annual report 2014 - parliament of victoria...the gordon annual report 2014 dear minister it is with...

Annual Report 2014

• The Annual Report 2014

• © The Gordon 2015

• Published by:

• The Gordon• Private Bag 1• Geelong Mail Centre• Victoria, Australia 3221• • ABN: 27 241 053 246• TOID: 3044 • CRICOS No: 00011G• • Annual Report enquiries:• Ph: (03) 5225 0631• Email: [email protected] • • The Gordon Annual Reports 2014 and 2013 are

available online at thegordon.edu.au• • Printed March 2015

Contents

Board Chair’s Welcome 2

The Organisation History 3

The Gordon Today 3

Organisational Chart 4

Executive and Senior Management 5

Board and Governance 7

Board Members 9

The Year in Review CEO’s Message 12

Summary of Operating Results 13

Enrolment Statistics 14

2014 – 2017 Strategic Plan: Year One 15

Teaching and Learning Highlights 20

VCE and VCAL Outcomes 23

Skilling the Bay 24

Partnerships 26

Supporting our Community 29

Marketing and Promotion 31

International Operations 32

The Formalities Risk Management Attestation Statement 33

Workforce and Employment 34

Environmental Performance 36

Occupational Health and Safety 37

Fees and Charges 38

Further Compliance Information 39

Disclosure Index 41

The Financial Report Gordon Institute of TAFE FIN 2

Gotec Limited FIN 54

1

The Gordon Annual Report 2014

Dear Minister

It is with pleasure that I present The Gordon’s 2014 Annual Report. The report comprises commentary on the operations of the Institute, showcases areas of achievement and includes detailed audited financial statements.

Throughout 2014, The Gordon has remained committed to its role in sustaining regional communities. This includes delivering an exceptional student experience, retraining retrenched workers, supporting the skills development needs of new industries, and continuing its lead role in the Skilling the Bay project.

Financially, the Institute experienced an operating deficit; whilst this deficit is disappointing, it should be read in the context of the year. The Institute invested $2.7m in a number of key projects including expansion into Wyndham, continued development of the Student Management System (SMS) and other minor works. In 2013, the value of the SMS was transferred from Government at $17.4m. This asset was independently valued at $4.0m and thus, the Institute sought to have it impaired. Although there is no cash impact, this is reflected in the Institute’s overall financial performance.

During 2014 the Board has worked closely with CEO Lisa Line, and the executive team to progress implementation of The Gordon’s 2014 - 2017 Strategic Plan. A solid foundation has been laid in the first year of the plan for achievement of our strategic priorities, and ultimately our vision for the future. As a Board, we have also maintained a strong focus on governance responsibilities at a time when there are increasing challenges and demands facing the VET sector. The Gordon remains committed to working in partnership with Government and other stakeholders to help shape new policy direction for the sector.

On behalf of the Board, I would like to acknowledge the efforts of Gordon staff during 2014. The positive outcomes delivered to students and partners are testament to the dedication and capability of all our staff. I would also like to thank CEO Lisa Line for her outstanding leadership during what has been a challenging year and thank my fellow Board members for their continued commitment and support.

Finally, I would like to recognise the achievements of our students. Gordon students continue to win state and national awards for excellence, with many graduates going on to make substantial contributions to their respective communities and industries.

The Board is confident that The Gordon is well positioned to achieve its strategic objectives. I look forward to the Institute building upon its proud history and reputation as a vocational education and training provider of choice.

Brian WilliamsonBoard Chair

March 2015

Board Chair’s Welcome

2 The Gordon Annual Report 2014

The Organisation

Serving the Geelong and surrounding communities for 127 years, The Gordon’s role continues to be the delivery of quality education and training to meet the needs of the current and future workforce, as well as providing clear pathways to further study.

In 2014, The Gordon offered more than 300 nationally accredited and short courses across two main campuses in Geelong City and East Geelong, as well as the newly opened Werribee Learning Centre. The Institute also delivered programs at the Colac Trade Training Centre, Barwon Prison, and within a range of workplaces.

The Gordon’s suite of accredited courses cover Certificate I through to Advanced Diploma qualifications making it one of the most comprehensive in Victoria. Almost 3,500 apprenticeships and traineeships are also managed by the Institute Australia-wide.

The Gordon registered approximately 19,500 enrolments in 2014, equating to almost 14,500 students studying via a range of methods including on-campus, off-campus, full and part-time, online, and in industry.

With approximately 650 staff and more than 60 per cent of students coming from the wider Geelong region, the Institute plays a key role in proactively assisting the region’s economic and social development.

The Gordon works in partnership with the region’s secondary schools, Deakin University, employers and the community to deliver positive learning outcomes. The Institute also continues to focus on building its international delivery, particularly in the Asian region.

The Gordon’s objectives, powers and functions are set out in the Constitution adopted by the order of the Board in 2013. In 2014, The Gordon reported to Parliament through:

• The Hon. Peter Hall, MLC, Minister for Higher Education and Skills (1 January — 17 March 2014)

• The Hon. Nick Wakeling, MP, Minister for Higher Education and Skills (17 March — 3 December 2014)

• The Hon. Steve Herbert, MP, Minister for Training and Skills (3 December 2014 — 31 December 2014), following the State election on 29 November 2014.

HistoryEstablished in 1887, The Gordon originated as a mechanics institute and night school for tradespeople seeking technical training. Its first building was a single-storey hall on Fenwick Street used for lectures and exhibitions. This building still stands today and houses the Davidson Restaurant.

The Gordon name was inspired by the heroic exploits of British general Charles Gordon, who died during the siege of Khartoum in Africa in 1885. The people of Geelong decided to build a memorial in his honour, and The Gordon was established to meet the local technical training needs of the new industrial era.

The Gordon todayToday The Gordon is one of the largest regional TAFEs in Victoria; a public education and training organisation operating under Victorian Government legislation.

3

Organisational Chart

Chief Executive OfficerLisa Line

Deputy CEODarren Gray(Appointed April 2014)

Chief Operating OfficerJoe Ormeno(Appointed July 2014)

Board ChairBrian Williamson Catherine Birrell

Brendan Foran

Allana Goldsworthy

Stephen Griffin

Jodi Heath

Deputy ChairJustin Giddings Denis Peacock

Catherine Sullivan (Resigned 27.2.14)

Kerry Thompson (Appointed 25.8.14)

The Gordon Board

Executive

Head of Student and Business SupportStella Garcia

Head of Strategic HR and DevelopmentSarah Barth

Enterprise Manager Geelong Technical Education Centre

Michael Metzger

Enterprise Manager Living WellAndrew Palmer

Head of Innovation and StrategyDr. John Flett

Enterprise Manager Creative BusinessCarl Bentley

Enterprise Manager Smart TechnologiesMatthew Allsopp

Enterprise Manager Constructing FuturesCameron Quinten

Senior Management


ExecutiveChief Executive Officer

Lisa LinePGDipPersonnelMgt, FAHRI, Chartered FCIPD

Lisa was appointed to the CEO position in December 2013. Prior to this, she was Acting CEO and Deputy CEO/Chief Operating Officer. Lisa had previously been with The Gordon in the positions of Director Organisation Development, Acting Executive Director Corporate Services and Senior Manager Human Resources. Lisa’s former roles also included Chief Operating Officer Plymouth University, UK; Group HR Manager (Victoria/Tasmania) with the Just Group; and several senior HR and general management roles with the John Lewis Partnership, UK.

Deputy Chief Executive Officer

Darren GrayDipPM, BA, BEd, MBA

(Appointed April 2014)

Darren joined The Gordon in January 2009 and has held senior positions at the Institute over six years, including Head of Innovation and Strategy in 2013. Prior to commencing at The Gordon, Darren worked in a variety of roles within Local Government. His responsibilities included the delivery of strategic projects focused on economic and community development within regional communities, primarily in the Geelong region.

Chief Operating Officer

Joe OrmenoBCom (FinAcc), CPA

(Appointed July 2014)

Joe joined The Gordon in February 2009 as Chief Finance Officer, and continued this role in 2014 alongside his new appointment to Chief Operating Officer in June. Prior to The Gordon, Joe spent five years as General Manager Finance and Administration with St. Laurence Community Services. He had also held various executive roles in corporate services within the private and not-for-profit sectors.

Senior ManagementChief Finance Officer

Joe OrmenoSee bio for Chief Operating Officer.

Head of Student and Business Support

Stella GarciaCertIVTrainAssess, DipBus (FLM)

Stella joined The Gordon in May 2003 and was appointed Director of Organisation Development in January 2011. During her 11 years with The Gordon Stella has held a number of senior positions including Senior Manager Student Administration and acting Senior Manager Student Services. In 2013, she was appointed Head of Student and Business Support.

Head of Innovation and Strategy

Dr. John FlettCertIVTrainAssess, DipBusAdmin, DipBusMgt, GradCertOrgChange, GradDipEd, BAgSc(Hons), PhD

(Appointed July 2014)

John joined The Gordon in October 2009 as Skills Centre Manager for Essential Business Skills. John moved into the role of Manager of Teaching Excellence and Design in 2012 and is Chair of the Board of Studies, as well as responsible for managing all online learning at The Gordon. In 2014, he was appointed Head of Innovation and Strategy.

Head of Strategic Human Resources and Development

Sarah BarthHNDip (BiomedSci), ProfDipHR

Sarah joined The Gordon in 2009 as Senior Manager, Human Resources. During her tenure, Sarah has overseen, and been part of a number of key changes and projects within the Institute. Prior to commencing work at The Gordon, Sarah held a number of senior HR positions in the UK, the most recent as Assistant Director of Human Resources in a large, acute National Health Service (NHS) hospital. Sarah also represents the Australian Human Resources Institute (AHRI) as Co-Convenor and Committee member of the regional AHRI Geelong network.

Executive and Senior Management

5

Enterprise Manager – Constructing Futures

Cameron QuintenCertIVTAA, DipBus, DipSust, BSc(Hons), BEd(Sec), GDipAppSc, AIMM, GAICD

Cameron (Cam) joined The Gordon in 2009 and has worked in various roles including Business Development Manager, taking up his most recent role as Enterprise Manager in 2013. Cam has worked in the education and vocational training sector since 1991 with Deakin University, Victoria University and a number of private training providers. He has extensive experience in various teaching, support and management roles.

Enterprise Manager – Living Well

Andrew PalmerDipIntlBus, BEd(Sec), BEd(SocSci), MEd (TESOL)

Andrew commenced at The Gordon in 2009 as Skills Centre Manager for Language and Further Education. In 2013 he took on the role of Enterprise Manager for Living Well. Prior to joining The Gordon, Andrew worked for 10 years in international education in Japan and New Zealand. Returning to Australia in 2006, Andrew joined the TAFE sector as Box Hill Institute’s Director of Studies for ELICOS.

Enterprise Manager – Creative Business

Carl BentleyAssDipEng, DipFLM

Carl joined the Gordon in 1999 and was appointed Enterprise Manager for Creative Business in January 2013. During his fifteen years with The Gordon, Carl has held a number of senior positions including Senior Manager International Education and Senior Manager Quality Assurance and Risk Management.

Enterprise Manager – Smart Technologies

Matthew AllsoppCertIIIAuto, CertIVAuto, CertIVFLM, CertIVTAE, DipVET, AdvDipBusMgt

Matthew joined The Gordon in 2001 as an automotive trainer and in 2009 was appointed acting Education Manager. In 2010, Matthew was appointed Automotive Coordinator and progressed to Program Manager for AutoTech in 2011, followed by Enterprise Manager for Smart Technologies in 2013.

Enterprise Manager – Geelong Technical Education Centre (GTEC)

Michael MetzgerCertIVTrainAssess, DipSmlBusMgt, DipWriPhoto, BA, VIT, TSTC, MACE

Michael joined The Gordon in April 2009 and was appointed Skills Centre Manager for the Geelong Technical Education Centre (GTEC). During the following four years, GTEC has grown to become one of the Institute’s five educational enterprises. Michael was appointed as GTEC Enterprise Manager in 2013.


The Gordon is governed by a Board, established under the Education and Training Reform Act 2006 (amended on 1 January 2014).

FunctionsThe Board’s business is consistent with the powers and functions set out in the Institute Constitution and Board Charter. The Institute’s auditor regularly audits Board and Board Committee minutes and agenda papers and has certified that no ultra vires actions have occurred.

Values of the BoardThe values of the Board are reflected in the Board Code of Conduct which is consistent with The Gordon Code of Conduct. As a values-based organisation, the Board has developed its own trademark behaviours which demonstrate its values. The 2014-2017 Strategic Plan sets out the Institute’s strategic direction and strategic priorities.

Powers of the BoardIn addition to matters expressly required by law to be approved by the Board, powers specifically reserved for the Board are as follows:

Reviewing and ratifying:

• risk management processes and systems of internal control and compliance with codes of conduct and legal compliance;

• financial and other reporting; and

• major capital expenditure, capital management, and acquisitions and disposals of assets.

Approving:

• the strategic plan;

• the budget, at least annually;

• the appointment of Board Secretary;

• significant changes to organisational structure; and

• the acquisition, establishment, disposal or cessation of any significant business of the Institute.

Role and Responsibilities of the BoardThe Board is responsible to the Victorian Government for the overall strategy, governance and performance of The Gordon’s functions. The role of the Board includes the following:

Strategic Direction

• Provide strategic directions and assist management to develop and monitor strategic and performance objectives.

• Oversee performance indicators and targets and review The Gordon’s performance against those targets.

• Guide the preparation of the strategic plan and obtain approval of the plan from the responsible Minister.

Financial Management and Governance

• Ensure best practice financial management and governance policies and procedures (that comply with the legal requirements of Victorian public sector bodies) are established and maintained.

• Develop and implement procurement policies and procedures for letting contracts or authorising expenditure on the supply of goods or services or the carrying out of works for the Institute.

Risk Management

• Ensure an effective framework is developed to identify, assess, monitor and manage the significant financial risks that The Gordon is exposed to in the course of its activities and responsibilities.

Board and Governance

7

Summary of the performance and activities of the BoardKey priorities and major decisions included:

• ensuring all Governance obligations were met by the Board, including the review of all Institute Rules and Committee Charters;

• overseeing the performance indicators and targets, and reviewing The Gordon’s performance against those targets;

• progressing the Institute’s Master Facilities Plan that will provide a strategic framework for the ongoing decision making with respect to physical assets, future development and funding submissions;

• overseeing the overall risk management framework; the management of financial risks by ensuring an effective framework is in place to identify, assess, monitor and manage the financial risks that The Gordon is exposed to in the course of its activities and responsibilities;

• monitoring the performance of the Institute’s new Student Management System;

• monitoring the actions and progress of the strategic directions of the Institute that are outlined in the 2014-2017 Strategic Plan;

• closely monitoring the financial performance, and in particular, the cash flow management of the Institute given the demand-driven funding model and new Student Management System; and

• continuous improvement of the Institute’s Occupational Health and Safety performance.

Summary of trainingThe Board held a strategic planning workshop in July which included discussion on key performance indicators, growth strategies, asset maximisation/income diversification and blended learning delivery. Given the importance of the 2014-2017 Strategic Plan, a number of Board meetings during the year dedicated considerable time and focus on reviewing the status of strategic initiatives.

The Board continued to develop its knowledge of critical items such as monthly cash flow, reporting of financial performance under the new funding arrangements, and the impact of the new Student Management System. The Chief Finance Officer attended Board meetings and time was set aside at each meeting to address these items.


Board Chair

Brian Laurence WilliamsonDipMechEng, TTTC, FIEA

Brian is currently serving his twelfth consecutive year as Chair of The Gordon Board and has served as a Board member for 18 years. He is Chair of the Executive Committee, Remuneration Committee and a member of the Audit and Risk Management Committee. Brian was formerly the Chief Engineer, Test/Prototype Operations at Ford Motor Company. He led the development of the Ford Discovery Centre and previously held the position of Chairman of Trustees.

Deputy Chair

Justin Mark GiddingsAdvDipMgt, BCom (EconAcc), MBA

Justin joined The Gordon Board in 2012 and is a member of the Audit and Risk Management, Executive, and Remuneration Committees. He became CEO of Avalon Airport in December 2008. Previously Justin was the Commercial and Operations Manager at Essendon Airport for seven years. Justin is also a fully qualified Aircraft Maintenance Engineer.

Catherine Mary BirrellBBus, MHSc

Catherine (Kate) joined The Gordon Board in 2009 and is a member of the Audit and Risk Management Committee, Executive, and Remuneration Committees. An experienced senior nurse leader for the past 25 years, Kate’s most recent role was at a national level as Group Director of Nursing for St John of God Health Care. She is also actively involved in a nursing capacity building project in East Timor, and a member of the Australian Institute of Company Directors.

Brendan Joseph ForanAdvDipBM, MBA

Brendan joined The Gordon Board in 2012. He is currently the National Chief Executive Officer of Greening Australia Ltd. Brendan previously held the position of Corporate Affairs Manager – Eastern States at Alcoa of Australia.

Allana Beatrice Goldsworthy BA/LLB, AIAM

Allana has been a member of The Gordon Board for more than 19 years and is Chair of the Audit and Risk Management Committee. Allana is a barrister with a diverse legal background, and has formerly served as a Councillor with the City of Greater Geelong.

Stephen James GriffinDipEd, BAppSc, GDipLGM, MBM

Stephen joined The Gordon Board in 2012. Until May 2014 Stephen was the Chief Executive Officer of the City of Greater Geelong and previously held a number of senior positions at both the City of Greater Geelong and Wyndham City Council. He is currently the Chief Executive Officer of the Victoria State Emergency Service and is also a board member of Procurement Australia. Stephen’s background includes volunteer involvement in Surf Lifesaving and the Geelong Falcons TAC Cup football team.

Jodi Nicole HeathMBA, GAICD

Jodi joined The Gordon Board in 2010. She is currently the Executive Manager to the Group Executive Personal Banking, National Australia Bank (NAB). Prior to this Jodi was the Regional Executive for Geelong and South West for NAB. Jodi is involved in a range of high profile business committees and memberships in the Geelong Region, including the Deputy Chair of Barwon Water.

Denis Scott PeacockBEd, CPA

Denis joined The Gordon Board in 2010 and is a member of the Audit and Risk Management Committee. He is a Certified Practising Accountant, Registered Company Auditor and a member of the Governance Institute of Australia. Denis is a former Gordon employee, having held numerous teaching and management positions with the organisation between 1981 and 2007. He also holds a Board position at G-Force Recruitment Pty Ltd.

Board Members

9

Catherine Coupar SullivanBAppSc (Planning)

(Resigned 27.2.14)

Catherine (Kate) joined The Gordon Board in 2010 and is currently Director Planning and Environment at the Surf Coast Shire. Kate was previously the General Manager Economic Development and Planning at the City of Greater Geelong. Kate is a skilled project manager and consultant with over 25 years’ experience, having held roles and consulted to a range of local governments and national companies including Telstra and ANZ.

Kerry Joy ThompsonBBus, GradDipMgt, GAICD

(Appointed 25.8.14)

Kerry joined The Gordon Board in 2014. She currently holds the position of Chief Executive Officer of the City of Wyndham and previously was Chief Executive Officer at the City of Maribyrnong, and held senior positions at the City of Melbourne and the City of Greater Geelong. Kerry is Chair of the Western Transport Alliance, and a Board member of Destination Melbourne and the Institute of Public Administration.

Executive CommitteeThe Executive Committee’s purpose is to act for, and on behalf of, the Board from time to time. The role of the Executive Committee is to:

• monitor the performance of the CEO in relation to contract and delegations;

• make recommendations to the Minister regarding appointments to the Board;

• approve the Board agenda;

• review any proposed changes to the Board reporting format;

• receive updates from the CEO on Institute strategic and operational performance and any other relevant items;

• act as a reference point for the CEO in emergencies;

• act on behalf of the Board on urgent matters which arise between Board meetings;

• consider matters referred to it by the Board or the CEO;

• consider other matters, as appropriate.

MembershipBrian Williamson (Chair)Justin Giddings Kate Birrell

Audit and Risk Management CommitteeThe Audit and Risk Management Committee has oversight of:

• financial performance monitoring and the financial reporting process, including the annual financial statements;

• the scope of work, performance and independence of the internal auditor;

• recommending to the Board the engagement and, if required, the dismissal of any internal auditor;

• the scope of work, independence and performance of the external auditor;

• the operation and implementation of the risk management framework;

• matters of accountability and internal control affecting the operations of The Gordon;

• the effectiveness of The Gordon’s management information systems (including information technology) and other systems of internal control;

• the acceptability of, and correct accounting treatment for, and disclosure of significant transactions which are not part of The Gordon’s normal course of business;

• the approval and recommendation, where appropriate, to the Board of proposed accounting policies and changes in those policies; and

• management’s monitoring compliance with laws and regulations and its own Code of Conduct and Code of Financial Practice.

