 2007 2008$ 2007$ 2008$ 2007$ $ $ $ $ Assurance services AssuranceAudit services services AuditPricewaterhouseCoopers services Australian firm: PricewaterhouseCoopers Australian firm: Audit and review of financial reports and other 133,500 147,000 84,500 98,000 Auditaudit workand review under ofthe financial Corporations reports Act and 2001 other audit work under the Corporations Act 2001 133,500 147,000 84,500 98,000 Total remuneration for audit services 133,500 147,000 84,500 98,000 Total remuneration for audit services 133,500 147,000 84,500 98,000

NOTENOTE 2 24.4. CONTIN CONTINGENCIESGENCIES NOTEThe parent 24. CONTINentity andGENCIES consolidated entity had no contingent liabilities at 31 December 2008. The The parentparent entityentity andand consolidatedconsolidated entityentity had no contingent liabilities at 31 December 2002008.8.

NOTE 25. COMMITMENTS

NOTENOTE 2 25.5. COMMITMENTS COMMITMENTS Consolidated Parent Entity 2008Consolidated 2007 2008Parent Entity 2007 2008$ 2007$ 2008$ 2007$ (a) Capital Commitments $ $ $ $ (a) Capital Commitments Commitment in relation to a fixed price building Commitmentcontract not recognisedin relation toas aa fixedliability, price payable: building contract not recognised as a liability, payable: Within one year 5,558,461 10,392,492 5,558,461 10,392,492 Within one year 5,558,461 10,392,492 5,558,461 10,392,492 (b) Lease Commitments (b) Lease Commitments Commitments in relation to leases contracted for

Commitmentsat the reporting in daterelation but tonot leases recognised contracted as for liabilities, payable: at the reporting date but not recognised as liabilities, payable: Within one year 353,635 426,694 353,635 426,694 353,635 426,694 353,635 426,694 WithinLater than one oneyear year but not later than 5 years 187,467 233,456 187,467 233,456 187,467 233,456 187,467 233,456 Later than one5 years year but not later than 5 years - - - - Later than 5 years 541,102- 660,150- 541,102- 660,150- 541,102 660,150 541,102 660,150 Representing: Representing: Non-cancellable operating leases 109,547 220,506 109,547 220,506 NonFuture-cancellable finance charges operating on financeleases leases 109,547431,555 439,644220,506 109,547431,555 439,644220,506 Future finance charges on finance leases 431,55541,1052 439,644660,150 431,55541,1052 439,644660,150 541,102 660,150 541,102 660,150

31

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 31 December 2008 (continued)

NOTE 25. COMMITMENTS FOR EXPENDITURE (continued) NOTE 25. COMMITMENTS FOR EXPENDITURE (continued) (b) Lease Commitments (continued) (i) Operating Leases The Group leases various motor vehicles under non-cancellable operating leases expiring within one to four years.

Consolidated Parent Entity 2008 2007 2008 2007 $ $ $ $

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

Within one year 99,979 136,260 99,979 136,260 Later than one year but not later than 5 years 9,568 84,246 9,568 84,246 Later than 5 years - - - - 109,547 220,506 109,547 220,506

(ii) Finance Leases The Group leases various motor vehicles and plant and equipment with a carrying amount of $4,117,901 (2007: $4,151,285) under finance leases expiring within one to four years.

Consolidated Parent Entity 2008 2007 2008 2007 $ $ $ $

Commitments in relation to finance leases are payable as follows:

Within one year 2,505,083 2,485,748 2,505,083 2,485,748 Later than one year but not later than 5 years 2,217,415 2,305,551 2,217,415 2,305,551 Minimum lease payments 4,722,498 4,791,299 4,722,498 4,791,299 Less: Future finance charges 431,555 439,644 431,555 439,644 Total lease liabilities 4,290,943 4,351,655 4,290,943 4,351,655 Representing lease liabilities: Current (note 16) 2,251,427 2,195,314 2,251,427 2,195,314 Non-current (note 19) 2,039,516 2,156,341 2,039,516 2,156,341 4,290,943 4,351,655 4,290,943 4,351,655

The weighted average interest rate implicit in the leases is 8.56% (2007: 8.85%).

NOTE 26. RELATED PARTY TRANSACTIONS NOTE(a) Parent 26. entityRELATED PARTY TRANSACTIONS The ultimate parent entity within the Group is Bond University Limited. (a) Parent entity The(b) Subsidiariesultimate parent entity within the Group is Bond University Limited. Interests in subsidiaries are set out in note 27. (b) Subsidiaries Interests in subsidiaries are set out in note 27.

32 NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 (continued)

NOTE 26. RELATED PARTY TRANSACTIONS (continued) NOTE 26. RELATED PARTY TRANSACTIONS (continued) (c) Key management personnel compensation (c) Key management personnel compensation

Consolidated Parent Entity 2008 2007 2008 2007 $ $ $ $ Short-term employee benefits 2,115,695 1,935,578 2,115,695 1,935,578 Post-employment benefits 416,817 381,177 416,817 381,177 Termination benefits 100,179 - 100,179 - 2,632,691 2,316,755 2,632,691 2,316,755

(d) Transactions with related parties The following transactions occurred with related parties:

Parent Entity Subsidiary 2008 2007 $ $ Management fee revenue Lashkar Pty Ltd 3,449,067 4,838,052 Campus Operations Pty Ltd 7,065,649 3,936,886 Bond Innovation 1 Pty Ltd 25,998 - Bond R&D1 Pty Ltd 25,998 - Management fee expense Bond University Services Pty Ltd 4,818,741 9,138,432 Bond University Staff Services Pty Ltd 3,191,345 11,382,200 Accommodation and catering expense Campus Operations Pty Ltd 763,486 637,744 Audio visual revenue Campus Operations Pty Ltd - 1,326

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

Consolidated Parent Entity 2008 2007 2008 2007 $ $ $ $ Current payables Subsidiaries - - 582,101 4,303,877 Current receivables Bond University Foundation - 29,250 - 29,250 Bond University Trust - - 8,570 200

(f) Terms and conditions The above transactions were made on commercial terms and conditions and at market rates except where indicated. There are no fixed terms for the repayment of amounts advanced to Bond University Limited and the amounts advanced to Bond University Foundation and the Bond University Trust. All amounts payable are free of interest and unsecured. During the year Bond University Limited provided accounting and administration assistance to other entities in the wholly owned group and Bond University Foundation and the Bond University Trust. With the exception of Campus Operations Pty Ltd and Lashkar Pty Ltd, all accounting and administration assistance was provided free of charge.

33

NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008 31 December 2007 (continued) NOTES TO THE FINANCIAL STATEMENTS NOTE 31 December 27. SUBSIDIARIES 2007 (continued) NOTE 27. SUBSIDIARIES

NOTEThe consolidated 27. SUBSIDIARI financialES statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1(b). The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1(b). Country of Class of Cost of Parent Entity’s Name of Entity Equity Holding * Incorporation shares Investment Country of Class of Cost of Parent Entity’s Name of Entity Equity Holding * Incorporation shares Investment 2008 2007 2008 2007 2008$ 2007$ 2008% 2007% $ $ % % Bond University Services Pty Ltd Australia Ordinary 2 2 100 100 Bond University Services Pty Ltd Australia Ordinary 2 2 100 100 Bond University Staff Services Pty Australia Ordinary 2 2 100 100 Ltd Bond University Staff Services Pty Australia Ordinary 2 2 100 100 LtdCampus Operations Pty Ltd Australia Ordinary 2 2 100 100 CampusThemis Pty Operations Ltd Pty Ltd Australia Ordinary 2 2 100 100 ThemisLashkar Pty Pty Ltd Ltd Australia Ordinary 21 21 100 100 LashkarBond Innovation Pty Ltd 1 Pty Ltd Australia Ordinary 21 -1 100 100- Bond InnovationR&D 1 Pty Ltd 1 Pty Ltd Australia Ordinary 2 - 100 - Bond R&D 1 Pty Ltd Australia Ordinary 132 9- 100 -