MembershipAllana Goldsworthy (Chair)Brian WilliamsonJustin Giddings Kate Birrell Denis Peacock


Remuneration CommitteeThe Remuneration Committee’s purpose is to:

• implement the remuneration principles and procedures in line with the Ministerial Directions as required by the Government Sector Executive Remuneration Panel (GSERP);

• within the limitation of legislation, government policy and industrial awards, make recommendations where permitted, on matters of remuneration of the CEO and other Executive Officer positions;

• provide assurance to the Board regarding the effectiveness, integrity and compliance of the Institute’s executive remuneration policies and practices;

• approve the CEO’s remuneration and remuneration of all other Executive Officer positions;

• approve performance-related incentive payments for the CEO and all other Executive Officer positions;

• oversee application of remuneration policy across the Institute;

• ensure the disclosure in the Annual Report of Director and Executive Remuneration in accordance with regulatory requirements and good governance practices; and

• advise the CEO on other remuneration matters, as appropriate.

MembershipBrian Williamson (Chair)Justin Giddings Kate Birrell

Summary of meeting attendance by Board membersBoard: 10 Meetings

Brian Williamson – 9

Justin Giddings – 9

Kate Birrell – 7

Brendan Foran – 8

Allana Goldsworthy – 8

Steve Griffin – 8

Jodi Heath – 7

Denis Peacock – 9

Kate Sullivan – 0

Kerry Thompson – 3

Board Executive: 8 Meetings



Kate Birrell – 7

Audit and Risk Management Committee: 4 Meetings

Allana Goldsworthy – 4



Kate Birrell – 3

Denis Peacock – 3

Remuneration Committee: 1 Meeting



Kate Birrell – 0

11

During 2014, extensive work has taken place to provide the foundation for achieving our strategic priorities and ultimately, our vision for the future. The development and implementation of strategies to build Institute sustainability have been a particular focus.

The Gordon has continued to deliver positive outcomes for students, community and industry partners. In particular, we have focused on supporting the Geelong region during a period of significant industry restructuring. We have assisted many workers to retrain or upskill for new job opportunities, and have been working in partnership to support skills development for new and emerging industries.

The provision of a positive student learning experience is fundamental to what we do, and independent benchmarking data shows that we are tracking well in this regard. The National Centre for Vocational Education Research’s annual student outcomes report highlights we have high levels of student satisfaction and employment outcomes that are well above the ‘All VET providers VIC’ average.

During the year, the Institute reaffirmed its strong relationship with Deakin University by renewing a Memorandum of Understanding. In addition, there were two other notable Deakin/Gordon partnership milestones achieved which included opening of the Werribee Learning Centre and launch of the Deakin/Gordon Guaranteed Pathways Program.

We received a commitment of $4.6 million in Government funding to support implementation of The Gordon’s Blended Learning Delivery project (BlendED). This funding will accelerate our capacity to deliver digitally enabled programs. The BlendED project aims to meet the changing learning needs of our students, and will support other strategic initiatives including expansion into new markets and diversification of income.

We have continued to work closely with both Northern Futures and the Whittington Works Alliance which have delivered exceptional outcomes for their respective communities. Our partnerships with secondary schools have continued with The Gordon’s VET in Schools program growing strongly, and partnerships now in place with Trade Training Centres located in Wyndham, Colac and Geelong.

Our regional leadership role in the Skilling the Bay project, delivered in partnership with Deakin University and the Victorian Government, saw the achievement of a number of major milestones during the year, notably the opening of the Geelong Workforce Development Centre. The Centre provides much needed career planning and job searching assistance to retrenched workers and their families.

2014 was also a year of awards. Gordon students won a number of major competitions including gold, silver and bronze medals at the WorldSkills Australia National Competition in Perth. The Gordon was also delighted to receive the Health Promoting Workplace Award at the Geelong Business Excellence Awards. There have been many other wonderful achievements by both students and staff.

I would like to take this opportunity to acknowledge the professionalism and hard work of staff during what has been a challenging year. I acknowledge the demands posed by the implementation of a new Student Management System and numerous process changes. The positive student and partner outcomes are made possible by the talent and tremendous dedication of our staff. I would like to thank The Gordon Board members for their direction and guidance during the year. We have also received outstanding support from the local community.

In closing, 2014 has been a foundation year for implementation of our new strategic plan. We remain committed to working in collaboration to deliver exceptional student outcomes, and to maximise our contribution to the growth and prosperity of the communities in which we operate.

Lisa Line CEO

March 2015

CEO’s Message

The Year in Review


2014 was a challenging year financially for The Gordon. The financial result demonstrates the challenges the Institute faced in light of changes to our funding model and maintaining control over expenditure without adversely impacting on the quality of education. Overall revenue exceeded budget expectations for 2014. There was a commensurate rise in costs which resulted in a modest operating deficit. Within this deficit though was $2.7m of expenditure funded from Institute reserves for important programs such as the expansion into Wyndham, continued development of the Student Management System and other minor works. In 2013, the Victorian State Government transferred the Student Management System to The Gordon at a value of $17.4m. The Institute sought to have the asset impaired. The SMS valuation came in at $4.0m, resulting in an overall impairment, including the Institute’s own investments, of $14.3m.

Summary of Operating Results2010 2011 2012 2013 2014

$’000 $’000 $’000 $’000 $’000

Working Capital

Current Assets 28,055 49,498 62,562 64,990 65,399

Less: Current Liabilities

7,846 9,233 11,641 10,216 12,340

Net Working Capital

20,209 40,265 50,921 54,774 53,059

Net Working Capital Ratio

3.58 5.36 5.37 6.36 5.50

Financial Results

Operating Revenue 69,831 96,063 97,480 73,532 79,313

Operating Expenditures*

67,573 81,629 86,435 74,101 79,786

Operating Surplus (Deficit)**

2,258 14,434 11,045 (569) (473)

Contact Hours

Total SCH ’000 5,595 7,654 8,422 6,598 6,319

Fee for Service $’000

7,448 5,824 6,091 5,056 5,236

Significant events since Balance Date

There have been no events since balance date which will have a significant effect on the operations of The Gordon in future years.

Ex–Gratia Payments

The Gordon did not make any ex-gratia payments during 2014.

Audit Committee Review and Recommendation

A financial statement was reviewed and recommended by the Audit and Risk Management Committee at the meeting held on 26 February 2015.

ConsultanciesIn 2014, three consultancies were used with fees payable to each of $10,000 or more. The combined amount for these services was $48,765 (excl. GST). Consultancy details are made available on the Institute’s website thegordon.edu.au. Two other consultancy services were utilised during the year with respective fees payable of under $10,000, representing a total expenditure of $11,050 (excl. GST).

* Note: Operating Expenditure includes Depreciation and Long Service Leave expenses that are both unfunded liabilities of the Institute. For consistency and comparability, the Long Service Leave has been calculated using the Department of Treasury and Finance Present Value Model. ** Operating Surplus/(Deficit) including Abnormal and Extraordinary items

13

Consultant Purpose of Consultancy

Total Approved Project Fee (excluding GST)

Expenditure 2014 (excluding GST)

Future expenditure (excluding GST)

Acquenta Consulting

Facilities management advice

$15,840 $15,840 NIL

Nous Group Performance management framework development

$11,475 $11,475 NIL

Anstra & Associates Pty Ltd

Investment Logic workshops and reports

$21,450 $21,450 NIL

Enrolment Statistics


Enrolments by Age and Status

(Total = 14,732)(Total = 4,746)

0 1000 2000 3000 4000 5000 6000 7000 8000

Part-time Full-time

36+

26-35

19-25

0-18

Enrolments by Age and Status

Total = 6,518

Total = 4,184

Total = 3,035

Total = 5,741

Enrolments by Funding and AQF LevelEnrolments by Funding and AQF Level

AQF Level 0-1-2(Total 3856)

AQF Level 5-6+(Total 2,347)

AQF Level 3-4(Total 13,275)

0 2,000 4,000 6,000 8,000 10,000

Fee-for-Service and Other

Profile

Other Trainees

Trade Apprentices Total = 3,490

Total = 664

Total = 9,774

Total = 5,550

Student Contact Hours by Funding and AQF LevelStudent Contact Hours by Funding and AQF Level

AQF Level 0-1-2(Total 823,092)

AQF Level 5-6+(Total 954,706)

AQF Level 3-4(Total 5,807,344)

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000

Fee-for-Service and Other

Profile

Other Trainees

Trade Apprentices Total = 831,343

Total = 144,159

Total = 5,713,120

Total = 896,520

Students (total) by Gender and StatusStudents by Gender and Status

(Total = 9,893)(Total = 4,572)

0 2000 4000 6000 8000 10000 12000

Part-time Full-time

Male

Female Total = 4,438

Total = 10,027

Enrolments vs Students

0 5,000 10,000 15,000 20,000

Students

Enrolments

Part-timeFull-time

Enrolments vs Students

Total = 19,478

Total = 14,465

Enrolments by Gender and StatusEnrolments by Gender and Status

(Total = 14,732)(Total = 4,746)

0 3000 6000 9000 12000 15000

Part-time Full-time

Male

Female Total = 5,984

Total = 13,494

Total SCH delivered = 7,585,142

2014 – 2017 Strategic Plan: Year One

The Plan incorporates the Institute’s vision, mission, values, strategic priorities and objectives, along with specific initiatives for each year. Key performance indicators have also been developed for each of the Plan’s twelve objectives to enable accurate performance measurement. A balanced scorecard approach has been used to ensure the Plan reflects the main aspects of the Institute’s operations.

VisionTo be the first choice in our markets and the leader in our field.

MissionThe Gordon, as a public training provider since 1887 is committed to:

• Providing an enriching student experience that promotes pathways for further study and employment.

• Leading the skilling of industries and communities.

• Ensuring Institute success through sound financial management, strategic partnerships and commercial innovation.

ValuesThe achievement of our vision will be built on the drive, dedication and creativity of our staff. Shared values that provide a structure for how we work together and with stakeholders is critical for implementation of our strategic plan.

Operating as a values-based organisation, we demonstrate our values through our behaviours. The Gordon has identified and adopted a set of Trademark Behaviours that provides a framework for us to model, reward and challenge behaviour in support of our strategic objectives. These behaviours guide everything we do, creating a positive workplace environment where staff and students have the opportunity to reach their potential.

• Step up and take a risk

• Show respect

• Take responsibility

• Always positive

Our Trademark Behaviours are underpinned by the staff Code of Conduct, the Charter of Student Rights and Responsibilities and specific provisions for teachers detailed in the Teachers’ Handbook.

The following is a summary of the Plan’s four strategic priority areas including an overview of major initiatives completed in 2014. An assessment of performance under each priority is also provided using the Key Performance Indicators (KPIs) specified in The Gordon’s 2014 Statement of Corporate Intent. A complete list of KPIs, targets and results is presented on pages FIN 49-50.

The Gordon’s 2014 - 2017 Strategic Plan was officially launched in April 2014. The Plan has been developed within the context of changes to VET policy and broader economic conditions. It provides the strategic framework that guides the important work the Institute does in skilling communities and enhancing the lives of individuals.

15

Objectives

1.1 Build self-sufficiency

1.2 Increase revenue, reduce costs, right-size assets

1.3 Diversify sources of revenue

Major initiatives in 2014

• Development and implementation of strategies for growing market share in priority markets of Geelong and Wyndham.

• Establishment of the Werribee Learning Centre in partnership with Deakin University.

• Preparation for delivery of VETiS programs at the new $9.5 million Wyndham Trade Training Centre.

• Development of a strategic framework for asset maximisation.

• Development and implementation of a strategy to maximise fee-for-service income generation.

• Exploration of opportunities for partnerships and collaborations.

Key Performance Indicator Description2014 Target

2014 Result

Commentary

Operating surplus as a proportion of total income

Net operating surplus (excluding investment income and depreciation) as a percentage of total income

6.6% 2.7%Whilst not achieving our 2014 target, The Gordon is encouraged by the result in what has been a challenging year.

Fee-for-service income as a proportion of total income

Fee-For-Service (all types) income as a proportion of total income

5.7% 6.6%

Our development of a Fee-For-Service Growth Strategy during 2014 positions the Institute well to continue to grow this revenue stream.

Return on investmentNet surplus as a percentage of non-current assets

0.0%* (13.13)%

Despite a negative return for 2014, this is mainly due to the one off impairment of the SMS. Excluding this, the result is (0.3%) which is only a small deviation from the target and the 2013 result. The Gordon believes it is well placed to turn this around in 2015 based on budget projections and KPI performance from Strategic Priorities 2-4 below.

* Target set by Higher Education and Skills Group.

Strategic Priority 1: Maintain Institute SustainabilityAs a leader in education and training, The Gordon is committed to enhancing its financial position in order to reinvest in the communities in which it operates and to fulfill its obligations as a public training provider. The Institute has developed a four-year financial plan and is focused on implementing key initiatives to build a strong and sustainable future, and to achieve specified financial targets.


Objectives

2.1 Maximise The Gordon’s competitive point of difference in the market

2.2 Deliver clear, articulated benefits to students

2.3 Enhance pathway opportunities for students


• Marketing and Communications Strategy reviewed, updated, and implemented.

• Student survey completed, the results of which will inform future marketing and communication initiatives.

• Established measures and targets for enrolment conversion, module load completion, and repeat business.

• Deakin/Gordon Guaranteed Pathways Program launched in partnership with Deakin University.

Strategic Priority 2: The Gordon’s Value PropositionThe Gordon’s Value Proposition aims to build on the Institute’s distinctive point of difference developed over 127 years of service. The Institute is committed to delivering an exceptional student experience centred on inspirational learning and teaching and to growing market share in the increasingly competitive vocational education and training sector.


2014 Result

Commentary

Increase student satisfaction with overall quality of training

Satisfaction with Overall Quality of Training, compared to the sector average

84.6% 91.5%

The Gordon’s value proposition is centred on delivering strong benefits to students and has resulted in a satisfaction rating significantly higher than the sector average.

Further enhance employment outcomes for students

Improved Employment Status After Training, compared to the sector average

57.0% 66.1%

The Gordon is focused on delivering training linked to job outcomes. The result for graduates with an improved employment status is significantly higher than the sector average.

Build Higher Education pathways

Enrolled in Further Study After Training at University, compared to the sector average

9.1% 7.8%*

Whilst there is no statistically significant difference, The Gordon’s result appears lower than the benchmark. Throughout 2014 The Gordon has developed guaranteed pathways to Deakin to further build higher education pathways over the next three years.

Source: The Social Research Centre 2014, Australian vocational education and training statistics: student outcomes: 2014 institute report: The Gordon, NCVER, Adelaide. Sector average relates to ‘All VET providers VIC’.

* Result has a high standard error (above 25%)

17

Objectives

3.1 Review, evaluate and improve current programs

3.2 Identify new programs

3.3 Increase options for flexible delivery


• Completion of annual strategic course review process and implementation of enhancements as appropriate.

• Process implemented for ensuring that new course development priorities reflect industry and community needs and contribute towards Institute financial sustainability.

• Review and implementation of the Institute’s Future Delivery Methodology Strategy.

• Piloting of the BlendED Learning initiative.

• $4.6 million committed by the Victorian Government for implementation of the Blended Learning Delivery project (BlendED).

Strategic Priority 3: Future Delivery MethodologyFuture Delivery Methodology focuses on the provision of a rich and meaningful learning experience for students of all ages and abilities and is central to realising the Institute’s vision. Today’s learners demand training options that offer greater choice as to when and where they learn, that accommodate different learning styles and are highly relevant in terms of vocational outcomes and pathways to further study.


2014 Result

Commentary

Increase the number of students undertaking part of their learning or assessment via Gordon Online

Percentage of students undertaking some part of their learning or assessment via Gordon online

20% 31%

Piloting of the BlendED Learning initiative to increase the flexibility of delivery to students exceeded expectations both in terms of percentage of students and actual student numbers.


Objectives

4.1 Facilitate a high performing workforce and proactively support development needs

4.2 Maintain a values-based Institute where behaviours are both rewarded and addressed

4.3 The Institute is renowned for what it gets done and how


• Enhancement of staff professional development programs.

• 2014 People Matter Survey completed, with a ranking in the top quartile for: ‘Overall job satisfaction’ and ‘Employer of choice’.

• Extension of programs that continue to build on the Institute’s culture and values.

• Key stakeholder survey completed which identified an overall positive opinion of The Gordon by business and community leaders within key markets.

Strategic Priority 4: The Gordon WayThe Gordon commits to be an employer of choice and aspires to be a high performing organisation, underpinned by shared values and agreed behaviours. A positive work environment that is engaging, supportive and aligned with organisational objectives will provide the opportunity for both individuals and the organisation to thrive.


2014 Result

Commentary

Measures of organisational values and wellness

Percentage of staff who view The Gordon as an employer of choice to exceed the comparator group average.

77% 84%

The result for The Gordon places the Institute in the top quartile and 5% above the comparator group average. There was a strong focus on implementing initiatives to enhance organisational wellbeing during 2014.

Source: Victorian Public Sector Commission, People Matter Survey, 2014. Target relates to the ‘Comparator group average’.

19

Student AwardsAustralasian Young Designer Wool AwardsJessie Coote First place - Racewear

Carla Versace Third place - Corporate Wear

Australian Association of Massage Therapists, National Case Study PrizeDerek Burns Winner

Cabinet Makers and Designers Association AwardsAnica Costa Winner - Best Victorian Apprentice

Civil Contractors Federation AwardsBenjamin Noel Joint Winner - Most Outstanding First Year Apprentice in Certificate III Civil Construction

Brent Potter Winner - Most Outstanding Third Year Student in Certificate III Civil Construction

Michael Dunn Winner - Most Outstanding Certificate IV Student in Civil Construction Supervision

Hair and Beauty Industry Association AwardsDebora Ton Winner - Diploma of Specialist Make-up

Jessica Sharp Dual Winner - Certificate III in Hairdressing Apprentice Stage 2

Bonnie Darlow Highly Commended - Certificate III in Hairdressing Apprentice Stage 1

Madison Tolano Highly Commended - Diploma of Beauty Therapy

Master Builders Association of Victoria AwardsGabe McClelland Winner - Regional Apprentice of the Year

Gabe McClelland and Matthew Burrell Joint Winners - Apprentice of the Year, Geelong

Matthew Broad Winner - Chairman’s Award, Geelong

National Wool Museum Scarf FestivalMeagan Turner Runner up - Crochet Category

Nestlé Golden Chef’s Hat, Victorian State FinalsAnthony Wilksch and Corey Chrimes Silver medal

PPG National Colour Matching Competition (Collision Repair)Emily Barry Winner - State and National titles

Victorian Training AwardsCassandra Mackenzie Finalist - Vocational Student of the Year

Bonnie Darlow Finalist - School-based Apprentice of the Year

Teaching awardsAustralian Learning Impact AwardsInteractive Design Program (IDP) – Certificate III in Media People’s Choice Award Winner and First Runner Up

IMS Global Learning Consortium Impact Awards, New OrleansInteractive Design Program (IDP) – Certificate III in Media Silver Award

Victorian Training AwardsInteractive Design Program (IDP) – Certificate III in Media Finalist - Industry Collaboration Category

Melbourne International Flower and Garden ShowFloristry and Visual Merchandising collaboration Bronze medal - Floral Design installation

Organisation Awards Geelong Business Excellence AwardsHealth Promoting Workplace Award Winner

Teaching and Learning Highlights

National WorldSkills CompetitionGordon students were well represented at the 2014 National WorldSkills Competition in Perth, producing the Institute’s best result in almost 30 years. Hairdressing student Hayley Parker was also selected as an Australian representative for the 2015 International WorldSkills Competition in Brazil.

Jake Barton and Luke Diaz Gold medal - Mechatronics

Hayley Parker Silver medal - Hairdressing

Anthony Wilksch Bronze medal - Cookery

Alphonsus Rowe and Mitchell Warren Fourth - Mechanical Engineering

Heath Stevenson and Tyson Carr Finalists - Landscaping


Student satisfaction and employment outcomesThe Gordon is committed to delivering an exceptional student experience centred on inspirational learning and teaching. The 2014 National Centre for Vocational Education and Research’s annual Student Outcomes Survey highlighted high levels of satisfaction and strong employment outcomes for Gordon graduates.

Percentage of graduates who:

• were satisfied with the overall quality of training: 92% compared to a sector average of 85%

• would recommend the training to others: 94% compared to a sector average of 87%

• had an improved employment status after training: 66% compared to a sector average of 57%

• were employed or in further study after training: 93% compared to a sector average of 86%

Source: The Social Research Centre 2014, Australian vocational education and training statistics: student outcomes: 2014 institute report: The Gordon, NCVER, Adelaide. Sector average relates to ‘All VET providers VIC’.

Blended Learning Delivery (BlendED)The Gordon’s Blended Learning Delivery Project (BlendED) combines the best things about face-to-face learning with the power of digital technology and personal devices to create an exciting and flexible learning experience.

In 2014, 15 courses were redeveloped as part of the BlendED program pilot, with 11 ready to commence delivery in 2015. The Victorian Government committed $4.6 million to The Gordon over the next three years to support implementation of the BlendED project. This will accelerate The Gordon’s capacity to deliver digitally enabled programs across the Institute, and contribute to delivering enhanced outcomes to students.

Skills for new and emerging industriesThe Gordon has a key role to play in supporting new industry development initiatives, particularly in communities such as Geelong. During 2014, The Gordon partnered with Carbon Nexus, Deakin University’s carbon fibre research facility. This partnership saw the development of a carbon fibre manufacturing plant operator course to support skills development for this emerging sector. The Gordon is also working with key stakeholders to develop skills for the fast-growing health sector and the growing insurance, injury and disability services industries.

Supporting transitioning workersThroughout 2014, The Gordon worked closely with businesses and employees impacted by company closures, most notably Alcoa Australia and Ford Motor Company. A partnership with Alcoa saw the delivery of a customised worker transition program at its Point Henry operations. One-on-one career advice and follow-up was provided to 284 employees at the Alcoa Smelter and 192 employees at the Alcoa Rolling Mill. This project was funded in part through the Australian Government Department of Employment Flexible Funding Pool, with the support of Enterprise Geelong.

An industry-by-industry audit of current and emerging jobs in the region was conducted, with individual information prepared on possible career options and training. This work also informed the development of programs for the new Skilling the Bay led, Geelong Workforce Development Centre based at The Gordon. More than 400 individuals from Alcoa enrolled to study at The Gordon throughout 2014.

I write with my sincere thanks to The Gordon TAFE team for the outstanding support you have given Alcoa employees at Point Henry.

My team at Point Henry has informed me of your team’s high attention to detail and outstanding follow up in relation to the career assessments and training for our people. The group has been accessible and flexible, and understanding of our needs and circumstances.

I’d like to commend The Gordon TAFE on their services and professionalism.

Mr Alan Cransberg Chairman and Managing Director Alcoa Australia 21

Innovation and Strategy Program The Gordon Innovation and Strategy Program aims to encourage the development of innovative new courses, products and services aligned with the Institute’s strategic priorities. In 2014, the program supported development of the following initiatives:

• A short course to provide entrepreneurial skills and knowledge to support the establishment of small businesses in the ICT sector.

• An online Language, Literacy, and Numeracy unit of competency for teachers.

• Online resources that provide strategies for teachers, to enable a more independent learning experience for students with disabilities.

• Online curriculum to support the use of recycled and reclaimed building materials, to create innovative outdoor furniture as part of The Gordon’s VCAL program.

• A fee-for-service short course in handling refrigerant gases to upskill existing workers in the automotive industry.

• A customised professional development program for employees in the growing children’s services sector.

Teaching ExcellenceA major focus in 2014 was to enhance teacher currency and the application of e-Learning systems and tools to support the implementation of the BlendED project. All ongoing teachers completed an upgrade to the latest Certificate IV in Training and Assessment qualification as a minimum. Professional development was also undertaken on the use of general educational technology tools, student assessment and student management processes, and the implementation of a new centralised student pre-training review process.

Strengthening Education PathwaysThe Gordon offers wide-ranging, flexible and accessible education pathways options. These pathways not only support students to achieve their study and career goals, but also provide a vehicle to help raise educational attainment levels.

In 2014, the Institute introduced guaranteed pathways from 13 VET in Schools programs into higher level courses at The Gordon, providing a seamless transition from secondary school to tertiary study. The Deakin/Gordon Guaranteed Pathways program was also launched in July, providing guaranteed entry pathways from TAFE to university in a range of disciplines.

Kayla Houlihan Diploma of Beauty Therapy, 2014 Recipient of The Gordon Community Spirit Award, 2015

Kayla’s passion for beauty therapy was ignited after spending a year travelling and working as a teacher, and becoming immersed in Bali’s beauty and spa industry. In 2014, she completed her Diploma of Beauty Therapy as well as giving back to the community through events and fundraising, which led her to employment halfway through her course.

She says this allowed her to practice her skills while studying and develop a loyal and satisfied client base. In the future, Kayla plans to open her own business focusing on skin health and boosting women’s self-esteem, as well as raising awareness and funds for CARE Australia.

“The beauty industry is growing and evolving and I am excited by a career that offers lifelong learning. Beauty therapy will lead me on many journeys and career paths and I look forward to discovering what I can achieve.”

In 2014, the Diploma of Beauty Therapy achieved a 100% graduate employment rate.


In 2014, a total of 302 students participated in a VCE or VCAL program through The Gordon. These programs were delivered through two specialised program areas:

VCE and VCAL Outcomes

• The Centre for Language and Further Education delivers VCE (Year 11 and 12) programs for youth (16–19 year olds) seeking to complete their secondary schooling in an alternative education setting, as well as adults wishing to return to study.

• The Geelong Technical Education Centre (GTEC) delivers an integrated three-part program to a youth cohort of 16-19 year olds who have completed Year 10 and wish to undertake VCAL (Year 11 and 12) studies, alongside vocational/trade training in a chosen career field. This program comprises:

» VCAL: Foundation, Intermediate and Senior levels incorporating manufacturing technology/CAD drafting.

» Vocational training: Certificates II and III in traditional building, regulated and mechanical trade areas, animal studies, community services, creative design, hair and beauty, events and hospitality, information technology, and VET in Schools.

» Practical placement: on-the-job work skills training with employers and industry.

Language and Further Education Geelong Technical Education Centre

VCE/VCAL Integrated Year 11

VCE Year 12 VCAL Foundation & Intermediate (Year 11)

VCAL Senior (Year 12)

Achieved year level and further study pathway

28 25 40 12

Achieved year level and employment

4 8 7 2 26 3

Achieved year level (pathway unknown)

Nil Nil 1 3

Further Study (with non-completion)

1 7 22 4

Employment (with non-completion)

Nil 2 11 4 16 5

Withdrawn in 2014 13 14 3 2

Unknown Nil Nil 7 7

Student outcomes

Language and Further Education Program Geelong Technical Education Centre 1

VCE Year 11 VCE Year 12 VCAL Foundation & Intermediate (Year 11)

VCAL Senior (Year 12)

Participation 46 56 91 70

Completion 32 33 48 41

Completion rate % 70% 59% 53% 59%

Participation and

completion

1 GTEC also provides a Headstart program for Year 10 students as a pathway to further study. In 2014, 39 students participated in the Headstart program with 25 continuing to further study at GTEC in 2015.

2 5 of the 7 VCAL Foundation and Intermediate students who achieved year level and employment gained an apprenticeship, which includes further study.

3 23 of 26 VCAL Senior students who achieved year level and employment gained an apprenticeship, which includes further study.

4 2 of the 11 VCAL Foundation and Intermediate students who achieved employment with non-completion gained an apprenticeship, which includes further study.

5 10 of the 16 VCAL Senior students who achieved employment with non-completion gained an apprenticeship, which includes further study.

23

Skilling the Bay

GoalsSkilling the Bay has three key goals with a focus on education and skills so that our local community can secure jobs for the future:

1. Education – raising educational attainment levels

2. Employment – increasing workforce participation through training and re-skilling

3. Skills – growing existing and emerging industries through targeted skills development

$11million to deliver 11 initiatives over 2012-2017

$11m funding has been secured to deliver 11 initiatives that will contribute to the achievement of these three goals. Delivery of the initiatives will enable thousands of people across Greater Geelong to participate in education and training initiatives to gain the skills needed for the jobs of the future.

The Victorian Government established Skilling the Bay in 2011 to address the economic and industry changes impacting the Geelong region. Skilling the Bay is being led by The Gordon and delivered in partnership with Deakin University and the State Government.

Initiatives supporting each goal

During 2014, the Skilling the Bay Advisory Group played an important role in overseeing the continued delivery of the project. Chaired by Professor Jane den Hollander, Vice-Chancellor, Deakin University, the Advisory Group brings together leaders from key sectors of the regional economy, employers, the education and training sector, the community sector, and government to ensure the project is linked to the regional interests of Geelong.

Goal 1. EducationInitiatives:

• Geelong Tertiary Futures Program: Year 9 students from four schools experiencing a range of tertiary preview courses.

• Successful Students – STEM Program: Building teacher capability in science, technology, engineering design and mathematics-related subjects in 8-10 regional schools.

• Applied Design Engineering Program: Immersion program for Year 10 students focusing on design thinking skills for advanced manufacturing utilising state-of-the-art technology.

• Careers in Community Services and Health: Raising young people’s awareness and aspirations for careers in community services and health, through training and structured workplace learning.

Goal 2. EmploymentInitiatives:

• Whittington Works Alliance: Delivering education, training and employment outcomes for residents of the eastern suburbs.

• Northern Futures: Linking training to supported employment outcomes for residents in the northern suburbs.

• Geelong Region Workforce Development Centre: Providing career advice and job search assistance to retrenched workers and local jobseekers.

Goal 3. SkillsInitiatives:

• Skills for Advanced Manufacturing – Composite Materials: Reviewing existing training packages and developing new programs to ensure a supply of skilled workers to this emerging industry.

• Skilling the Health and Community Services Workforce: Development and trial of best-practice pathways for adults, for careers in the expanding Health and Community Services sectors.

• Skilling for Business Success: Building a culture of innovation by inspiring and educating the entrepreneurs of the future.

• Geelong Future Industry Project: Piloting an advanced manufacturing plant for the production of short nanofibers.


2014 Highlights• Launch of the Geelong Region Workforce Development

Centre (WDC) in August 2014. This year alone the WDC has supported more than 180 people to develop their career plans and build their job searching capabilities. The WDC has also provided workshops in job search literacy and established a Jobs Club that provides participants with advice, the opportunity to share experiences and the hosting of guest speakers.

• The development of a world-first pilot manufacturing plant for the production of short nanofibers. Skilling the Bay funded the collaboration between local biotechnology company Cytomatrix, Geelong-based engineering firm Austeng, and Deakin University to build a new and sustainable nanofiber manufacturing capability in Geelong. This project has the potential to develop new manufacturing jobs in the future.

• 120 Newcomb Secondary College Year 9 students completing the Geelong Tertiary Futures Program and gaining valuable insight into a broad range of tertiary pathways.

• 20 students completing work experience with Barwon Health following participation in the Careers in Community Services and Health program.

Plans for 2015The focus of 2015 will be on fully implementing the Skilling the Bay initiatives. Achievement of the three Skilling the Bay goals requires a determined and long-term commitment, as well as continued partnership with the community and key agencies. In 2014, Skilling the Bay laid the foundations to deliver tangible progress towards these goals in 2015 and beyond.

Expected outcomes for the next three years

Goal 1. Education• 1,800 Year 9 students from

four schools undertaking 10 days of preview ‘taster’ courses at The Gordon.

• More than 5,000 Year 7 and 8 students and 40 teachers from 8-10 schools benefiting from enhanced STEM teaching practice.

• More than 600 young people undertaking VET in Schools programs in Community Services and Health pathways.

Goal 2. Employment• More than 450 adults

participating in Education to Employment programs, with more than 200 being supported to potentially transition to employment.

• More than 1,000 retrenched and unemployed jobseekers supported to develop a new career pathway.

Goal 3. Skills• 135 people developing skills

through training initiatives to support the growing Health and Community Services sectors.

• 300 people enhancing their awareness of, and skills for, innovation and entrepreneurialism through forums and events.

• 120 young people inspired to explore a career as an entrepreneur.

• A new nanofiber manufacturing capability developed to generate jobs and new business opportunities.

25

Partnerships

Deakin UniversityIn July, The Gordon reaffirmed its unique relationship with Deakin University by renewing a Memorandum of Understanding. This MOU commits to:

• collaboration and co-operation in areas of mutual benefit;

• leading and supporting the socio-economic development of the Geelong region; and

• strengthening the provision of higher education pathways.

In addition, there were two other notable Deakin/Gordon partnership milestones achieved during the year.

1. Deakin/Gordon Guaranteed Pathways Program

This program was launched mid-year as the first of its kind in Victoria. Under the program, diploma and advanced diploma students, upon graduating from The Gordon and meeting the required entrance requirements, will be offered a seamless transition to nominated Deakin undergraduate degree programs. The program enhances the current Credit for Prior Learning pathways already on offer, and plans are underway to extend guaranteed entry in 2015.

The Guaranteed Pathways Program:

• provides a further point of differentiation for the Institute within the highly competitive VET market;

• improves pathways to higher education for both secondary school leavers and mature learners; and

• supports efforts within the Geelong region to improve education attainment levels.

Establishing new strategic partnerships and strengthening existing relationships is a key aspect of The Gordon’s mission statement. It is fundamental to meeting the Institute’s responsibilities as a long-standing and reputable public training provider.

The Gordon’s ability to meet current and future training needs is linked to the strength of partnerships with schools, community, business and industry. The following is an overview of selected partnership highlights for 2014.

Since we began in 1974 as Australia’s first regionally headquartered university, we have worked closely with The Gordon to widen access to higher education, ensuring students have access to the right pathways for them to develop good careers and make a difference in their own communities. We know people tend to work where they have studied, so it is imperative that we provide good pathways to a career here in the Geelong region. We remain jointly passionate and committed to doing that and with three times as many regional Australians undertaking TAFE programs compared to their metropolitan counterparts, this Pathways Partnership is essential to the region’s future.

Professor Jane den Hollander Deakin University Vice-Chancellor

Jordon Caruana Advanced Diploma of Building Design (Architectural), 2013

“I originally chose to study building design at The Gordon for my love of architecture and the direct link to Deakin if I was to further my studies. The Gordon prepared me with a hands-on base, high level of construction knowledge and in-depth skills to be able to

both design and produce high standard working drawings.

After leaving The Gordon I enrolled into the Bachelor of Construction Management at Deakin, receiving 11 credit points and 18 months off my degree. I am currently working for a residential and commercial building company while I complete uni, and I’ve learnt so much in the field which I am able to apply to my course work. I find working in the industry has given me a real advantage and would highly recommend this to future students.”


2. Werribee Learning Centre

The Werribee Learning Centre was opened in March, located in central Werribee at 9 Bridge Street. The Centre is a unique partnership between The Gordon and Deakin University, and forms the foundation for the Institute’s broader strategy to expand into one of Australia’s largest and fastest growing regions.

The Centre exceeded expectations in its first year and further strengthened the relationship between The Gordon and Deakin University. The Gordon delivered a range of courses focused on meeting specific community and industry training needs including:

• Horticulture

• Information, Digital Media and Technology

• Building and Construction

• Training and Assessment

• Work Health and Safety

• Early Childhood Education.

Secondary Schools In 2014, The Gordon continued to work directly with secondary schools to promote vocational education and training pathways to students. This was primarily achieved through the Institute’s School Liaison and VET in Schools programs.

School Liaison

The School Liaison program provides a direct link to the secondary school community in Geelong and across Victoria. It is central to enhancing The Gordon’s brand awareness and relationships, and increasing enrolments from students completing Year 12 in particular. In 2014, The Gordon brand was publicised to more than 78,000 potential students, including direct engagement with more than 14,300 students. This was achieved through activities such as Tertiary Information Service (TIS) events, career expos, campus tours and presentations, parents’ information evenings, and career advisors’ forums.

VET in Schools (VETiS)

The Gordon has delivered the VETiS program for more than 20 years. The program provides hands-on learning, a nationally recognised qualification, and enhanced job prospects for students when combined with senior secondary schooling. More than 1,000 students took part in the program in 2014, which was conducted in partnership with 34 secondary schools and involved 26 course offerings.

The Wyndham region is forecast to continue to be a major contributor to Victoria’s growth over the next 30 years. We recognise that vocational education and training aligned with community needs is essential to support sustainable growth.

Lisa Line The Gordon CEO

In 2014, there was a 28% increase in Wyndham-based enrolments at The Gordon, surpassing the 25% targeted growth rate.

27

Geelong Industry Trade Training CentreThe Geelong Industry Trade Training Centre is a new $10.5 million training facility located at the Northern Bay Secondary College’s Goldsworthy Road Campus in Corio. It currently provides specialised training facilities for VET in Schools programs including automotive, construction, engineering, hospitality, electrotechnology and hairdressing. In December 2014, a three-year agreement was signed between The Gordon and Northern Bay College which will optimise the potential of this major asset for the northern suburbs community.

Wyndham Trade Training CentreThe Gordon is the appointed training partner for delivery of VET in Schools programs at the $9.5 million Wyndham Trade Training Centre. The Centre is scheduled to become fully operational by the middle of 2015, and will be operated by a cluster of four schools, each with a specialist focus:

• The Grange P12 College — Automotive

• Thomas Carr College — Building

• MacKillop Catholic Regional College — Engineering

• Wyndham Central College — Electrical

Throughout 2014, The Gordon continued to work with these schools on facility design, layout and equipment requirements and is well advanced in preparation for commencement of training. This partnership will further strengthen the Institute’s presence in this important region, and support implementation of The Gordon’s Wyndham Growth Strategy.

Colac-Otway Trade Training CentreThe Colac-Otway Trade Training Centre is operated by a cluster of six schools in the Colac Otway region. The Gordon delivers training out of a new facility located on the grounds of Colac Secondary College, and currently delivers Certificate II and Certificate III programs in Carpentry and Automotive. In 2014, the Institute trialled the use of video conferencing equipment at the Colac Trade Training Centre, with the aim of expanding training options available to the local community.

Key partners The Gordon worked with include:• Alcoa

• Australian Home Care Services

• Barwon Health

• City of Greater Geelong

• Colac Otway Shire

• Corrections Victoria

• Cotton On Group

• Deakin University

• Ford

• Gforce Employment Solutions

• Intheindustry

• Matthews & Associates

• MEGT

• Sarino Russo

• St John of God

• TAC

• Top End Training

• VECCI

• Viva Energy Australia

• Victorian Group Training Company

• Wyndham City Council


Community PartnershipsNorthern Futures

Northern Futures engage long-term unemployed people from the northern suburbs of Geelong, and supports them through tailored training and work experience in areas of identified skills shortages. The program focuses on several areas including transport and logistics, aged care, hospitality, and various traineeships and apprenticeships. Northern Futures has secured commitment and support from a broad range of local Geelong industry partners who employ graduates in long-term roles.

In 2014, 113 people engaged in training facilitated by The Gordon/Northern Futures partnership, with 85 people (75%) going on to further study or employment. This partnership is now approaching its fifth year and has consistently delivered outcomes well above the national standard for comparable programs.

Whittington Works

Whittington Works Alliance is a partnership that brings together residents, businesses, government and local organisations to develop flexible solutions to local education, training and employment issues. The Alliance provides training and support to people living in Whittington and surrounding suburbs through its ‘Education to Employment’ program.

The Gordon has had an established relationship with the Whittington Works Alliance for a number of years. Training is focused on industries with employment opportunities within the Whittington area. In 2014, the Institute delivered Certificate II in Cleaning Operations under the Whittington Works banner. Employment outcomes for participants were positive, with 66 per cent of students finding employment after completing their studies.

Northern Bay Guarantee

The Northern Bay Guarantee is a two-year partnership between Viva Energy, Northern Bay College, Northern Futures, Deakin University, and The Gordon. The program aims to assist up to 26 young, single parents in the northern suburbs of Geelong to secure a job or educational pathway, after completing a nationally accredited training program run by The Gordon.

The project was initiated with seed funding provided by Shell Australia (now operating as Viva Energy at Shell’s former Corio operations). The Gordon, along with the other project partners, has committed resources to support individuals to build brighter futures.

External CommitteesThe Gordon participates in a number of community and industry-based advisory and leadership groups, including:

Australian Apprenticeship and Traineeship Information Service

BioGeelong Network

Central Geelong Action Plan Stakeholder Reference Group

Central Geelong Marketing Committee

Colac Otway Industry Advisory group

Committee for Geelong

Committee for Wyndham

Future Proofing Geelong Advisory Board

G21 and associated Pillar Groups

Geelong Chamber of Commerce

Geelong Manufacturing Council

Geelong Region Innovation and Investment Fund (GRIIF) Consultative Committee

Geelong Region LLEN

ICT Geelong

LeadWest

Northern Futures

Skilling the Bay Advisory Group

Tourism Geelong and the Bellarine

VECCI Geelong Regional Business Council

Victorian TAFE CEO Council

Viva Energy Community Advisory Panel

Whittington Works Executive

WynBay LLEN

Supporting our Community

29

Student and Community SupportIn 2014, Gordon staff participated in numerous fundraising initiatives and events raising more than $13,000 for the community. This included more than $12,000 for Give Where You Live through Workplace Giving, where a number of committed staff provide a proportion of their salary to support the community.

Scholarships and bursaries with a total value of $72,000 were awarded to 36 students in 2014, thanks to the generosity of 11 business and industry benefactors. Geelong businesses and the community have supported The Gordon’s scholarship program since the early 1970s.

The Gordon injected $43,320 into the Geelong and Werribee communities in 2014 via sponsorship of 12 local organisations, sporting clubs, community projects and charity initiatives.

Shaylah Wiseman Certificate III in Commercial Cookery

Shaylah was a recipient of The Rotary Club of Ocean Grove Scholarship in 2014, providing $1,000 towards study-related expenses to continue her Certificate III in Commercial Cookery.

Shaylah overcame great adversity to continue her studies in 2014. In October 2013, she was involved in a motorcycle accident which saw her lose her right leg below the knee. Having been in rehabilitation for months and coming to terms with her prosthetic limb, continuing her apprenticeship was far from her mind. Shaylah’s decision to return to her apprenticeship was made easier with the fantastic support she received from her family, The Gordon and her employer.

‘Returning to The Gordon and applying for the scholarship was an opportunity I took with open arms,’ said Shaylah.

‘Stephen Murphy at The Gordon has been amazing, providing me with one-to-one tutorage to get me up to speed to cover off all the work I missed whilst I was adjusting physically and emotionally to my new leg.’