* The proportion of ownership interest is equal to the proportion of voting power held. 13 9 In* The addition, proportion the ofconsolidated ownership interest financial is equal statements to the proportion also incorporate of voting power the assets,held. liabilities and results of the Bond University Trust which is under the control of the University. In addition, the consolidated financial statements also incorporate the assets, liabilities and results of the Bond University Trust which is under the control of the University.

NOTE 28. RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES NOTE 28. RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES NOTE 28. RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES Consolidated Parent Entity 2008Consolidated 2007 2008Parent Entity 2007 Inflows/2008 Inflows/2007 Inflows/2008 Inflows/2007 (Outflows)Inflows/ (Outflows)Inflows/ (Outflows)Inflows/ (Outflows)Inflows/ (Outflows)$ (Outflows)$ (Outflows)$ (Outflows)$ Profit for the year 27,256,175$ 14,326,294$ 25,225,805$ 16,061,954$

DepreciationProfit for the andyear amortisation 27,256,17510,403,712 14,326,2948,329,557 25,225,80510,399,924 16,061,9548,327,751 NetDepreciation (profit) loss and on amortisation sale of non- current assets 10,403,7148,1842 8,329,5573,312 10,399,92448,184 8,327,7517,767 Net (profit) loss on sale of financialnon-current assets assets at fair value through profit or loss 48,184- 1,5853,312 48,184- 7,7671,585 Net (profit) loss on sale of financial assets at fair value Fairthrough value profit (gains) or losslosses on financial assets at - 1,585 - 1,585 fair value through profit or loss 132,201 (149) 2,714 (149) Fair value (gains) losses on financial assets at Nonfair -valuecash throughdonations profit income or loss – transfer of financial assets 132,201 (149) 2,714 (149) from Bond University Foundation to Bond University Trust (357,892) - - - Non-cash donations income – transfer of financial assets (357,892) - - - Provisionfrom Bond for University doubtful Foundationdebts increase to Bond (decrease) University Trust 5,000 20,000 5,000 20,000 ChangeProvision in for operating doubtful assets debts andincrease liabilities (decrease) 5,000 20,000 5,000 20,000 Change (Increase) in operating decrease assets in trade and & liabilities other debtors (7,844,757) (3,671,481) (7,824,506) (3,531,734) (Increase) decrease in inventoriestrade & other debtors (7,84(33,197)4,757) (3,671,481)4,947 (7,824,506-) (3,531,734)- Increase(Increase) (decrease) decrease inin tradeinventories and other creditors and (33,197) 4,947 - - employee benefits 3,396,382 (150,420) 1,396,485 (685,490) Increase (decrease) in trade and other creditors and employee benefits 3,396,382 (150,420) 1,396,485 (685,490) Increase (decrease) in other liabilities 1,039,688 84,766 1,135,650 69,499 Increase (decrease) in other liabilities Net cash inflow from operating activities 34,045,491,039,6886 18,948,41184,766 30,389,2561,135,650 20,271,18369,499 Net cash inflow from operating activities 34,045,496 18,948,411 30,389,256 20,271,183

34

NOTES TO THE FINANCIAL STATEMENTS 31 December 2008

NOTES TO THE FINANCIAL STATEMENTS NOTE31 December 28. RECONCILIATION 2008 (continued) OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES (CONTINUED)

NOTE 28. RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES Bond University(CONTINUED) Limited bills and collects student accommodation and food income on behalf of Campus Operations Pty Ltd. Fitness Centre income is also banked by Bond University Limited. The total income collected by Bond University Limited on behalf of CampusBond University Operations Limited Pty Ltd bills for andthe collectsyear ended student 31 December accommodation 2008 was and $7,932,666 food income (2007: on behalf $7,295,890). of Campus Operations Pty Ltd. Fitness Centre income is also banked by Bond University Limited. The total income collected by Bond University Limited on behalf of Campus Operations Pty Ltd for the year ended 31 December 2008 was $7,932,666 (2007: $7,295,890).