Key messages2014 began with the Choose your Path tagline carried over from the previous year. A new tagline ‘Real skills. Real experience. Real outcomes’ and subsequent campaign was introduced later in the year. Case studies and statistics were used to substantiate the new tagline, which was implemented to highlight the benefits of completing a TAFE course at The Gordon. The campaign started at the key recruitment period from August utilising press, radio, special placement and digital advertising. This will continue into 2015.

ResearchA number of research initiatives were undertaken in late 2014. These are completed annually to help guide marketing decisions and to provide insight into perception and awareness of The Gordon.

• Market Research Student Survey. Completed in September, this identifies which marketing mediums are reaching the student cohort and guides future promotional activities.

• Employer Survey. Completed in October, the feedback obtained from our apprentice employers highlights training quality, and allows the Institute to monitor their perception of The Gordon.

• Graduate Survey. Completed in December, this provides insights into what Gordon graduates are doing post-study including current employment and study status.

New developmentsLate in 2014, three key marketing projects for the year were realised: a new ‘fresh’ design look, a brand new website, and the implementation of a tracking system for all marketing.

New design look

While The Gordon has updated its design look slightly each year, it was decided a more substantial change was required to modernise the design elements being used. Two new designs along with the existing design were tested on more than 1,000 past and present students. The new look was launched in December and will continue to be implemented during 2015.

New website

The need for a more user-friendly website prompted the decision to change web platforms in 2014. After extensive research, the Kentico EMS platform was chosen due to its ease of use and advanced marketing solutions. The content migration commenced in November and was completed in December. The project was implemented by the Marketing and Information Systems departments, and the new site went live on 10 December.

Tracking of marketing

A number of new processes and measurements were introduced in 2014 based on the need to measure marketing return on investment and importantly, to ensure best practice.

Marketing and Promotion2014 was a year of research and refinement of the Institute’s marketing and promotional activities.

31

International Highlights in 2014 included:

• Delivery of the Diploma of International Business and the Advanced Diploma of Accounting at the Jiangsu Institute of Commerce in China. This successful offshore relationship provides quality trans-national education, which has been delivered since 2006.

• A two-week scholarship program for 12 students and a teacher from Jiangsu Institute of Commerce was hosted in April/May 2014. The program included English training, accounting class observation, and cultural excursions.

• In November 2014, The Gordon hosted the Denso Technical Skills Academy Cultural Study Tour for the sixth year. The study tour consisted of 122 students and six senior personnel from Denso College for one week. The program included cultural tours, tasters of hands-on vocational activities in Floristry, Specialist Makeup and Outdoor Recreation, visits to the Geelong City and East Geelong Campuses and exchange activities with Gordon students and staff. The program was very successful with discussions for 2015 now taking place.

• Funding was successfully received from the Australian Government Department of Education and Training to launch overseas Outbound Mobility study tours in 2014, with a further nine to be conducted in 2015. More than 70 local students will gain extensive overseas experience which will benefit their future study and careers.

• The launch of the Deakin/Gordon Guaranteed Pathways Program further enhanced the Institute’s offering to international students.

• In 2014, The Gordon completed the CRICOS re-registration process. The successful registration will see the Institute deliver programs to International students until at least 2019. In 2015, The Gordon will offer 25 courses to International students.

International Risk ManagementNature of strategic and operational risk

1 Changes to legislation and procedures relating to International student enrolments.

2 Increased competition for inbound students, including promotion of university pathways.

3 Competitiveness for offshore partnership delivery.

Risk mitigation strategies

• Ensuring compliance with the Education Services for Overseas Students Act and National Code of Practice. In 2014, this included a review of standards, a focus on training, continuous improvement to course registrations and internal processes, including teacher training and enhancement of industry currency.

• The development of in-demand pathways for inbound recruitment, with partners such as Deakin University.

• Relationships with key partners for inbound recruitment and offshore delivery continued to be enhanced. The assessment of overseas partnerships continued, with a focus on options that have a strong strategic alignment.

• The Gordon’s marketing strategy in 2014 included a combination of online and direct promotion in India, China, Indonesia, and Latin America, as well as a range of countries in South and South East Asia. The Gordon website has been well utilised to promote the Institute and its courses. Content is currently available in a range of mediums including online copy, brochures, and video testimonials.

Performance Measures and targets formulated for offshore operations

• Maintain and strengthen the existing offshore programs in China.

• Access government-funded outbound mobility opportunities for local students.

Extent to which expected outcomes have been achieved

• Successful program delivery to 160 students at the Jiangsu Institute of Commerce in China.

• Nine Outbound Mobility Projects, funded by the Australian Government Department of Education and Training, were conducted in 2014. A further nine projects to be conducted in 2015 after successfully receiving funding in 2014.

In 2014, The Gordon had more than 100 international students from 15 countries enrolled onshore in both English Language Intensive Courses for Overseas Students (ELICOS) and mainstream courses. Offshore, The Gordon had 160 students enrolled in the Advanced Diploma of Accounting and the Diploma of International Business at Jiangsu Institute of Commerce in Nanjing, China.

International Operations


The Formalities

Risk Management Attestation Statement The Gordon has risk management processes in place consistent with Risk Management Standard AS/NZS ISO 31000:2009 and an established internal compliance and control system that is operating efficiently and effectively. This system enables the executive to understand, manage and satisfactorily control risk exposures.

The following points in summary form represent a basis for this attestation:

• A risk management framework for the Institute is in place and is being implemented in practice through the activities of the Board’s Audit and Risk Management Committee and the Risk Management Executive.

• A Site Inspection Survey was conducted in 2014 by the Victorian Managed Insurance Authority (VMIA) which showed The Gordon has effective risk management with risks appropriately controlled.

• Risk Management Plan items are linked to the Institute’s Strategic Plan.

The Board verifies the assurance and that the critical risks and overall risk profile of The Gordon has been reviewed over the last 12 months.

Overall I am confident that the Institute has effective systems in place which I am assured are working efficiently with respect to risk management and that these systems are under regular review to ensure that activities reflect current commercial and industry standards.

Brian WilliamsonBoard Chair

33

The Gordon demonstrates this commitment through a wide variety of initiatives and programs that help to foster a high performing culture that is uniquely identified as ‘The Gordon Way’.

Health and Wellbeing In July 2014, The Gordon won the Geelong Business Excellence Award for a Health Promoting Workplace. This was local recognition of the commitment the Institute has to promoting positive health and wellbeing within the workplace and ensuring staff have a healthy and balanced life.

Activities and Initiatives

• An active, subsidised gym at the East Geelong Campus is open twice a week for staff, along with Pilates programs offered at both campuses.

• A $300 grant from Barwon Health towards activities in support of Mental Health Week in October enabled the Institute to invite a local naturopath to speak on the topic of ‘positive wellbeing’.

• The Gordon Running group was created in 2014, with members participating in the Great Ocean Road Marathon, Melbourne Marathon and Run Geelong.

• Joel Selwood, Captain of the Geelong Football Club, visited the East Geelong campus in August. During his visit Joel held a handball competition and participated in a question and answer session on healthy living and AFL football.

• For the second year a group of committed staff participated in the Ardoch Literacy Program with Northern Bay College that brings Big Buddies and Little Buddies together to promote and enhance literacy skills. Letters were exchanged and this year, staff were able to visit the Little Buddies at their school and they in return visited the East Geelong Campus in December.

Workforce and EmploymentThe Gordon’s Strategic Plan 2014 - 2017 recognises the important role that Institute staff play in the organisation’s success. Strategic Priority 4 – The Gordon Way underpins the aspiration to be recognised as a values-based employer of choice, where staff have the opportunity to work in a safe, positive and supportive environment.

84% of our staff see The Gordon as an employer of choice and among the top for:

• Work life balance

• Overall job satisfactionPeople Matter Survey 2014


35

Workforce DataThe Gordon actively promotes its values-based culture. These values guide everything we do and are underpinned by The Gordon Code of Conduct and Code of Conduct for Victorian Public Sector Employees.

The Institute’s commitment to diversity and equal opportunity in the workplace are key components that support its aspiration to be widely recognised as an employer of choice.

Protected Disclosure Act 2012The Protected Disclosure Policy was reissued on 24 April 2014 in accordance with The Protected Disclosure Act 2012. The Protected Disclosure Policy is available on the intranet for all staff. There have been no disclosures to date.

Carers Recognition Act 2012In compliance with the Carers Recognition Act 2012 the Flexible Work Arrangements Policy was revised and reissued in August 2014 and is available on the intranet for all staff.

Victorian Public Sector Travel PrinciplesThe Travel Policy has been reviewed to ensure compliance with the Victorian Public Sector Travel Principles and is available on the intranet for all staff.

Ongoing EmployeesFixed term & Casual Employees

Employees (Headcount)

Full time (Headcount)

Part time (Headcount) FTE FTE

June 2014 388 262 126 336 199

June 2013 373 259 114 326 187

Workforce Data Disclosures – Public Service Employees

June 2014 June 2013



Employees (Headcount) FTE FTE Employees

(Headcount) FTE FTE

GenderMale 187 173 79 178 169 80

Female 201 163 120 195 157 107

AgeUnder 25 3 3 7 2 2 3

25-34 25 21 23 21 17 12

35-44 94 79 47 91 76 40

45-54 151 134 65 144 129 57

55-64 106 92 46 106 94 56

Over 64 9 7 11 9 8 19

ClassificationT2.1 0 0 0 0 0 1

T2.2 0 0 14 0 0 15

T3.1 5 5 2 11 10 4

T3.2 11 10 1 14 12 0

T4.1 11 9 1 14 12 0

T4.2 14 12 1 14 11 3

T5 147 125 12 139 122 11

SE1 4 3 1 2 2 0

SE2 18 18 0 18 18 0

SE3 1 1 0 1 1 0

CAS TCH 0 0 102 0 0 98

PACCT 1 0 0 1 1 1 2

PACCT 2 7 6 1 13 11 1

PACCT 3 69 55 15 58 45 12

PACCT 4 31 27 3 29 26 4

PACCT 5 26 23 6 22 19 4

PACCT 6 11 10 2 6 6 2

PACCT 7 12 11 3 12 11 0

PACCT 8 13 13 1 10 10 0

EXECUTIVE 0 0 2 0 0 2

OTHER* 8 8 31 9 9 28

* Includes Managers, Food & Beverage Workers, Gym Instructors and Crane Operators

Indicator 2014City — Useable Floor Area (UFA)

East — Useable Floor Area (UFA)

22,804.00

26,423.00

Total UFA 49,227.00

Total FTE 490

Gas and ElectricityE1 Total Energy Usage segmented by primary source

(including GreenPower)21,999,130 Megajoules

E2 Greenhouse Gas Emissions associated with energy use, segmented by primary source and offsets

4,918 Tonnes CO2-e

E3 Percentage of electricity purchased as Green Power 25%

E4 Units of Energy Used per FTE 44,929 Megajoules/FTE

E5 Units of Energy per Unit office Space 447 Megajoules/m2

WasteWs1 Total units of waste disposed of by destination 461, 714 Kilograms

Ws2 Units of office waste disposed of per FTE by destination

943 Kilograms/FTE

Ws3 Recycling rate 26.18%

Ws4 Greenhouse Gas Emissions associated with waste disposal

554 Tonnes CO2-e

PaperP1 Total units of A4 equivalent copy paper used 5,920 Reams

P2 Units of A4 equivalent copy paper used per FTE 12.08 Reams/FTE

P3 Percentage of recycled content of copy paper purchased

50%

WaterW1 Total units of metered water consumption by water

source12,344 Kilolitres

W2 Units of metered water consumed in offices per FTE 25 Litres/FTE

TransportationT1 Total energy consumption by operational vehicles

segmented by vehicle typeULP = 2095 Gigajoules

LPG = 296 Gigajoules

Diesel = 39 Gigajoules

T2 Total vehicle travel associated with entity operations segmented by vehicle type

964,436 Kilometres

T3 Greenhouse Gas Emissions associated with operational vehicle fleet by vehicle type – Total and per 1,000 km

0.2 Tonnes CO2-e

T4 Total distance travelled by aeroplane 107,500 km

T5 Percentage of employees regularly (>75% of work attendance days) using public transport, cycling, walking, or car-pooling to and from work or working from home by locality type.

10% of total employees

Greenhouse Gas EmissionsG1 Total Greenhouse Gas emissions associated with

energy use 4,918 Tonnes CO2-e

G2 Total Greenhouse Gas emissions associated with vehicle fleet

160 Tonnes CO2-e

G3 Total Greenhouse Gas emissions associated with air travel

0.1 Tonnes CO2-e

G4 Total Greenhouse Gas emissions associated with waste disposal

554 Tonnes CO2-e

G5 Greenhouse Gas emissions offsets purchased 0 Tonnes CO2-e

As a leading provider of sustainability programs it is only natural that The Gordon has an advanced environmental sustainability policy; and in 2014 continued its commitment to continually improving environmental performance.

Highlights: • The inclusion of eight new Hybrid vehicles

into the fleet, further reducing The Gordon’s fuel consumption.

• Memberships with Industry bodies such as the Tertiary Education Facilities Management Association and Australasian Campuses Towards Sustainability supported benchmarking against identified peers and best practice.

• Increased use of harvested water throughout gardening and cleaning programs, continuing to lower annual water consumption.

• Inline metering of all storage tanks ensuring more accurate evaluation and reporting.

• Ongoing replacement of obsolete light fittings in key areas with more effective and efficient lighting options.

• Installation of over 30 hand dryers in bathrooms across main campuses; decreasing consumption of paper products and further reducing total waste to landfill.

• The Gordon continues working towards the long-term Server Virtualisation strategy to have 80% of servers hosted within our Virtual Server Farm. The Institute has made solid progress and now has 75% of servers hosted virtually. Moving forward, this strategy helps control data centre requirements from both a physical space and energy consumption standpoint. The Virtual Server capability will also considerably reduce capital expenditure for new hardware infrastructure while still meeting customer demands for extra system capability.

Environmental Performance


Safety Culture and LeadershipThe Gordon has established 16 designated work groups, each represented by a Health and Safety Representative who is elected for a three-year term. An interim election had been held in 2013 for one position, and in July 2014 elections were held for the 15 remaining positions whose term expired. The Health and Safety Representatives provide OHS guidance to the members of their designated work groups, address safety issues and assist with the investigation of reported workplace injuries and illnesses.

The Gordon’s Occupational Health and Safety Committee met on a bi-monthly basis and consists of the Health and Safety Representatives and three key management representatives. The committee reviews injury statistics and OHS documents, plus provides guidance on safety issues.

Two sessions on Bullying Awareness Training were held in 2014, as part of the induction for all new staff.

Key Performance Indicators Target Outcome

Number of OHS Committee Meetings held in 2014

6 6

Attendance of Committee members at the OHS Committee Meetings

95% 80%

Risk ManagementHazard identification was carried out through implementation of workplace assessments and incident investigation. Actions were planned and implemented to address high risk hazards.

The Safety Management System at The Gordon includes policy, procedures and associated documents. The Gordon’s OHS documents include the requirements of the Victorian OHS Act and associated regulations and guidance notes.

The Gordon recognises that other Australian States and Territories in which Gordon courses are delivered are not under this jurisdiction, and has ensured its safety management system meets the additional requirements of the National Work Health and Safety (WHS) model legislation.

Key Performance Indicator Target Outcome

Percentage of actions resolved that were raised as a result of an inspection

100% 100%

OHS Incident ManagementInjury and near-miss reporting was actively promoted using emails, posters and discussions between the OHS Manager and staff members. Staff and students are strongly encouraged to report all injuries and near-misses including minor injuries not requiring medical attention. Injuries are investigated, and where reasonably practicable, actions are put in place to reduce the likelihood of an injury reoccurrence.

Staff and student injuries are reported monthly to the Board. The Gordon is focused on reducing and minimising the number of staff and student injuries.

Key Performance Indicators Target Outcome

Decline in injuries to students compared to previous year

5% decline 9% decline

Decline in injuries to staff compared to previous year

5% decline 39% decline

Continuous ImprovementKey safety projects carried out in 2014 included:

• Installation of new HAZCHEM signage at Geelong City and East Geelong campuses to comply with current legislation.

• A review of all pedestrian and traffic interaction at the East Geelong Campus.

• The revision of the Gordon’s ‘Non Smoking Policy’ and commitment to becoming a complete smoking and tobacco free environment from 1 January 2015.

Occupational Health and SafetyThe Gordon is committed to providing a safe and healthy environment for staff, students, contractors, and visitors.

Under State and Commonwealth legislation, responsibility for occupational health and safety (OHS) lies with The Gordon’s Board, CEO and executive management. In addition to this, all employees, students, contractors and visitors have a responsibility, as far as reasonably practicable, to ensure that they do not put anyone at risk by act or omission.

The Gordon’s OHS Strategy identifies four key areas: Safety Culture and Leadership, Risk Management, Incident Management, and Continuous Improvement.

37

1. Tuition contributions

Charged as an hourly rate that varied from course to course. A large portion of the tuition was subsidised by the Victorian Government as part of the Victorian Training Guarantee (VTG).

» The fees were calculated based on the number of hours of enrolment, at a rate that varied depending on the course.

» All hourly rates were set by The Gordon as part of the budget process. Those students eligible for concession fees paid 20 per cent of the published standard hourly rate. Those students who did not meet the eligibility criteria for the VTG were charged a fee-for-service rate. The fees were calculated based on the number of hours of enrolment, at a rate that varied depending on the course.

2. Student amenities fee set by The Gordon Board

Applicable to all students attending on-campus. Those students who met the eligibility criteria for the VTG were charged amenities fees at $32, plus 21 cents (10 cents for concession card holders) per nominal hour up to a maximum of $125 per year. For those students who did not meet the eligibility criteria, the amenities fee was built into the course tuition fee.

» All Distant Education students paid a flat fee of $32.

» Students, including trainees, who did not attend classes on-campus could elect to pay a flat fee of $32 per calendar year, which entitled them to obtain a student ID card and access to our student services.

» Student amenities fees contribute to the provision of the following student services: counselling, careers resources, library, student residence, management of the Student Support Fund, student user account, wireless internet, and a wide range of student facilities, including the student diary app and student portal. The minimum and maximum student amenities fees are $32 and $125.

3. Resource or Materials Fees

Charged to cover the costs of materials and other incidentals. This fee varied according to the course being undertaken.

In addition to the general fees and student services fees, The Gordon made the following charges to students for services provided at times other than the completion of the academic year, or completion of a student’s course:

Student ID card replacement. ........................................$10

Statement of course completion ..................................Free

Fee receipt replacement ..................................................Free

Formal academic statement ..........................................$15

Archive result search .........................................................$25

Replacement certificate ...................................................$25

Request for early certificate ...........................................Free

Archive result search and replacement certificate $50

Official statement of results ............................................Free

Fees and ChargesIn 2014, fees payable by students enrolling were made up of three components:


Relevant LegislationThe Gordon complies with all relevant legislation and subordinate instruments including, but not limited to, the following:

• Education and Training Reform Act 2006 (ETRA)

• TAFE institute constitution

• Directions of the Minister for Training and Skills (or predecessors)

• TAFE institute Commercial Guidelines

• TAFE institute Strategic Planning Guidelines

• Public Administration Act 2004

• Freedom of Information Act 1982

• Building Act 1993

• Protected Disclosure Act 2012

• Victorian Industry Participation Policy Act 2003

External ReviewsThe following external reviews/audits were completed of The Gordon in 2014:

• ASQA CRICOS Change of Scope Registration (July 2014)

• Victorian Training Guarantee Contract Compliance Audits (March 2014 and October 2014)

• VMIA Site Risk Survey (November 2014)

• Auditor General audit of financial statements (December 2014)

• Continuous audit program by Crowe Horwath (throughout 2014)

• Foundation Skills Approved Provider audit (January 2014)

• High Risk Work Licences Training and Assessment by Worksafe (April 2014)

• Subcontracted Delivery review by HESG (May 2014)

Freedom of InformationThe Gordon adheres to the Freedom of Information (FOI) Act 1982 and as such processes FOI requests in accordance with the Act. In 2014, The Gordon received no applications for the supply of information under FOI. The Gordon’s 2013/2014 FOI Annual report was completed on 1 July 2014.

National Competition PolicyThe Gordon has implemented a strategy ensuring each appropriate segment of operations that is not recurrently funded is required to recover full overheads, including an allowance for net competitive advantages where they exist. Internal support services of a non-administrative nature, that could potentially be outsourced, are also subject to recouping overheads consistent with the competition guidelines. Competitive tendering policy forms part of the overall purchasing policy, following the Competitive Neutrality Pricing Principles.

Compliance with the Building Act 1993The Gordon considers that new buildings constructed after the effective date of the Building Act 1993, conform to the relevant requirements of the act. Buildings in existence prior to the Building Act 1993 comply with the relevant building regulations existent at that time. The Institute’s ongoing maintenance programs and any improvements or alterations to buildings are completed in a manner compliant to the relevant requirements of the Building Act 1993.

Register of Major Commercial ActivitiesThe register is required to comply with Commercial Guideline 10. The Chief Finance Officer is responsible for the maintenance of the register. Institute policy mandates compulsory reporting of activities that are in excess of 5% of total Institute revenue. Policy also mandates compulsory reporting of any activity that exposes the Institute to significant risk. In 2014, no activity has been reported.

Insurance AttestationI, Lisa Line, certify that The Gordon has complied with Ministerial Direction 4.5.5.1 – Insurance.

Lisa Line CEO

Further Compliance Information

39

Information Available on RequestThe Gordon has prepared material on the following items, further details of which are available on request from the Accountable Officer. This is consistent with the requirements of the Financial Management Act 1994 and subject to provision of the Freedom of Information Act 1982.

a. a statement that declarations of pecuniary interests have been duly completed by all relevant officers;

b. details of shares held by a senior officer as nominee or held beneficially in a statutory authority or subsidiary;

c. details of publications produced by the Institute about itself, and how these can be obtained;

d. details of changes in prices, fees, charges, rates and levies charged by the Institute;

e. details of major external reviews carried out on the Institute;

f. details of major research and development activities undertaken by the Institute;

g. details of overseas visits undertaken including a summary of the objectives and outcomes of each visit;

h. details of major promotional, public relations and marketing activities undertaken by The Gordon to develop community awareness of the Institute and its services;

i. details of assessments and measures undertaken to improve the occupational health and safety of employees;

j. a general statement on industrial relations within the Institute and details of time lost through industrial accidents and disputes;

k. a list of major committees sponsored by the Institute, the purposes of each committee and the extent to which the purposes have been achieved;

l. details of all consultancies and contractors including:

i. consultants/contractors engaged;

ii. services provided; and

iii. expenditure committed to for each engagement.


The Gordon’s Annual Report is prepared in accordance with the Financial Management Act 1994 and the Directions of the Minister for Finance. This index has been prepared to facilitate identification of compliance with statutory disclosure requirements.

Disclosure Index

Item No Source reference SUMMARY OF REPORTING REQUIREMENT Page

REPORT OF OPERATIONSCHARTER AND PURPOSE1 FRD 22E Manner of establishment and the relevant Minister 32 FRD 22E Objectives, functions, powers and duties 33 FRD 22E Nature and range of services provided including communities served 3, 21 - 32

MANAGEMENT AND STRUCTURE4 FRD 22E Organisational structure and chart, including accountabilities 4 - 115 FRD 22E Names of Board members 4, 9

FINANCIAL AND OTHER INFORMATION6 FRD 03A Accounting for Dividends NA7 FRD 07A Early adoption of authoritative accounting pronouncements FIN 16 - 178 FRD 10 Disclosure Index 41 - 429 FRD 17B Long Service leave wage inflation and discount rates FIN 1510 FRD 19 Private provision of public infrastructure NA11 FRD 20A Accounting for State motor vehicle lease arrangements prior to 1 Feb 2004 NA12 FRD 22E Operational and budgetary objectives, performance against objectives and achievements 13 - 1913 FRD 22E Occupational health and safety statement including performance indicators,

performance against those indicators and how they affected outputs 37

14 FRD 22E Workforce data for current and previous reporting period including a statement on employment and conduct principles 3515 FRD 22E Summary of the financial results for the year including previous 4 year comparisons 1316 FRD 22E Significant changes in financial position during the year 1317 FRD 22E Major changes or factors affecting performance 13, 1618 FRD 22E Post-balance sheet date events likely to significantly affect subsequent reporting periods 1319 FRD 22E Summary of application and operation of the Freedom of Information Act 1982 3920 FRD 22E Statement of compliance with building and maintenance provisions of the Building Act 1993 3921 FRD 22E Statement on National Competition Policy 3922 FRD 22E Summary of application and operation of the Protected Disclosure Act 2012 3523 FRD 22E Summary of Environmental Performance 3624 FRD 22E Consultants:

Report of Operations must include a statement disclosing each of the following

1. Total number of consultancies over $10,000

2. Location (eg website) of where details of these consultancies over $10,000 have been made publicly available

3. Total number of consultancies individually valued at less than $10,000 and the total expenditure for the reporting period

AND publication on TAFE institute website required, for each consultancy more than $10,000, of a schedule listing:

• Consultant engaged

• Brief summary of project

• Total project fees approved

• Expenditure for reporting period

• Any future expenditure committed to the consultant for the project

13

25 FRD 22E Statement, to the extent applicable, on the application and operation of the Carers Recognition Act 2012 (Carers Act), and the actions that were taken during the year to comply with the Carers Act

35

26 FRD 22E List of other information available on request from the Accountable Officer, and which must be retained by the Accountable Officer (refer to list at (a) – (l) in the FRD)

40

27 FRD 24C Reporting of office based environmental impacts 3628 FRD 25B Victorian Industry Participation Policy Disclosures NA29 FRD 26A Accounting for VicFleet motor vehicle lease arrangements on or after 1 February 2004 NA30 FRD 29 Workforce Data Disclosures on the public service employee workforce 3531 SD 4.5.5 Provide an attestation that risk identification and management is consistent with AS/NZS ISO31000:2009 or equivalent 3332 SD 4.2 (g) Qualitative and Quantitative information to be included in Report of Operations, and provide general

information about the entity and its activities, togther with highlights and future initiatives 12 - 32

33 SD 4.2 (h) The Report must be prepared in accordance with requirements of the relevant Financial Reporting Directions FIN 434 SD 4.2 (j) The Report of Operations must be signed and dated by a member of the Responsible Body 235 CG 10 (clause 27) Major Commercial Activities 3936 CG 12 (clause 33) Controlled Entities FIN 10

41

FINANCIAL REPORTFINANCIAL STATEMENTS REQUIRED UNDER PART 7 OF THE FINANCIAL MANAGEMENT ACT 198437 SD 4.2 (a) The financial statements must be prepared in accordance with:

• Australian accounting standards (AAS and AASB standards) and other mandatory professional reporting requirements (including urgent issues group consensus views);

• Financial Reporting Directions; and

• business rules.

FIN 4

FIN 4FIN 4

38 SD 4.2 (b) The financial statements are to comprise the following:

• income statement;

• balance sheet;

• statement of recognised income and expense;

• cash flows statement; and

• notes to the financial statements.

FIN 5FIN 6FIN 5FIN 8FIN 10 - 48

OTHER REQUIREMENTS UNDER STANDING DIRECTION 4.239 SD 4.2 (c) The financial statements must where applicable be signed and dated by the Accountable Officer,

CFAO and a member of the Responsible Body, stating whether, in their opinion:

• the financial statements present fairly the financial transactions during the reporting period and the financial position at the end of the period;

• the financial statements are prepared in accordance with this direction and applicable Financial Reporting Directions; and

• the financial statements comply with applicable Australian accounting standards (AAS and AASB standards) and other mandatory professional reporting requirements (including urgent issues group consensus views).

FIN 4

FIN 4FIN 4

40 SD 4.2(d) Rounding of amounts FIN 1641 SD 4.2(e) Review and recommendation by Audit Committee or responsible body FIN 4

OTHER REQUIREMENTS AS PER FINANCIAL REPORTING DIRECTIONS IN NOTES TO THE FINANCIAL STATEMENTS42 FRD 11A Disclosure of ex-gratia payments 1343 FRD 21B Disclosures of Responsible Persons, Executive Officer and Other Personnel (Contractors

with significant management responsibilities) in the Financial ReportFIN 42 - 43

44 FRD 101 First time adoption FIN 1645 FRD 102 Inventories FIN 23, FIN 1446 FRD 103E Non-current physical assets FIN 2447 FRD 104 Foreign currency FIN 1648 FRD 105A Borrowing costs FIN 29, FIN 6649 FRD 106 Impairment of assets FIN 13 - 14,

FIN 2550 FRD 109 Intangible assets FIN 25, FIN 1551 FRD 107A Investment properties NA52 FRD 110 Cash flow statements FIN 853 FRD 112D Defined benefit superannuation obligations FIN 3554 FRD 113 Investment in subsidiaries, jointly controlled entities and associates FIN 10, FIN 2255 FRD 114A Financial instruments – general government entities and public non-financial corporations FIN 36 - 4156 FRD 119A Transfers through contributed capital FIN 1657 FRD 120H Accounting and reporting pronouncements applicable to the reporting period FIN 16 - 17

PART 7 OF THE FINANCIAL MANAGEMENT ACT 1994 (FMA)58 FMA s49(a) Must contain such information as required by the Minister FIN 2 - 459 FMA s49(b) Must be prepared in a manner and form approved by the Minister FIN 2 - 460 FMA s49(c) Must present fairly the financial transactions of an institute during the financial year to which they relate FIN 2 - 461 FMAs 49 (d) Must present fairly the financial position of an institute as at the end of the year FIN 2 - 462 FMAs 49 (e) Must be certified by the Accountable Officer for an institute in the manner approved by the Minister FIN 4

COMPLIANCE WITH OTHER LEGISLATION AND SUBORDINATE INSTRUMENTS

63 Legislation The TAFE institute Annual Report must contain a statement that it complies with all relevant legislation and subordinate instruments, including, but not limited to, the following:

39, FIN 4

• Education and Training Reform Act 2006 (ETRA)

• TAFE institute constitution

• Directions of the Minister for Higher Education and Skills (or predecessors)

• TAFE institute Commercial Guidelines

• TAFE institute Strategic Planning Guidelines

• Public Administration Act 2004

• Financial Management Act 1994

• Freedom of Information Act 1982

• Building Act 1983

• Protected Disclosure Act 2012

• Victorian Industry Participation Policy Act 2003

64 ETRA s3.2.8 Statement about compulsory non-academic fees, subscriptions and charges payable in 2014. 3865 Policy Statement that the TAFE institute complies with the Victorian Public Sector Travel Principles 35

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

66 FRD 27B Reporting and performance should be presented using KPIs as set out in the Statement of Corporate Intent agreed with the Minister, comparing 2014 actual performance against the 2014 target and 2013 actual performance, and providing an explanation of any variance between the 2014 actual performance and 2014 target for each KPI. The KPIs must also include the Return on Investment.

FIN 49 - 50

OVERSEAS OPERATIONS OF VICTORIAN TAFE INSTITUTES67 PAEC and VAGO

(June 2003 Special Review item 3.110)

Financial and other information on initiatives taken or strategies relating to the institute’s overseas operations

• Nature of strategic and operational risks for overseas operations

• Strategies established to manage such risks of overseas operations

• Performance measures and targets formulated for overseas operations

• The extent to which expected outcomes for overseas operations have been achieved.

32


The Financial Report

FIN 2 The Gordon Annual Report 2014

Gordon Institute of TAFEFor the year ended 31 December 2014

FIN 5

Gordon Institute of TAFE

Comprehensive Operating Statementfor the year ended 31 December 2014

2014 2013Note $'000 $'000

Continuing operationsIncome from transactionsGovernment contributions - operating 2(a)(i) 63,826 59,085 Government contributions - capital 2(a)(ii) - 1,024 Sale of goods and services 2(b) 13,041 12,180 Interest 2(c) 1,292 1,457 Other income 2(d) 1,154 810 Total income from transactions 79,313 74,556

Expenses from transactionsEmployee expenses 3(a) 41,089 41,400 Depreciation and amortisation 3(b) 3,866 3,968 Grants and other transfers 3(c) 11 118 Supplies and services 3(d) 30,022 23,887 Other operating expenses 3(e) 4,619 4,828 Total expenses from transactions 79,607 74,201 Net result from transactions (net operating balance) (294) 355

Other economic flows included in net resultNet gain/(loss) on non-financial assets 4(a) (14,177) 134 Other gains/(losses) from other economic flows 4(b) (179) 100 Total other economic flows included in net result (14,356) 234 Net result from continuing operations (14,650) 589

Net result (14,650) 589

Other economic flows - other comprehensive incomeItems that will not be reclassified to net resultChanges in physical asset revaluation surplus 14(a) (408) - Total other economic flows – Other comprehensive income (408) - Comprehensive result (15,058) 589

The comprehensive operating statement should be read in conjunction with the notes to the financial statements.

Institute



Balance Sheetas at 31 December 2014

2014 2013Note $'000 $'000

AssetsFinancial assets

Cash and deposits 15(a) 50,085 52,863 Receivables 5 14,327 10,952 Total financial assets 64,412 63,815

Non-financial assetsInventories 7 270 289 Property, plant and equipment 8 107,305 109,807 Intangible assets 9 3,861 18,730 Other non-financial assets 10 717 886 Total non-financial assets 112,153 129,712

Total assets 176,565 193,527

LiabilitiesPayables 11 6,121 7,883 Provisions 12 7,376 7,511 Borrowings 13 105 128 Total liabilities 13,602 15,522

Net assets 162,962 178,005

EquityAccumulated surplus/(deficit) 65,168 81,115 Reserves 14 70,065 69,161 Contributed capital 27,729 27,729 Net worth 162,962 178,005

Commitments for expenditure 16 231 - Contingent assets and contingent liabilities 17 - - The balance sheet should be read in conjunction with the notes to the financial statements.

Institute

FIN 7


Statement of Changes in Equityfor the year ended 31 December 2014

Physical asset revaluation

surplus

Other - Special and General Purpose

Reserves

Accumulated surplus

Contributed Capital

Total

Note $'000 $'000 $'000 $'000 $'000At 1 January 2013 69,161 1,291 79,229 10,305 159,986

Net result for the year - - 595 - 595 Transfers to accumulated surplus - 6 (6) - - Contributions to capital - - - 17,424 17,424

Year ended 31 December 2013 69,161 1,297 79,818 27,729 178,005 Net result for the year - - (14,635) - (14,635) Transfers to accumulated surplus - 15 (15) - - Revaluation of assets (408) - - - (408)

Year ended 31 December 2014 68,753 1,312 65,168 27,729 162,962 The statement of changes in equity should be read in conjunction with the notes to the financial statements.



Cash Flow Statementfor the year ended 31 December 2014

2014 2013Note $'000 $'000

Cash flows from operating activitiesReceipts

Government contributions - operating 2(a)(i) 63,174 57,611 Government contributions - capital 2(a)(ii) - 1,024 User fees and charges received 11,935 10,638 Goods and services tax recovered from the ATO - 883 Interest received 1,293 1,457 Other receipts 629 1,285 Total receipts 77,031 72,898

PaymentsPayments to suppliers and employees (78,437) (70,641)Goods and services tax paid to the ATO (191) - Other payments (81) (142)Total payments (78,709) (70,783)

Net cash flows from/(used in) operating activities 15(b) (1,678) 2,114

Cash flows from investing activitiesPayments for investments (38,861) (42,545)Proceeds from sale of investments 38,858 42,590 Purchases of non-financial assets (1,199) (771)Proceeds from sales of non-financial assets 216 221 Payments for intangible assets (93) (144)Net cash provided by/(used in) investing activities (1,078) (649)

Cash flows from financing activitiesRepayment of finance leases (22) (2)Proceeds from borrowings - 130 Net cash flows from/(used in) financing activities (22) 128

Net increase/(decrease) in cash and cash equivalents (2,779) 1,593 Cash and cash equivalents at the beginning of the financial year 52,863 51,270 Cash and cash equivalents at the end of the financial year 15(a) 50,085 52,863 The above cash flow statement should be read in conjunction with the notes to the financial statements.

Consolidated

FIN 9


Cash Flow Statementfor the year ended 31 December 2014

2014 2013Note $'000 $'000


Government contributions - operating 2(a)(i) 63,174 57,611 Government contributions - capital 2(a)(ii) - 1,024 User fees and charges received 11,935 10,638 Goods and services tax recovered from the ATO - 883 Interest received 1,293 1,457 Other receipts 629 1,285 Total receipts 77,031 72,898

PaymentsPayments to suppliers and employees (78,437) (70,641)Goods and services tax paid to the ATO (191) - Other payments (81) (142)Total payments (78,709) (70,783)

Net cash flows from/(used in) operating activities 15(b) (1,678) 2,114

Cash flows from investing activitiesPayments for investments (38,861) (42,545)Proceeds from sale of investments 38,858 42,590 Purchases of non-financial assets (1,199) (771)Proceeds from sales of non-financial assets 216 221 Payments for intangible assets (93) (144)Net cash provided by/(used in) investing activities (1,078) (649)

Cash flows from financing activitiesRepayment of finance leases (22) (2)Proceeds from borrowings - 130 Net cash flows from/(used in) financing activities (22) 128

Net increase/(decrease) in cash and cash equivalents (2,779) 1,593 Cash and cash equivalents at the beginning of the financial year 52,863 51,270 Cash and cash equivalents at the end of the financial year 15(a) 50,085 52,863 The above cash flow statement should be read in conjunction with the notes to the financial statements.

Consolidated


Notes to the Financial Statements

For the year ended 31 December 2014

CONTENTS

Note Accompanying Note

1 Statement of significant accounting policies

2 Income from transactions

3 Expenses from transactions

4 Other economic flows included in net result

5 Receivables

6 Investments and other financial assets

7 Inventories

8 Property, plant and equipment

9 Intangible assets

10 Other non-financial assets

11 Payables

12 Provisions

13 Borrowings

14 Reserves

15 Cash flow information

16 Commitments for expenditure

17 Contingent assets and contingent liabilities

18 Leases

19 Superannuation

20 Financial instruments

21 Responsible persons and executive officers

22 Related parties

23 Remuneration of auditors

24 Subsequent events

25 Economic dependency

26 Institute details


Gordon Institute of TAFENotes to the Financial StatementsFor the year ended 31 December 2014

NOTE 1

Summary of significant accounting policies

1.01 Statement of compliance

1.02

Critical accounting judgement and key sources of estimation uncertainty

• discount rates applied to material balances;

Fair value measurement

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

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

1.03 Reporting entity

Its principal address is:Gordon Institute of TAFE2 Fenwick StreetGeelong Victoria 3220

1.04 Basis of consolidation

The annual financial statements represent the audited general purpose financial statements for The Gordon Institute of TAFE. They have not been consolidated with the controlled entity of the Institute because the transactions and balances do not materially impact on the financial statements of The Institute.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 31 December 2014 and the comparative information presented for the year ended 31 December 2013.

The following is a summary of the material accounting policies adopted by the Institute in the preparation of the financial report. The accounting policies have been consistently applied unless otherwise stated.

These general purpose financial statements have been prepared in accordance with the Financial Management Act 1994 (FMA) and applicable Australian Accounting Standards (AAS) which include Interpretations, issued by the Australian Accounting Standards Board (AASB). In particular, they are presented in a manner consistent with the requirements of the AASB 1049 Whole of Government and General Government Sector Financial Reporting.

• the fair value of an asset other than land is generally based on its depreciated replacement value;

Judgements, estimates and assumptions are required to be made about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. Judgements made by management in the application of AASs that have significant effects on the financial statements and estimates relate to:

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

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

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

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

• non-financial physical assets which, subsequent to acquisition, are measured at a revalued amount being their fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are made with sufficient regularity to ensure that the carrying amounts do not materially differ from their fair value;

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

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

The Valuer General Victoria (VGV) is the Institute’s independent valuation agency.

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

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

• the fair value of land, buildings, infrastructure, plant and equipment;• superannuation expense; and• actuarial assumptions for employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates.

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

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

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

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

The Institute operates one controlled entity, Gotec Limited. All transactions related to the operation of Gotec are reported separately and not consolidated based on materiality.

FIN 11


NOTE 1



1.02


• discount rates applied to material balances;

Fair value measurement

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

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



1.04 Basis of consolidation

The annual financial statements represent the audited general purpose financial statements for The Gordon Institute of TAFE. They have not been consolidated with the controlled entity of the Institute because the transactions and balances do not materially impact on the financial statements of The Institute.


The following is a summary of the material accounting policies adopted by the Institute in the preparation of the financial report. The accounting policies have been consistently applied unless otherwise stated.


• the fair value of an asset other than land is generally based on its depreciated replacement value;


The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. Judgements made by management in the application of AASs that have significant effects on the financial statements and estimates relate to:

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


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

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

• non-financial physical assets which, subsequent to acquisition, are measured at a revalued amount being their fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are made with sufficient regularity to ensure that the carrying amounts do not materially differ from their fair value;

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

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

The Valuer General Victoria (VGV) is the Institute’s independent valuation agency.

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

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

• the fair value of land, buildings, infrastructure, plant and equipment;• superannuation expense; and• actuarial assumptions for employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates.

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

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

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

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

The Institute operates one controlled entity, Gotec Limited. All transactions related to the operation of Gotec are reported separately and not consolidated based on materiality.


NOTE 1


1.05 Events after reporting date

1.06 Goods and Services Tax (GST)

1.07 Income from transactions

Government contributions

Sale of goods and services(i) Student fees and charges

(ii) Fee for Service

(iii) Revenue from sale of goods

(a) the significant risks and rewards of ownership of the goods have transferred to the buyer;

Interest

Other income(i) Rental income

(ii) Other Income

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

1.08 Expenses from transactions

Employee benefits

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

(ii) Defined benefit plans

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

Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority are presented as operating cash flow.

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

(c) the amount of revenue can be reliably measured;(d) it is probable that the economic benefits associated with the transaction will flow to the Institute; and(e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.

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

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

Income is recognised to the extent that it is probable that the economic benefits will flow to the entity and the income can be reliably measured at fair value. Amounts disclosed as income are, where applicable, net of returns, allowances and duties and taxes. Revenue is recognised for each of the Institute’s major activities as follows:

Government contributions are recognised as revenue in the period when the Institute gains control of the contributions. Control is recognised upon receipt or notification by relevant authorities of the right to receive a contribution for the current period.

Student fees and charges revenue is recognised by reference to the percentage of services provided. Where student fees and charges revenue has been clearly received in respect of courses or programs to be delivered in the following year, any non-refundable portion of the fees is treated as revenue in the year of receipt and the balance as Revenue in Advance.