NOTENOTE 29. 29 . NON-CAS NON-CASHH INVESTINGINVESTING ANDAND FINANCING FINANCING ACTIVITIES ACTIVITIES

Consolidated Parent Entity 2008 2007 2008 2007 $ $ $ $ Acquisition of plant and equipment by means of 2,513,479 1,916,744 2,513,479 1,916,744 finance leases

NOTE 30. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE Subsequent to balance date, the University Council resolved to allocate $5.0 million of the University’s 2008 surplus to the Bond NOTEUniversity 30. EVENTSEndowment OCCURRING Fund, which AFTER together T HwithE BALANCE other donated SHEET funds DATE brings the Endowment Fund to a total of $15.5 million.

Subsequent to balance date, the University Council resolved to allocate $5.0 million of the University’s 2008 surplus to the Bond University Endowment Fund, which together with other donated funds brings the Endowment Fund to a total of $15.5 million.

35

DIRECTORS’ DECLARATION

In the directors’ opinion:

(a) the financial statements and notes set out on pages 8 to 35 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and (ii) giving a true and fair view of the company’s and consolidated entity’s financial position as at 31 December 2008 and of their performance, as represented by the results of their operations, changes in equity and their cash flows, for the financial year ended on that date; and (b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

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

T C Rowe Director and Chancellor

Brisbane 17 April 2009

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PricewaterhouseCoopers ABN 52 780 433 757

Riverside Centre 123 Eagle Street

BRISBANE QLD 4000 GPO Box 150 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BRISBANE QLD 4001 BOND UNIVERSITY LIMITED DX 77 Brisbane Australia www.pwc.com/au INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF Telephone +61 7 3257 5000 BOND UNIVERSITY LIMITED Facsimile +61 7 3257 5999

Report on the financial report Report on the financial report We have audited the accompanying financial report of Bond University Limited (the company), which comprises the Webalance have audited sheet as the at accompanying31 December financial2008, and report the income of Bond statement, University statement Limited (theof recognised company), income which comprisesand expense the and balancecash flow sheet statement as at 31 Decemberfor the year 2008, ended and on the that income date, statement,a summary statement of significant of recognised accounting income policies, and expense other expl andanatory cash flownotes statement and the directorsfor the year’ declaration ended on thatfor bothdate, Bonda summary University of significant Limited accountingand the Bond policies, University other Limitedexplanatory Group notes (the and theconsolidated directors’ declaration entity). The for consolidated both Bond University entity comprises Limited andthe companythe Bond Universityand the entities Limited it controlled Group (the at consolidated the year’s end or entity).from time The consolidatedto time during entity the financialcomprises year. the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ responsibility for the financial report Directors’ responsibility for the financial report The directors of the company are responsible for the preparation and fair presentation of the financial report in Theaccordance directors withof the Australian company areAccounting responsible Standards for the preparation (including and the fairAustralian presentation Accounting of the financial Interpretations) report in andaccordance the withCorporations Australian ActAccounting 2001. This Standards responsibility (including includes the Australian establishing Accounting and maintaining Interpretations) internal and control the Corporationss relevant toAct the 2001preparation. This responsibility and fair presentation includes establishing of the financial and maintaining report that internalis free from controls material relevant misstatement, to the preparation whether and due fair to fraud presentationor error; selecting of the financial and applying report appropriate that is free fromaccounti materialng policies; misstatement, and making whether accounting due to fraud estimates or error; that selecting are reasonable and applyingin the circumstances. appropriate accounting In Note 1(a),policies; the directorsand making also accounting state, in accordanceestimates that with are Accounting reasonable in Standard the circumstances. AASB 101 In NotePresentation 1(a), the directorsof Financial also Statements,state, in accordance that compliance with Accounting with the Standard Australian AASB equival 101 entsPresentation to International of Financial Financial StatementsReporting, thatStandards compliance ensures with that the the Australian financial equivalents report, comprising to International the financial Financial statements Reporting and Standards notes, compliesensures that with the financialInternational report, Financial comprising Reporting the financial Standards. statements and notes, complies with International Financial Reporting Standards.