Fee for service revenue is recognised by reference to the percentage completion of each contract, i.e. in the reporting period in which the services are rendered. Where fee for service revenue of a reciprocal nature has been clearly received in respect of programs or services to be delivered in the following year, such amounts are disclosed as Revenue in Advance.

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

(b) the Institute retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

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

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

Rental income is recognised on a time proportional basis and is brought to account when the Institute's right to receive the rental is established.

Other income is recognised by reference to the percentage of services provided.

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

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

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

Retirement benefit obligations



NOTE 1


Depreciation

Class of asset Method Rate(s)Buildings Straight Line 2.0%Plant & equipment Straight Line 8-25%Motor vehicles Straight Line 20.0%Library collections Straight Line 10-25%Internal use software Straight Line 25.0%Artwork Straight Line 2.0%Land Improvements Straight Line 1-10%

Amortisation

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

Interest Expense

Grants and other transfers

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

1.09 Other economic flows included in net result

Net gain/(loss) on non-financial assets

Disposal of non-financial assets

Impairment of non-financial assets

• Inventories;• Financial assets;

Net gain/(loss) on financial instruments

Depreciation is provided on property, plant and equipment over $5,000 (2013: $5,000), including freehold buildings but excluding land. Depreciation is generally calculated on a straight-line basis, at rates that allocate the asset's value, less any estimated residual value, over its estimated useful life. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, and adjustments made where appropriate.

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

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

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

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses from revaluations, impairments, and disposals of all physical assets and intangible assets.

Any gain or loss on disposal of non-financial assets is recognised at the date control of the asset is passed to the buyer and is determined after deducting from the proceeds the carrying value of the asset at the time.

Goodwill and intangible assets with indefinite useful lives (and intangible assets not yet available for use) are tested annually for impairment (i.e. as to whether their carrying value exceeds their recoverable amount and so require write downs).

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

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

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

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

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

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

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

Resources provided free of charge or for nominal consideration are recognised at their fair value when the Institute obtains control over them, irrespective of whether these contributions are subject to restrictions or conditions over their use. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not received as a donation.

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

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

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash flows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell. It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

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

FIN 13


NOTE 1


Depreciation

Class of asset Method Rate(s)Buildings Straight Line 2.0%Plant & equipment Straight Line 8-25%Motor vehicles Straight Line 20.0%Library collections Straight Line 10-25%Internal use software Straight Line 25.0%Artwork Straight Line 2.0%Land Improvements Straight Line 1-10%

Amortisation

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

Interest Expense

Grants and other transfers

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

1.09 Other economic flows included in net result

Net gain/(loss) on non-financial assets

Disposal of non-financial assets

Impairment of non-financial assets

• Inventories;• Financial assets;

Net gain/(loss) on financial instruments

Depreciation is provided on property, plant and equipment over $5,000 (2013: $5,000), including freehold buildings but excluding land. Depreciation is generally calculated on a straight-line basis, at rates that allocate the asset's value, less any estimated residual value, over its estimated useful life. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, and adjustments made where appropriate.

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

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

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

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses from revaluations, impairments, and disposals of all physical assets and intangible assets.

Any gain or loss on disposal of non-financial assets is recognised at the date control of the asset is passed to the buyer and is determined after deducting from the proceeds the carrying value of the asset at the time.

Goodwill and intangible assets with indefinite useful lives (and intangible assets not yet available for use) are tested annually for impairment (i.e. as to whether their carrying value exceeds their recoverable amount and so require write downs).

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

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

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

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

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

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

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

Resources provided free of charge or for nominal consideration are recognised at their fair value when the Institute obtains control over them, irrespective of whether these contributions are subject to restrictions or conditions over their use. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not received as a donation.

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

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

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash flows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell. It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.

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


NOTE 1


Revaluations of financial instruments at fair value

Impairment of financial assets

Other gains/(losses) from other economic flows

1.10 Financial instruments

Categories of non‑derivative financial instrumentsLoans and receivables

Reclassification of financial instruments

1.11 Financial assetsCash and deposits

Receivables

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

Impairment of financial assets

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

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

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

Loans and receivables category includes cash and deposits (refer to Note 1.11), term deposits with maturity greater than three months, trade receivables, loans and other receivables, but not statutory receivables.

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

Financial assets have been assessed for impairment in accordance with Australian Account Standards. Where a financial asset's fair value at balance date has reduced by 20 per cent or more than its cost price; or where its fair value has been less than its cost price for a period of 9 or more months, the financial instrument is treated as impaired.

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

Receivables consist of:

• statutory receivables, which include predominantly amounts owing from the Victorian Government and GST input tax credits recoverable; and

• contractual receivables, which include debtors in relation to goods and services, loans to third parties, accrued investment income, and finance lease receivables

Receivables that are contractual are classified as financial instruments. Statutory receivables are not classified as financial instruments.

Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less an allowance for impairment.

A provision for doubtful receivables is made when there is objective evidence that the debts may not be collected and bad debts are written off when identified.

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

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

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

Cash and deposits, including cash equivalents, comprise cash on hand and cash at bank, deposits at call and those highly liquid investments with an original maturity of three months or less, which are held for the purpose of meeting short term cash commitments rather than for investment purposes, and which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Investments and other financial assets

Investments are classified in the following categories:

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

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

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

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

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

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

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

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



NOTE 1


1.12 Leases

1.13 Non-Financial AssetsInventories

Property, plant and equipment

Library collections

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

Revaluations of non-financial physical assets

The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.

In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets.

At the commencement of the lease term, finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the lease property or, if lower, the present value of the minimum lease payment, each determined at the inception of the lease. The lease asset is accounted for as a non-financial physical asset. If there is certainty that the Institute will obtain ownership of the lease asset by the end of the lease term, the asset shall be depreciated over the useful life of the asset. If there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and its useful life.

Minimum finance lease payments are apportioned between reduction of the outstanding lease liability, and periodic finance expense which is calculated using the interest rate implicit in the lease and charged directly to the comprehensive operating statement. Contingent rentals associated with finance leases are recognised as an expense in the period in which they are incurred.

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

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to ownership. Leases of property, plant and equipment are classified as finance infrastructure leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership from the lessor to the lessee. All other leases are classified as operating leases

Institute as lessee

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

Inventories held-for-distribution are measured at cost, adjusted for any loss of service potential. All other inventories are measured at the lower of cost and net realisable value. Where Inventories are acquired for no cost or nominal consideration, they are measured at current replacement cost at the date of acquisition.

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

The basis used in assessing loss of service potential for inventories held-for-distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the way it did when it was first acquired.

The fair value of cultural assets and collections, heritage assets and other non-financial physical assets that the State intends to preserve because of their unique historical, cultural or environmental attributes, is measured at the replacement cost of the asset less, where applicable, accumulated depreciation (calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset) and any accumulated impairment. These policies and any legislative limitations and restrictions imposed on their use and/or disposal may impact their fair value.

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

For the accounting policy on impairment of non-financial physical assets, refer to Note 1.09 on Impairment of non-financial assets.

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

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

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

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

Revaluation decreases are recognised immediately as expenses (other economic flows) in the net result, except to the extent that a credit balance exists in the revaluation reserve in respect of the same class of property, plant and equipment, they are debited to the revaluation reserve.

Revaluation increases and revaluation decreases relating to individual assets within a class of property, plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes.

Library collections are measured at cost less accumulated depreciation.

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

The Institute hold cultural assets, heritage assets, Crown land and infrastructure, which are deemed worthy of preservation because of the social rather than financial benefits they provide to the community. Consequently, there are certain limitations and restrictions imposed on their use and/or disposal.

Non-current physical assets measured at fair value are revalued in accordance with Financial Reporting Directions (FRDs) issued by the Minister for Finance. A full revaluation normally occurs every five years, based upon the asset’s government purpose classification, but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers are generally used to conduct these scheduled revaluations. Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value.

FIN 15


NOTE 1


1.12 Leases

1.13 Non-Financial AssetsInventories


Library collections

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

Revaluations of non-financial physical assets

The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.

In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets.

At the commencement of the lease term, finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the lease property or, if lower, the present value of the minimum lease payment, each determined at the inception of the lease. The lease asset is accounted for as a non-financial physical asset. If there is certainty that the Institute will obtain ownership of the lease asset by the end of the lease term, the asset shall be depreciated over the useful life of the asset. If there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and its useful life.

Minimum finance lease payments are apportioned between reduction of the outstanding lease liability, and periodic finance expense which is calculated using the interest rate implicit in the lease and charged directly to the comprehensive operating statement. Contingent rentals associated with finance leases are recognised as an expense in the period in which they are incurred.

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

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to ownership. Leases of property, plant and equipment are classified as finance infrastructure leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership from the lessor to the lessee. All other leases are classified as operating leases

Institute as lessee

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

Inventories held-for-distribution are measured at cost, adjusted for any loss of service potential. All other inventories are measured at the lower of cost and net realisable value. Where Inventories are acquired for no cost or nominal consideration, they are measured at current replacement cost at the date of acquisition.

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

The basis used in assessing loss of service potential for inventories held-for-distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the way it did when it was first acquired.

The fair value of cultural assets and collections, heritage assets and other non-financial physical assets that the State intends to preserve because of their unique historical, cultural or environmental attributes, is measured at the replacement cost of the asset less, where applicable, accumulated depreciation (calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset) and any accumulated impairment. These policies and any legislative limitations and restrictions imposed on their use and/or disposal may impact their fair value.

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

For the accounting policy on impairment of non-financial physical assets, refer to Note 1.09 on Impairment of non-financial assets.

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

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

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

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

Revaluation decreases are recognised immediately as expenses (other economic flows) in the net result, except to the extent that a credit balance exists in the revaluation reserve in respect of the same class of property, plant and equipment, they are debited to the revaluation reserve.

Revaluation increases and revaluation decreases relating to individual assets within a class of property, plant and equipment are offset against one another within that class but are not offset in respect of assets in different classes.

Library collections are measured at cost less accumulated depreciation.

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

The Institute hold cultural assets, heritage assets, Crown land and infrastructure, which are deemed worthy of preservation because of the social rather than financial benefits they provide to the community. Consequently, there are certain limitations and restrictions imposed on their use and/or disposal.

Non-current physical assets measured at fair value are revalued in accordance with Financial Reporting Directions (FRDs) issued by the Minister for Finance. A full revaluation normally occurs every five years, based upon the asset’s government purpose classification, but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers are generally used to conduct these scheduled revaluations. Revaluation increases or decreases arise from differences between an asset’s carrying value and fair value.


NOTE 1


Intangible assets

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

2014 2013Capitalised software development cost (years) 3-10 3-10

1.14 Liabilities Payables

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

Provisions

Employee benefits

(ii) Long service leave

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

(iii) Termination benefits

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

When recognition criteria AASB 138 Intangible Assets are met, internally generated intangible assets are recognised and measured at cost less accumulated depreciation/amortisation and impairment.

Expenditure on research activities is recognised as an expense in the period in which It is incurred.

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

(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and(f) the ability to measure reliably the expenditure attributable to the intangible asset during its development.

Payables consist of: • contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent liabilities for goods and services provided to the Institute prior to the end of the financial year that are unpaid, and arise when the Institute becomes obliged to make future payments in respect of the purchase of those goods and services; and

Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract.

Provisions are recognised when the Institute has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows.

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

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

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

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

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

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee decides to accept an offer of benefits in exchange for termination of employment. The Institute recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.

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

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

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

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

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



NOTE 1


Employee benefits on-costs

Performance Payments

Financial liabilities

1.15 Commitments

1.16 Contingent assets and contingent liabilities

1.17 EquityContributed capital

1.18 Foreign currency translationsFunctional and presentation currency

Transactions and balances

1.19

1.20 Rounding of amounts

1.21 Comparative information

1.22 Change in accounting policy

The Institute does not expect any significant impact from the adoption of these revised accounting standards.

1.23 New and revised AASBs in issue but not yet effective

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

Performance payments for the Institute's Executive Officers are based on a percentage of the annual salary package provided under the contract of employment. A liability is provided for under the term of the contracts at reporting date and paid out in the next financial year.

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

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

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note (refer to Note 17) and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of the GST receivable or payable respectively.

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

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

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

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

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

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

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

Subsequent to the 2013 reporting period, the following new and revised accounting standards have been adopted in the current period:

• AASB 10 Consolidated Financial Statements;• AASB 11 Joint Arrangements;• AASB 12 Disclosure of Interests in Other Entities;• AASB 127 Separate Financial Statements;• AASB 128 Investments in Associates and Joint Ventures;• AASB 1031 Materiality.

Foreign currency translation differences are recognised in other economic flows and accumulated in a separate component of equity, in the period in which they arise.

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

Certain new accounting standards and interpretations have been published that are not mandatory for the 31 December 2014 reporting period.

As at 31 December 2014 the following standards and interpretations (applicable to the Institute) had been issued but were not mandatory for financial year ending 31 December 2014. The Institute has not, and does not intend to, adopt these standards early.


NOTE 1


Application date of standard1 Jan 2018

1 Jan 2017

• AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010). • AASB 2014 -2 • AASB 2014 -1C• AASB 2014 -1B• AASB 2014 -1A• AASB 2014 -4• AASB 2014 -7• AASB 2014 -10• AASB 2014 -9• AASB 2014 -3• AASB 2014 -5

AASB 15 Revenue from Contracts with Customers AASB 15 will establish a comprehensive and robust framework for therecognition, measurement and disclosure of revenue from contracts withcustomers.AASB 15 will:- improve the comparability of revenue across transactions, industries,companies and capital markets- reduce the need for interpretative guidance to be developed on acase-by-case basis to address emerging revenue recognition issues.

The preliminary assessment has not identified any material impact arising from AASB 15, however, it will continue to be monitored and assessed.

In addition to the new standards above, the AASB has issued a list of amending standards that are not effective for the 2014 reporting period (as listed below). In general, these amending standards include editorial and references changes that are expected to have insignificant impacts on public sector reporting. The AASB Interpretation in the list below is also not effective for the 2014 reporting period and is considered to have insignificant impacts on public sector reporting.

Standard/Interpretation Summary Impact on entity financial statements

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

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

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

FIN 17


NOTE 1


Employee benefits on-costs

Performance Payments


1.15 Commitments



1.18 Foreign currency translationsFunctional and presentation currency

Transactions and balances

1.19



1.22 Change in accounting policy

The Institute does not expect any significant impact from the adoption of these revised accounting standards.


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

Performance payments for the Institute's Executive Officers are based on a percentage of the annual salary package provided under the contract of employment. A liability is provided for under the term of the contracts at reporting date and paid out in the next financial year.




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

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

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

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


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


Subsequent to the 2013 reporting period, the following new and revised accounting standards have been adopted in the current period:

• AASB 10 Consolidated Financial Statements;• AASB 11 Joint Arrangements;• AASB 12 Disclosure of Interests in Other Entities;• AASB 127 Separate Financial Statements;• AASB 128 Investments in Associates and Joint Ventures;• AASB 1031 Materiality.

Foreign currency translation differences are recognised in other economic flows and accumulated in a separate component of equity, in the period in which they arise.



As at 31 December 2014 the following standards and interpretations (applicable to the Institute) had been issued but were not mandatory for financial year ending 31 December 2014. The Institute has not, and does not intend to, adopt these standards early.


NOTE 1



1 Jan 2017

• AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010). • AASB 2014 -2 • AASB 2014 -1C• AASB 2014 -1B• AASB 2014 -1A• AASB 2014 -4• AASB 2014 -7• AASB 2014 -10• AASB 2014 -9• AASB 2014 -3• AASB 2014 -5

AASB 15 Revenue from Contracts with Customers AASB 15 will establish a comprehensive and robust framework for therecognition, measurement and disclosure of revenue from contracts withcustomers.AASB 15 will:- improve the comparability of revenue across transactions, industries,companies and capital markets- reduce the need for interpretative guidance to be developed on acase-by-case basis to address emerging revenue recognition issues.

The preliminary assessment has not identified any material impact arising from AASB 15, however, it will continue to be monitored and assessed.








NOTE 2

Income from transactions

2014 20132 Income from transactions $'000 $'000

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

(i) Government contributions - operatingState government - contestable 57,520 57,280 Other contributions by State Government 6,306 1,805 Total government contributions - operating 63,826 59,085

(ii) Government contributions - capital State capital - 1,024 Total government contributions - capital - 1,024

Total government contributions 63,826 60,109

(b) Sales of goods and servicesStudent fees and charges 5,814 5,126 Rendering of services

Fee for service - Government 1,237 1,346 Fee for service - International operations - onshore 427 943 Fee for service - International operations - offshore 336 134 Fee for service - other 3,236 2,634 Total rendering of services 5,236 5,056

Other non-course fees and chargesSale of goods 1,991 1,998 Total other fees and charges 1,991 1,998

Total revenue from sale of goods and services 13,041 12,180

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

Interest on bank deposits 1,292 1,457 Net interest income 1,292 1,457

(d) Other incomeRental income:

Rental revenue from student residence 373 356 Total rental income 373 356

Donations, bequests and contributions 143 139 Other revenue 638 315 Total other income 1,154 810

Institute

FIN 19




NOTE 3

Expenses from transactions

2014 20133 Expenses from transactions $'000 $'000

(a) Employee expensesSalaries, wages, overtime and allowances 35,796 36,309 Superannuation 3,272 3,168 Payroll tax 1,875 1,756 Worker's compensation 414 510 Long service leave 257 (207) Annual leave (516) (189) Other (10) 53 Total employee expenses 41,089 41,400

(b) Depreciation and amortisationDepreciation of non-current assets

Leased land improvements 1 7 Buildings 1,823 1,817 Plant and equipment 1,081 1,236 Motor vehicles 206 270 Library collections 91 104 Works of Art 4 4 Total depreciation 3,205 3,437

Amortisation of non-current physical and intangible assetsSoftware 661 532 Total amortisation 661 532

Total depreciation and amortisation 3,866 3,968

(c) Grants and other transfers (other than contributions by owners)Grants and subsidies apprentices and trainees 11 118 Total grants and other transfers 11 118

(d) Supplies and servicesPurchase of supplies and consumables 2,314 2,000 Communication expenses 494 425 Contract and other services 22,120 16,670 Cost of goods sold/distributed (ancillary trading) 1,789 1,803 Building repairs and maintenance 1,009 817 Minor equipment 1,153 303 Fees and charges 1,143 1,869 Total supplies and services 30,022 23,887

(e) Other operating expensesGeneral expenses

Marketing and promotional expenses 758 711 Audit fees and services 72 96 Staff development 427 288 Travel and motor vehicle expenses 888 652 Other expenses 1,371 1,401 Rent/leasing charges 284 155 Utilities 790 772 Total other expenses 4,591 4,075

Subtotal 4,591 4,075

Bad debts from transactions 27 753 Total other operating expenses 4,619 4,828

Institute





NOTE 4

Other economic flows included in net result

2014 20134 Other economic flows included in net result Note $'000 $'000

(a) Net gain/(loss) on non-financial assets (including PPE and intangible assets)Net gain on disposal of property plant and equipment 123 134 Net impairment of intangible assets 9 (14,301) - Total net gain/(loss) on non-financial assets (14,177) 134

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

Net gain/(loss) arising from revaluation of long service leave liability1 (179) 100 Total other gains/(losses) from other economic flows (179) 100

Notes:1

Institute

Revaluation gain/(loss) due to changes in bond rates.

FIN 21




NOTE 4

Other economic flows included in net result

2014 20134 Other economic flows included in net result Note $'000 $'000

(a) Net gain/(loss) on non-financial assets (including PPE and intangible assets)Net gain on disposal of property plant and equipment 123 134 Net impairment of intangible assets 9 (14,301) - Total net gain/(loss) on non-financial assets (14,177) 134

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

Net gain/(loss) arising from revaluation of long service leave liability1 (179) 100 Total other gains/(losses) from other economic flows (179) 100

Notes:1

Institute

Revaluation gain/(loss) due to changes in bond rates.




NOTE 5

Receivables

2014 20135 Receivables $'000 $'000

Current receivablesContractual

Sale of goods and services1 6,162 3,409 Provision for doubtful contractual receivables (See also Note 5(a) below) (660) (812) Other receivables 1,243 1,426 Total contractual 6,746 4,023

StatutoryAccounts owing from Victoria Government 7,581 6,929 Total statutory 7,581 6,929

Total current receivables 14,327 10,952

Total receivables 14,327 10,952

1

2014 2013(a) Movement in the provision for doubtful contractual receivables $'000 $'000

Balance at beginning of the year 812 125 Increase in provision recognised in the net result - 749 Reversal of provision of receivables written off during the year as uncollectible (152) (62) Balance at end of the year 660 812

(b) Ageing analysis of contractual receivablesPlease refer to Note 20(ii) for the ageing analysis of contractual receivables.

(c) Nature and extent of risk arising from contractual receivablesPlease refer to Note 20(ii) for the nature and extent of credit risk arising from contractual receivables.

Institute

Institute

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


Gordon Institute of TAFENotes to the Financial Statements


NOTE 6

Investments and other financial assets

2014 20136 Investments and other financial assets $'000 $'000

Current investments and other financial assets

Equities and managed investment schemes:

Australian unlisted equity securities 220 220

Less impairment provision (220) (220)

Total investments and other financial assets - -

Institute

FIN 23




NOTE 7

Inventories

2014 20137 Inventories $'000 $'000

CurrentInventories held-for-sale:

Books 152 146 Stationary 34 39 Food 10 11 Beverages 21 16

Inventories held-for-distribution:Floristry 2 4 Hairdressing supplies 30 21 Beauty Therapy Supplies 21 52

Total current inventories 270 289

Institute



NOTE 8


Land at fair value

Buildings Assets under construction

Plant and equipment

Plant and equipment in

progress

Motor Vehicles

Land Leasehold

Improvements

Library Works of Art Total

Institute $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000At 1 January 2013

Cost - 6,259 - - - - - 3,241 - 9,500 Valuation 15,280 83,950 789 15,820 35 2,121 34 - 183 118,212 Accumulated depreciation - (176) - (11,576) - (1,328) (26) (2,906) - (16,012) Net book amount 15,280 90,033 789 4,244 35 793 8 335 183 111,700

Year ended 31 December 2013Opening net book amount 15,280 90,033 789 4,244 35 793 8 335 183 111,700 Additions - 18 106 316 92 83 - 90 - 705 Disposals - - - (15) - (64) - - - (79) Depreciation2 - (1,817) - (1,236) - (270) (7) (104) (4) (3,438) Reclassification from non-current assets available for sale 790 130 - - - - - - - 920 Closing net book amount 16,070 88,365 895 3,308 126 542 1 321 179 109,807

At 31 December 2013Cost - 6,277 106 316 92 83 - 3,331 - 10,205 Valuation 16,070 84,080 789 15,805 34 2,056 34 - 183 119,051 Accumulated depreciation - (1,992) - (12,812) - (1,598) (33) (3,010) (4) (19,449) Net book amount 16,070 88,365 895 3,309 126 541 1 321 179 109,807

Year ended 31 December 2014Opening net book amount 16,070 88,365 895 3,309 126 541 1 321 179 109,807 Additions - 16 240 93 468 359 - 29 - 1,204 Disposals - - - (6) - (87) - - - (93) Revaluation of Buildings - (408) - - - - - - - (408) Transfer into/(out of) assets under construction - 172 (226) 444 (444) - 54 - - - Depreciation1 - (1,823) - (1,081) - (206) (1) (91) (4) (3,205) Closing net book amount 16,070 86,322 909 2,759 149 607 54 259 175 107,305

At 31 December 2014Cost - 188 14 93 23 359 54 29 - 760 Valuation 16,070 89,932 895 16,019 126 1,067 34 3,331 183 127,656 Accumulated depreciation - (3,798) - (13,353) - (819) (34) (3,101) (7) (21,112) Net book value at the end of the financial year 16,070 86,322 909 2,759 149 607 54 259 175 107,305

Notes1

Restricted assetsThe Institute holds properties listed as heritage assets with a carrying value of $14.5m. These heritage assets cannot be modified nor disposed of without formal ministerial approval.

(a) Fair value measurement hierarchy for assets as at 31 December 2014 Level 1 Level 2 Level 3

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

Prices Observable Price Inputs

Un-observable

Inputs $’000 $‘000 $‘000 $‘000

Land at fair value:Non specialised land 16,124 - 16,124 - Total of land at fair value 16,124 - 16,124 -

Buildings at fair value:Non specialised buildings 87,217 - 87,217 - Heritage assets 15 - - 15 Total of buildings at fair value 87,231 - 87,217 15

Plant, equipment and vehicles at fair value:Vehicles 607 - 607 - Plant and equipment 3,167 - - 3,167 Total of plant, equipment and vehicles at fair value 3,774 - 607 3,167

Cultural assets at fair value:Artworks 175 - 175 - Total of Cultural assets at fair value 175 - 175 - Total of assets 107,305 - 104,123 3,182

There were no transfers between Levels during the year.

(b) Valuations of Property, Plant and Equipment

The fair value of the freehold land was determined using market based evidence and considering the highest and best use for the land. There has been no change to the valuation technique during the year.

Heritage assets

Vehicles

Plant and equipment

There were no changes in valuation techniques throughout the period to 31 December 2014.

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

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

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

Carrying amount as at 31 Dec 2014

Fair value hierarchy

Fair value assessments have been performed at 31 December 2014 for all classes of assets. This assessment demonstrated that fair value was materially similar to carrying value, and therefore a full revaluation was not required this year. The Insitute conducted an independent valuation during 2012 and revised the carrying values accordingly. The next scheduled full revaluation for this purpose will be conducted in 2015.

Heritage assets are valued using the depreciated replacement cost method. This cost represents the replacement cost of the building/component after applying depreciation rates on a useful life basis. Replacement costs relate to costs to replace the current service capacity of the asset. Economic obsolescence has also been factored into the depreciated replacement cost calculation.

Where it has not been possible to examine hidden works such as structural frames and floors, the use of reasonable materials and methods of construction have been assumed bearing in mind the age and nature of the building. The estimated cost of reconstruction including structure services and finishes, also factors in any heritage classifications as applicable.

An independent valuation of the Institute's heritage assets was performed by the Valuer General Victoria. The valuation was performed based on the depreciated replacement cost of the assets. The effective date of the valuation was 31 December 2012.

Vehicles are valued using the depreciated replacement cost method. The Institute acquires new vehicles and at times disposes of them before the end of their economic life. The process of acquisition, use and disposal in the market is managed by experienced fleet managers in the Institute who set relevant depreciation rates during use to reflect the utilisation of the vehicles.

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

FIN 25


NOTE 8


Land at fair value

Buildings Assets under construction

Plant and equipment

Plant and equipment in

progress

Motor Vehicles

Land Leasehold

Improvements

Library Works of Art Total

Institute $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000At 1 January 2013

Cost - 6,259 - - - - - 3,241 - 9,500 Valuation 15,280 83,950 789 15,820 35 2,121 34 - 183 118,212 Accumulated depreciation - (176) - (11,576) - (1,328) (26) (2,906) - (16,012) Net book amount 15,280 90,033 789 4,244 35 793 8 335 183 111,700

Year ended 31 December 2013Opening net book amount 15,280 90,033 789 4,244 35 793 8 335 183 111,700 Additions - 18 106 316 92 83 - 90 - 705 Disposals - - - (15) - (64) - - - (79) Depreciation2 - (1,817) - (1,236) - (270) (7) (104) (4) (3,438) Reclassification from non-current assets available for sale 790 130 - - - - - - - 920 Closing net book amount 16,070 88,365 895 3,308 126 542 1 321 179 109,807

At 31 December 2013Cost - 6,277 106 316 92 83 - 3,331 - 10,205 Valuation 16,070 84,080 789 15,805 34 2,056 34 - 183 119,051 Accumulated depreciation - (1,992) - (12,812) - (1,598) (33) (3,010) (4) (19,449) Net book amount 16,070 88,365 895 3,309 126 541 1 321 179 109,807

Year ended 31 December 2014Opening net book amount 16,070 88,365 895 3,309 126 541 1 321 179 109,807 Additions - 16 240 93 468 359 - 29 - 1,204 Disposals - - - (6) - (87) - - - (93) Revaluation of Buildings - (408) - - - - - - - (408) Transfer into/(out of) assets under construction - 172 (226) 444 (444) - 54 - - - Depreciation1 - (1,823) - (1,081) - (206) (1) (91) (4) (3,205) Closing net book amount 16,070 86,322 909 2,759 149 607 54 259 175 107,305

At 31 December 2014Cost - 188 14 93 23 359 54 29 - 760 Valuation 16,070 89,932 895 16,019 126 1,067 34 3,331 183 127,656 Accumulated depreciation - (3,798) - (13,353) - (819) (34) (3,101) (7) (21,112) Net book value at the end of the financial year 16,070 86,322 909 2,759 149 607 54 259 175 107,305

Notes1

Restricted assetsThe Institute holds properties listed as heritage assets with a carrying value of $14.5m. These heritage assets cannot be modified nor disposed of without formal ministerial approval.

(a) Fair value measurement hierarchy for assets as at 31 December 2014 Level 1 Level 2 Level 3

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

Prices Observable Price Inputs

Un-observable

Inputs $’000 $‘000 $‘000 $‘000

Land at fair value:Non specialised land 16,124 - 16,124 - Total of land at fair value 16,124 - 16,124 -

Buildings at fair value:Non specialised buildings 87,217 - 87,217 - Heritage assets 15 - - 15 Total of buildings at fair value 87,231 - 87,217 15

Plant, equipment and vehicles at fair value:Vehicles 607 - 607 - Plant and equipment 3,167 - - 3,167 Total of plant, equipment and vehicles at fair value 3,774 - 607 3,167

Cultural assets at fair value:Artworks 175 - 175 - Total of Cultural assets at fair value 175 - 175 - Total of assets 107,305 - 104,123 3,182

There were no transfers between Levels during the year.

(b) Valuations of Property, Plant and Equipment

The fair value of the freehold land was determined using market based evidence and considering the highest and best use for the land. There has been no change to the valuation technique during the year.

Heritage assets

Vehicles

Plant and equipment

There were no changes in valuation techniques throughout the period to 31 December 2014.

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

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

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

Carrying amount as at 31 Dec 2014

Fair value hierarchy

Fair value assessments have been performed at 31 December 2014 for all classes of assets. This assessment demonstrated that fair value was materially similar to carrying value, and therefore a full revaluation was not required this year. The Insitute conducted an independent valuation during 2012 and revised the carrying values accordingly. The next scheduled full revaluation for this purpose will be conducted in 2015.

Heritage assets are valued using the depreciated replacement cost method. This cost represents the replacement cost of the building/component after applying depreciation rates on a useful life basis. Replacement costs relate to costs to replace the current service capacity of the asset. Economic obsolescence has also been factored into the depreciated replacement cost calculation.

Where it has not been possible to examine hidden works such as structural frames and floors, the use of reasonable materials and methods of construction have been assumed bearing in mind the age and nature of the building. The estimated cost of reconstruction including structure services and finishes, also factors in any heritage classifications as applicable.

An independent valuation of the Institute's heritage assets was performed by the Valuer General Victoria. The valuation was performed based on the depreciated replacement cost of the assets. The effective date of the valuation was 31 December 2012.

Vehicles are valued using the depreciated replacement cost method. The Institute acquires new vehicles and at times disposes of them before the end of their economic life. The process of acquisition, use and disposal in the market is managed by experienced fleet managers in the Institute who set relevant depreciation rates during use to reflect the utilisation of the vehicles.

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


NOTE 9

Intangible assets

SoftwareSoftware work

in progressTotal

Institute $ $ $

Year ended 31 December 2013Gross carrying amountOpening balance 2,111 788 2,899 Additions 17,424 144 17,568 Additions from internal developments 876 (876) - Closing balance 20,411 56 20,467

Accumulated depreciation, amortisation and impairmentOpening balance (1,205) - (1,205)

Amortisation of intangible non produced assets1 (532) - (532) Closing balance (1,737) - (1,737) Net book value at end of financial year 18,674 56 18,730

SoftwareSoftware work

in progressTotal

Institute $’000 $’000 $’000

Year ended 31 December 2014Gross carrying amountOpening balance 20,411 56 20,467 Additions 93 - 93 Impairment of assets (14,301) - (14,301) Closing balance 6,203 56 6,259

Accumulated depreciation, amortisation and impairmentOpening balance (1,737) - (1,737)

Amortisation of intangible non produced assets1 (661) - (661) Closing balance (2,398) - (2,398) Net book value at end of financial year 3,805 56 3,861

Notes1

Significant intangible assetsWebsite

Technology One Financials

Student Management System

Impairment losses are included in the line item ‘net gain/(loss) on non financial assets’ in the comprehensive operating statement.

The Institute commissioned the development of its Website in 2011. The carrying amount of the capitalised expenditure is $25,244 (2013: $72,316). Its useful life is 4 years and will be fully amortised in 2015.

The Institute commissioned the development of its core financial system, Technology One Financials, in 2009. The carrying amount of the capitalised expenditure is $nil (2013: $1,834). Its useful life was 4 years and was fully amortised in 2014.

The Institute commissioned the Student Management System (SMS) during 2013. The Institute was allocated a cost of $17.4m by the Department of Education and Early Childhood Development which was taken up through contributed capital. Additionally, the Institute capitalised $876,295 as part of the implementation and commissioning of the system. During 2014, the Institute conducted a review that resulted in the impairment of the SMS to a revised cost of $3,999,445 (the original capitalised cost was $18.3m). Its useful life remains at 10 years and will be fully amortised in 2023.



NOTE 10

Other non-financial assets

2014 201310 Other non-financial assets $'000 $'000

Current other non-financial assetsPrepayments 717 886 Total current other non-financial assets 717 886

Total other non-financial assets 717 886

Institute

FIN 27


NOTE 11

Payables

2014 201311 Payables $'000 $'000

CurrentContractual

Supplies and services1 2,127 4,710 Revenue in Advance 3,167 2,291

5,294 7,001 Statutory

GST payable 796 839 FBT payable 31 44

Total payables 6,121 7,884 Notes

1

(a) Maturity analysis of contractual payablesPlease refer to Note 20(iii) for the maturity analysis of contractual payables.

(b) Nature and extent of risk arising from contractual payablesPlease refer to Note 20(iii) for the nature and extent of risks arising from contractual payables.

Institute

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



NOTE 12

Provisions

2014 201312 Provisions $'000 $'000

Current provisions

Employee benefits (Note 12(a))1

Annual leave (Note 12(a)):

Unconditional and expected to wholly settle within 12 months2 1,910 2,426 Long service leave(Note 12(a)):

Unconditional and expected to wholly settle within 12 months2 4,245 4,060 Performance Payments 40 95

Total current provisions 6,195 6,581

Non-current

Employee benefits (Note 12(a))1 1,181 930

Total non-current provisions 1,181 930 Total provisions 7,376 7,511

Notes:1

2 Amounts are measured at present values.

2014 2013

Employee benefits and on costs1 $'000 $'000Current employee benefits

Annual leave 1,910 2,426 Long service leave 4,245 4,060 Performance Payments 40 95

6,195 6,581 Non current employee benefits

Long service leave 1,181 930 Total employee benefits 7,376 7,511

Notes1

Institute

Institute

Employee benefits consist of annual leave and long service leave accrued by employees. On costs such as payroll tax and workers’ compensation insurance are not employee benefits and are reflected as a separate provision.

Employee benefits consist of annual leave and long service leave accrued by employees. On costs such as payroll tax and workers’ compensation insurance are not employee benefits and are recognised as a separate provision.

FIN 29


NOTE 13

Borrowings

2014 201313 Borrowings $'000 $'000

CurrentFinance lease liabilities1

– secured finance lease liabilities 24 22 Total current borrowings 24 22

Non-currentFinance lease liabilities1

– secured finance lease liabilities 81 105 Total non-current borrowings 81 105 Total borrowings 105 127

1

Institute

Secured by the assets leased. Finance leases are effectively secured as the rights to the leased assets revert to the lessor in the event of default.



NOTE 14

Reserves

2014 201314 Reserves $'000 $'000

(a) Physical asset revaluation surplus1:Balance at 1 January 69,161 69,161 Revaluation increments/(decrements) (408) - Balance at 31 December 68,753 69,161

(b) Special and General Purpose ReservesBalance at 1 January 1,297 1,291 Transfers from accumulated surplus 15 6 Balance at 31 December 1,312 1,297

Total Reserves 70,065 70,458 Net changes in reserves 393 6

Notes1 The physical assets revaluation surplus arises on the revaluation of infrastructure, land and buildings.

Institute

FIN 31


NOTE 15

Cash flow information

2014 201315 Cash flow information $'000 $'000

(a) Reconciliation of cash and cash equivalentsCash at bank and on hand 2,902 857 Australian currency Deposits - at call 11,715 10,365 Deposits - at call with TCV 35,469 41,640 Balance as per cash flow statement 50,085 52,863

2014 2013(b) Reconciliation of net result for the period $'000 $'000

Net result for the year (14,650) 589

Non cash movements:(Gain)/loss on sale or disposal of non current assets (123) (134) (Gain)/loss on impairment of non current assets 14,301 - Depreciation and amortisation of non current assets 3,866 3,968 Transfers (to)/from reserves 15 -

Movements in assets and liabilitiesDecrease / (increase) in trade receivables (3,375) (818) Decrease / (increase) in inventories 19 20 Decrease / (increase) in other assets 168 (80) Increase / (decrease) in payables (1,762) 1,887 Increase / (decrease) in employee benefits (134) (558) Increase / (decrease) in current liabilities - (2,759)

Net cash flows from/(used in) operating activities (1,678) 2,114

Institute

Institute



NOTE 16

Commitments for expenditure

2014 201316 Commitments for expenditure $'000 $'000

(a) Capital expenditure commitments payable

Land and BuildingsPayable:

Within one year 254 - Total Land and Buildings 254 - GST reclaimable on the above 23 - Net Commitments Land and Buildings 231 -

At balance date, the Institute has committed to demolishing 'J' building at East Campus as part of its asset maximisation strategy. Work is to begin in January 2015 and is expected to be completed by the end of February 2015.

Institute

Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:

FIN 33


NOTE 16


2014 201316 Commitments for expenditure $'000 $'000

(a) Capital expenditure commitments payable

Land and BuildingsPayable:

Within one year 254 - Total Land and Buildings 254 - GST reclaimable on the above 23 - Net Commitments Land and Buildings 231 -

At balance date, the Institute has committed to demolishing 'J' building at East Campus as part of its asset maximisation strategy. Work is to begin in January 2015 and is expected to be completed by the end of February 2015.

Institute

Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:


NOTE 17

Contingent assets and contingent liabilities

2014 201317 Contingent Assets and Contingent Liabilities $'000 $'000

There were no contingent assets at balance date.The Institute has been contacted by the Department of Education and Training in relation to subcontracted short duration training delivery, in relation to funding claimed for 2014. The Institute is currently conducting a review, the outcome of which is unknown at the date of this report.

Institute



NOTE 18

Leases

Finance leases - Institute as lesseeLeasing arrangements

2014 2013$'000 $'000

Finance lease liabilities payable2

Within one year 31 31 Later than one year but not later than five years 90 121

Minimum future lease payments 121 152 Less future finance charges (16) (25) Present value of minimum lease payments 105 127 Included in the financials statements as:

Current borrowings lease liabilities (Note 13) 24 22 Non-current borrowings lease liabilities (Note 13) 81 105

Total included in financial statements 105 127 Notes:

1 Minimum future lease payments include the aggregate of all base payments and any guaranteed residual.2

Maturity analysis of finance lease liabilities and the nature and extent of risks arising from finance lease liabilities are disclosed in Note 20.

Leasing arrangements with Canon Finance Australia Pty Ltd for 2 Canon VP120 Printers over a period of 60 Months commencing December 2013 with a nominal residual value of $1 remaining at the end of the term.

Present value of minimum future lease

payments

Finance lease liabilities include obligations that are recognised on the balance sheet; the future payments related to operating and lease commitments are disclosed in Note 16 (Commitments).

FIN 35


NOTE 19

Superannuation

2014 201319 Superannuation $'000 $'000

Paid Contribution for the YearDefined benefit plans :

State Superannuation Fund – revised and new 205 251 Total defined benefit plans 205 251

Defined contribution plans:VicSuper 1,923 1,980 Other 893 652 Total defined contribution plans 2,816 2,632

Total paid contribution for the year 3,021 2,883

Contribution Outstanding at Year EndDefined benefit plans:

State Superannuation Fund – revised and new 16 20 Total defined benefit plans 16 20

Defined contribution plans:VicSuper 158 180 Other 77 86 Total defined contribution plans 235 266

Total 251 286

Employees of the Institute are entitled to receive superannuation benefits and the Institute contributes to both defined benefit and defined contribution plans. The defined benefit plan(s) provides benefits based on years of service and final average salary.The Institute does not recognise any defined benefit liability in respect of the plan(s) because the entity has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance recognises and discloses the State’s defined benefit liabilities in its financial statements.However, superannuation contributions paid or payable for the reporting period are included as part of employee benefits in the Statement of Comprehensive Income of the Institute.

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

Institute



Note 20

Financial instruments

(i) Financial risk management objectives and policies

2014 2013Carrying amount of financial instruments by category Note $'000 $'000

Loans and receivablesCash and deposits 15 50,085 52,863 Receivables1:

Trade receivables 5 5,503 2,597 Other receivables 5 1,243 1,426

Total loans and receivables 56,832 56,886 Total financial assets 56,832 56,886

Financial liabilities at amortised cost:Payables1:

Supplies and services 11 2,127 4,710 Borrowings:

Lease liabilities 13 105 128 Total financial liabilities at amortised cost 2,232 4,838

Total financial liabilities 2,232 4,838 Note:

1

2014 2013Net holding gain/(loss) on financial instruments by category Note $'000 $'000

(a) Net holding gain/(loss)Financial assets - loans and receivables 129 (749) Financial assets available -for-sale recognised in net result 1,292 1,457 Net holding gain/(loss) - financial assets 1,422 708 Financial liabilities at amortised cost (9) - Net holding gain/(loss) - financial liabilities (9) -

Total net holding gain/(loss) 1,413 708

(b) Interest Income/(expense)Financial assets available -for-sale recognised in net result 1,292 1,457 Interest income/(expense) - financial assets 1,292 1,457 Financial liabilities at amortised cost (9) - Interest income/(expense) - financial liabilities (9) -

Total interest income/(expense) 1,284 1,457

(c) Fee Income/(expense)Financial assets - loans and receivables 129 (749) Fee income/(expense) - financial assets 129 (749)

The net holding gains or losses are determined as follows:

The Institute's principal financial instruments comprise cash assets, term deposits, receivables (excluding statutory receivables), payables (excluding statutory payables) and finance lease payables.