Auditor’sAuditor ’responsibilitys responsibility

OurOur responsibility responsibility is isto toexpress express an anopinion opinion on theon thefinancial financial report report based based on ouron audit.our audit. We conductedWe conducted our audit our inaudit accordance in withaccordance Australian with Auditing Australian Standards. Auditing These Standards. Auditing TheseStandards Auditing require Standards that we comply require with that relevant we comply ethical with requirements relevant relatingethical to requirements audit engagements relating and to planaudit and engagements perform the and audit plan to obtainand perfor reasonablem the auditassurance to obtain whether reasonable the financial assurance report is freewhether from materialthe financial misstatement. report is free from material misstatement.

AnAn audit audit involves involves performing performing procedures procedures to obtain to obtain audit audit evidence evidence about about the amounts the amounts and disclosures and disclosures in the infinancial the financial report.report. The The procedures procedures selected selected depend depend on theon theauditor’s auditor judgement,’s judgement, including including the assessment the assessment of the ofrisks the of risks material of material misstatementmisstatement of of the the financial financial report, report whether, whether due due to fraudto fraud or erroror error.. In making In making those thoserisk assessments, risk assessments, the auditor the auditor considers internalconsiders control internal relevant control to the relevant entity’s to preparation the entity’ ands pre fairparation presentation and fair of presentation the financial of report the financial in order toreport design in auditorder to proceduresdesign audit that procedures are appropriate that arein the appropriate circumstances, in the but circumstances, not for the purpose but not of for expressing the purpose an opinion of expressing on the ef anfectiveness opinion on ofthe the effectiveness entity’s internal of thecontrol. entity An’s internalaudit also control. includes An evaluating audit also the inc appropriatenessludes evaluating of accountingthe appropriateness policies used of accounting and the reasonablenesspolicies used ofand accounting the reasonableness estimates madeof accounting by the directors, estimates as wellmade as by evaluating the directors, the overall as well presentation as evaluating of the the financial overall report.presentation of the financial report.

OurOur procedures procedures include include reading reading the the other other information informat ionin the in Annualthe Annual Report Report to determine to determine whether whether it contains it contains any material any inconsistenciesmaterial inconsistencies with the financial with the report. financial report.

Liability is limited by a scheme approved under Professional Standards Legislation. Liability is limited by a scheme approved under Professional Standards Legislation.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BOND UNIVERSITY LIMITED (continued)

For further explanation of an audit, visit our website http://www.pwc.com/au/financialstatementaudit.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s opinion

In our opinion:

(a) the financial report of Bond University Limited is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 31 December 2008 and of their performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

(b) the financial report and notes also comply with International Financial Reporting Standards as disclosed in Note 1(a).

Matters relating to the electronic presentation of the audited financial report

This auditor’s report relates to the financial report of Bond University Limited (the company) for the year ended 31 December 2008 included on the Bond University Limited web site. The company’s directors are responsible for the integrity of the Bond University Limited web site. We have not been engaged to report on the integrity of this web site. The auditor’s report refers only to the financial report named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements or the remuneration report. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on this web site.

PricewaterhouseCoopers

M Linz Brisbane Partner 17 April 2009

Liability is limited by a scheme approved under Professional Standards Legislation.

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