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

The Institute's activities expose it to a variety of financial risks: market risk (including foreign currency risk, interest rate risk and price risk), credit risk and liquidity risk.

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

Risk management is carried out by the Institute under policies approved by the Board. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk, and investment of excess liquidity.

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

Institute

Receivables and payables disclosed here exclude statutory receivables and statutory payables (e.g. amounts owing to/from Victorian Government, GST input tax credit recoverable and taxes payable).

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

• for cash and cash equivalents, loans or receivables and available-for-sale financial assets, the net gain or loss is calculated by taking the movement in the fair value of the asset, the interest income, plus or minus foreign exchange gains or losses arising from revaluation of the financial assets, and minus any impairment recognised in the net result;

• for financial liabilities measured at amortised cost, the net gain or loss is calculated by taking the interest expense, plus or minus foreign exchange gains or losses arising from the revaluation of financial liabilities measured at amortised cost; and

• for financial asset and liabilities that are designated at fair value through profit or loss, the net gain or loss is calculated by taking the movement in the fair value of the financial asset or liability.

Institute

FIN 37


Note 20

Financial instruments


2014 2013Carrying amount of financial instruments by category Note $'000 $'000

Loans and receivablesCash and deposits 15 50,085 52,863 Receivables1:

Trade receivables 5 5,503 2,597 Other receivables 5 1,243 1,426

Total loans and receivables 56,832 56,886 Total financial assets 56,832 56,886

Financial liabilities at amortised cost:Payables1:

Supplies and services 11 2,127 4,710 Borrowings:

Lease liabilities 13 105 128 Total financial liabilities at amortised cost 2,232 4,838

Total financial liabilities 2,232 4,838 Note:

1

2014 2013Net holding gain/(loss) on financial instruments by category Note $'000 $'000

(a) Net holding gain/(loss)Financial assets - loans and receivables 129 (749) Financial assets available -for-sale recognised in net result 1,292 1,457 Net holding gain/(loss) - financial assets 1,422 708 Financial liabilities at amortised cost (9) - Net holding gain/(loss) - financial liabilities (9) -

Total net holding gain/(loss) 1,413 708

(b) Interest Income/(expense)Financial assets available -for-sale recognised in net result 1,292 1,457 Interest income/(expense) - financial assets 1,292 1,457 Financial liabilities at amortised cost (9) - Interest income/(expense) - financial liabilities (9) -

Total interest income/(expense) 1,284 1,457

(c) Fee Income/(expense)Financial assets - loans and receivables 129 (749) Fee income/(expense) - financial assets 129 (749)

The net holding gains or losses are determined as follows:

The Institute's principal financial instruments comprise cash assets, term deposits, receivables (excluding statutory receivables), payables (excluding statutory payables) and finance lease payables.


The Institute's activities expose it to a variety of financial risks: market risk (including foreign currency risk, interest rate risk and price risk), credit risk and liquidity risk.

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

Risk management is carried out by the Institute under policies approved by the Board. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, credit risk, and investment of excess liquidity.

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

Institute


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

• for cash and cash equivalents, loans or receivables and available-for-sale financial assets, the net gain or loss is calculated by taking the movement in the fair value of the asset, the interest income, plus or minus foreign exchange gains or losses arising from revaluation of the financial assets, and minus any impairment recognised in the net result;



Institute


Note 20

Financial instruments (continued)

(ii) Credit risk

Credit quality of contractual financial assets that are neither past due nor impaired 1

Financial institutions

(AAA rating)

Government agencies

(AAA rating)

Other counter-

party Total

$'000 $'000 $'000 $'00014,617 35,469 - 50,085

Receivables - - 6,746 6,746 Total contractual financial assets 2014 14,617 35,469 6,746 56,832

11,222 41,640 - 52,863 Receivables - - 4,023 4,023 Total contractual financial assets 2013 11,222 41,640 4,023 56,886

Note1

Ageing analysis of financial assets

Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years

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

Receivables1:Trade receivables 5,503 2,273 2,716 438 76 - - Other receivables 1,243 1,243 - -

Investment and other financial assets:Cash and deposits 50,085 50,085 - - - - -

Total 2014 financial assets 56,832 53,602 2,716 438 76 - -

Receivables1:Trade receivables 2,597 1,827 412 310 48 - - Other receivables 1,426 1,426 - - - - -

Investment and other financial assets:Cash and deposits 52,863 52,863 - - - - -

Total 2013 financial assets 56,886 56,116 412 310 48 - - Note

1

• Accounts overdue greater than 90 days are sent to a debt collection agency.

Credit risk arises from the contractual financial assets of the Institute, which comprise cash and deposits, non-statutory receivables and available-for-sale contractual financial assets. The Institute’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the Institute.

Credit risk is measured at fair value and is monitored on a regular basis by the finance department. The finance department monitors credit risk by actively assessing the rating quality and liquidity of counterparties:

• all potential customers are rated for credit worthiness taking into account their size, market position and financial standing; and• customers that do not meet the Institute’s strict credit policies may only purchase in cash or using recognised credit cards.

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

The trade receivables balance at 31 December 2014 and 31 December 2013 do not include any counterparties with external credit ratings. Customers are assessed for credit worthiness using the criteria detailed above.

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

• 25% deposit required, deposits less than 25% are only excepted after scrutiny and referral to Student Counsellor/Enterprise Manager;

• Student loans must relate to the costs of attendance at the institute including enrolment and material fees;

• A schedule of repayments is agreed at commencement of the loan, with full repayment required prior to course completion date;

• Students in arrears are contacted via telephone/letter/SMS to request payment and resolve any issues;

There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated.

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

Provision of impairment for contractual financial assets is recognised when there is objective evidence that the Institute will not be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 120 days overdue, and changes in debtor credit ratings.

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

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

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

2014Cash and deposits


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

2013 Financial assets


The following table discloses the ageing analysis for the Institute's financial assets.

Carrying amount

Not past due and not

impaired

Past due but not impairedImpaired financial

assets




Note 20


(iii) Liquidity risk

Maturity analysis of financial liabilities

Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years

5+ years

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

Payables1:Supplies and services 2,127 1,664 429 29 5 - -

BorrowingsLease liabilities 105 105 - - 24 81 -

Total 2014 financial liabilities 2,232 1,769 429 29 29 81 -


BorrowingsLease liabilities 128 128 - - 22 106

Total 2013 financial liabilities 4,838 4,308 484 35 33 106 - Note

1

• careful maturity planning of its financial obligations by matching the maturity profiles of financial assets and liabilities, and continuously monitoring forecast and actual cash flows.

Liquidity risk is the risk that the Institute would be unable to meet its financial obligations as and when they fall due. The Institute operates under payments policy of settling financial obligations within 30 days and in the event of a dispute, making payments within 30 days from the date of resolution.

The Institute’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet and the amounts related to commitments disclosed in Note 16.

The responsibility for liquidity risk management rests with the institute's governing body, which has built an appropriate liquidity risk management framework for the management of the short, medium and long-term funding and liquidity requirements. The Institute manages liquidity risk by:

• maintaining an adequate level of reserves and uncommitted funds that can be drawn at short notice to meet its short‑term obligations;

• holding investments and other contractual financial assets that are readily tradeable in the financial markets; and

The Institute’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and current assessment of risk.

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

The carrying amount detailed in the following table of contractual financial liabilities recorded in the financial statements, represents the Institute's maximum exposure to liquidity risk.

The following table discloses the contractual maturity analysis for the Institute's financial liabilities.

Carrying amount

Nominal amount

Maturity dates

2014 Financial liabilities



FIN 39


Note 20




Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years

5+ years

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


BorrowingsLease liabilities 105 105 - - 24 81 -

Total 2014 financial liabilities 2,232 1,769 429 29 29 81 -


BorrowingsLease liabilities 128 128 - - 22 106

Total 2013 financial liabilities 4,838 4,308 484 35 33 106 - Note

1

• careful maturity planning of its financial obligations by matching the maturity profiles of financial assets and liabilities, and continuously monitoring forecast and actual cash flows.

Liquidity risk is the risk that the Institute would be unable to meet its financial obligations as and when they fall due. The Institute operates under payments policy of settling financial obligations within 30 days and in the event of a dispute, making payments within 30 days from the date of resolution.

The Institute’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet and the amounts related to commitments disclosed in Note 16.

The responsibility for liquidity risk management rests with the institute's governing body, which has built an appropriate liquidity risk management framework for the management of the short, medium and long-term funding and liquidity requirements. The Institute manages liquidity risk by:

• maintaining an adequate level of reserves and uncommitted funds that can be drawn at short notice to meet its short‑term obligations;

• holding investments and other contractual financial assets that are readily tradeable in the financial markets; and

The Institute’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and current assessment of risk.

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

The carrying amount detailed in the following table of contractual financial liabilities recorded in the financial statements, represents the Institute's maximum exposure to liquidity risk.

The following table discloses the contractual maturity analysis for the Institute's financial liabilities.

Carrying amount

Nominal amount

Maturity dates





Note 20


(iv) Market risk

Interest rate risk

Financial instrument composition and interest rate exposure

Consolidated

Floating interest rate

Fixed interest rate

Non-Interest Bearing

% $'000 $'000 $'000 $'000Financial assetsCash and deposits 2.73% 50,085 14,617 35,469 - Receivables1:

Trade receivables 5,503 - - 5,503 Other receivables 1,243 - - 1,243

Total financial assets 56,832 14,617 35,469 6,746

Financial liabilitiesPayables1:

Supplies and services 2,127 - - 2,127

BorrowingsLease liabilities 16.30% 105 - 105 -

Total financial liabilities 2,232 - 105 2,127

Consolidated


Fixed interest rate


% $'000 $'000 $'000 $'000Financial assetsCash and deposits 2.62% 52,863 857 52,006 - Receivables1:

Trade receivables 2,597 - - 2,597 Other receivables 1,426 - - 1,426

Total financial assets 56,886 857 52,006 4,023


Supplies and services 4,710 - - 4,710

BorrowingsLease liabilities 16.30% 128 - 128 -

Total financial liabilities 4,838 - 128 4,710

Note1

The Institute in its daily operations is exposed to a number of market risks. Market risks relate to the risk that market rates and prices will change and that this will have an adverse affect on the operating result and/or net worth of the Institute. e.g. an adverse movement in interest rates or foreign currency exchange rates.

The Institute’s exposures to market risk are primarily through interest rate risk and equity price risk. Objectives, policies and processes used to manage each of these risks are disclosed below.

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

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

Interest rate movements have not been sufficiently significant during the year to have an impact on the Institute's year end result.

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

Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market interest rates. The Institute does not hold any interest bearing financial instruments that are measured at fair value, and therefore has no exposure to fair value interest rate risk.

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Institute has minimal exposure to cash flow interest rate risk through its cash and deposits that are at floating rate.

The Institute manages cash flow interest rate risk through a mixture of short term and longer term investments, and undertaking fixed rate or non-interest bearing financial instruments with relatively even maturity profiles, with only insignificant amounts of financial instruments at floating rate. Management monitors movement in interest rates on monthly basis.

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

The Institute's exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities are set out in the financial instrument composition and maturity analysis table below.

Weighted average

effective rate

Total Carrying Amount per

Balance Sheet

Interest rate exposure

2014

Weighted average

effective rate


Balance Sheet


2013




Note 20


Sensitivity analysis and assumptions

Consolidated Result Equity Result Equity31 December 2014 $'000 $'000 $'000 $'000 $'000Contractual financial assetsCash and deposits 50,085 (501) - 501 -

Receivables 1 6,746 - - - - Total increase/(decrease) in financial assets (501) - 501 -

Contractual financial liabilities

Payables 1 2,127 - - - - Borrowings 105 - - - - Total increase/(decrease) in financial liabilities - - - - Total increase/ (decrease) (501) - 501 -

Consolidated Result Equity Result Equity31 December 2013 $'000 $'000 $'000 $'000 $'000Contractual financial assetsCash and cash equivalents 52,863 (529) - 529 -

Receivables 1 4,023 - - - - Total increase/(decrease) in financial assets (529) - 529 -

Contractual financial liabilities

Payables 1 4,710 - - - - Borrowings 128 - - - - Total increase/(decrease) in financial liabilities - - - - Total increase/ (decrease) (529) - 529 -

Note1

(v) Funding risk

The following tables show the impact on the Institute’s net result and equity for each category of financial instrument held by the Institute at the end of the reporting period as presented to key management personnel, if the above movements were to occur.

The Institute’s sensitivity to market risk is determined based on the observed range of actual historical data for the preceding five year period, with all variables other than the primary risk variable held constant. The Institute cannot be expected to predict movements in market rates and prices. Sensitivity analyses shown are for illustrative purposes only. The following movements are ‘reasonably possible’ over the next 12 months:

• a movement of 100 basis points up and down (2013: 100 basis points up and down) in market interest rates (AUD);

Carrying amount

Interest rate risk- 100 basis points + 100 basis points


Funding risk is the risk of over reliance on a particular funding source to the extent that a change in that funding source could impact on the operating result for the current year and future years.

The Institute manages funding risk by continuing to diversify and increase funding from Commercial activities, both domestically and off shore.

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

Carrying amount


FIN 41


Note 20


(vi) Fair value estimation

Carrying Amount

Net Fair Value

Carrying Amount

Net Fair Value

$’000 $’000 $’000 $’000Financial assetsCash and deposits 50,085 50,085 52,863 52,863

Receivables1:Trade receivables 5,503 5,503 2,597 2,597 Other receivables 1,243 1,243 1,426 1,426

Total financial assets 56,832 56,832 56,886 56,886


Payables1:Supplies and services 2,127 2,127 4,710 4,710

BorrowingsLease liabilities 105 105 128 128

Total financial liabilities 2,232 2,232 4,838 4,838 Note

1 Receivables and payables disclosed here exclude statutory receivables and statutory payables (e.g. amounts owing to/from Victorian Government, GST input tax credit recoverable and taxes payable).

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

Fair values of financial instrument asset and liabilities are determined using the fair value hierarchy that categorises the inputs to valuation techniques used to measure fair value into three levels based on the degree to which the fair value is observable.

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities that the Institute can access at the measurement date.

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Institute considers that the carrying amount of trade receivables and payables is a reasonable approximation of their fair values due to the short-term nature of trade receivables and payables.

Due to the short-term nature of the current receivables, their carrying value is assumed to approximate their fair value, and based on credit history it is expected that the receivables that are neither past due nor impaired will be received when due.

For other assets and other liabilities the fair value approximates their carrying value. Financial assets where the carrying amount exceeds fair values have not been written down as the Institute intends to hold these assets to maturity.

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

2014 2013

The Institute did not have any financial instruments that are measured subsequent to initial recognition at fair value as at 31 December 2014.



Note 21

Responsible persons and executive officers

(i) Minister

(ii) Chief executive officer (accountable officer)

(iii) Members of the boardCEO - Lisa Line

Ministerial Nominee Directors - Date of Appointment / Re-appointment

Board Chair - Brian Williamson 16th of April 2013

Deputy Chair - Justin Giddings 1st of September 2013

Brendan Foran 1st of May 2014

Steve Griffin 1st of September 2013

Jodi Heath 1st of September 2013

Board Nominee Directors - Date of Appointment / Re-appointment

Allana Goldsworthy 1st of September 2013

Catherine Birrell 1st of May 2014

Denis Peacock 1st of May 2014

Kate Sullivan Resigned 27th of February 2014

Kerry Thompson Appointed 25th of August 2014

2014 No.

2013No.

Income range

Less than $10,000 2 1 $10,000 - $19,999 3 6 $20,000 - $29,999 3 1 $30,000 - $39,999 1 - $40,000 - $49,999 - 1 $210,000 - $219,999 - 1 $300,000 - $309,999 1 - $340,000 - $349,999 - 1

Total number of board members 10 11 Total remuneration of board members 754)000'$( 741

Remuneration of the relevant Minister is disclosed in the financial report of the Department of Premier and Cabinet. Other relevant interests are declared in the Register of Members’ Interests which is completed by each member of the Parliament.

Lisa Line

Remuneration received or receivable by the chief executive officer in connection with the management of the Institute during the reporting period was in the range:

Remuneration Range: [ $300 000 - $ 309 999 ]

Remuneration of the board members in connection with the management of the Institute are disclosed below.

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

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

The relevant Minister was The Hon. Peter Hall, MLC, Minister for Higher Education and Skills until his retirement from parliament on 17 March 2014.

The Hon. Nick Wakeling, MP, was the Minister for Higher Education and Skills from 17 March 2014 to 3 December 2014.

The Hon. Steve Herbert, MP, was sworn in as the current Minister for Training and Skills from 3 December 2014 following the State election in November 2014.

FIN 43


Note 21


(i) Minister

(ii) Chief executive officer (accountable officer)

(iii) Members of the boardCEO - Lisa Line

Ministerial Nominee Directors - Date of Appointment / Re-appointment

Board Chair - Brian Williamson 16th of April 2013

Deputy Chair - Justin Giddings 1st of September 2013

Brendan Foran 1st of May 2014

Steve Griffin 1st of September 2013

Jodi Heath 1st of September 2013

Board Nominee Directors - Date of Appointment / Re-appointment

Allana Goldsworthy 1st of September 2013

Catherine Birrell 1st of May 2014

Denis Peacock 1st of May 2014

Kate Sullivan Resigned 27th of February 2014

Kerry Thompson Appointed 25th of August 2014

2014 No.

2013No.

Income range

Less than $10,000 2 1 $10,000 - $19,999 3 6 $20,000 - $29,999 3 1 $30,000 - $39,999 1 - $40,000 - $49,999 - 1 $210,000 - $219,999 - 1 $300,000 - $309,999 1 - $340,000 - $349,999 - 1

Total number of board members 10 11 Total remuneration of board members 754)000'$( 741


Lisa Line

Remuneration received or receivable by the chief executive officer in connection with the management of the Institute during the reporting period was in the range:

Remuneration Range: [ $300 000 - $ 309 999 ]

Remuneration of the board members in connection with the management of the Institute are disclosed below.

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


The relevant Minister was The Hon. Peter Hall, MLC, Minister for Higher Education and Skills until his retirement from parliament on 17 March 2014.




Note 21


(iv) Executive officers

Remuneration of executive officers

2014 No.

2013No.

2014 No.

2013No.

Income range

[Insert income bands of $10,000 here:e.g. $150,000 - $159,999 1 - 2 -

$170,000 - $179,999 1 - - - $250,000 - $259,000 - - 1 - $300,000 - $309,999 1 - - -

Total number of executive officers 3 - 3 - Total annualised employee equivalent (AEE) 3 - 3 - Total amount of remuneration ($'000) 629$ -$ 560$ -$

Other transactions

The number of executive officers whose total remuneration from the Institute exceeded $100,000, separately identifying base remuneration and total remuneration, disclosed within the income band of $10,000 in a table format:

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

Chief Executive Officer - Lisa Line, Deputy Chief Executive Officer - Darren Gray, Chief Operating Officer - Joe Ormeno.

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

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

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

Total Remuneration Base Remuneration

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



NOTE 22

Related parties

Key management personnelRelated parties disclosures are set out in Note 21 (Responsible persons and executive officers).

Transactions with related partiesThe following transactions occurred with related parties:

2014 2013(i) Related parties $'000 $'000

Sale of goods and servicesSt John of God Hospital 1 2 Avalon Airport 2 1 City of Greater Geelong 164 127 Barwon Water 4 3 Gforce Employment Solutions 50 47 Northern Futures 25 13 Greening Australia 2 - Total sale of goods and services 249 193

Purchase of goods and servicesCity of Greater Geelong 4 4 St John of God Hospital 15 - Committee for Geelong 3 11 Gforce Employment Solutions 148 142 Northern Futures 37 34 Greening Australia 56 - Total purchase of goods 262 191

Outstanding balancesThe following balances are outstanding at the reporting date in relation to transactions with related parties:

2014 2013(ii) Related parties $'000 $'000

Current receivables (sale of goods and services)St John of God Hospital 1 1 Gforce Employment Solutions 3 - City of Greater Geelong 19 49 Total current receivables 23 50

Non-current receivables (loans)Commonly controlled entities 41 41 Total non-current receivables 41 41

Current payables (purchases of goods)City of Greater Geelong 1 - Total Current payables 1 -

Institute

Institute

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

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

FIN 45


NOTE 23

Remuneration of auditors

2014 201323 Remuneration of auditors $'000 $'000

Remuneration of Victorian Auditor General's Office for:Audit of the financial statements 65 59 Total remuneration of Victoria Auditor General's Office 65 59

Remuneration of other auditorsWHK Howarth 7 25 WHK Howarth - Other Services 0 12 Total remuneration of other auditors 7 37

Total Remuneration of auditors 72 96

Institute



NOTE 24

Subsequent events

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

FIN 47


NOTE 25

Economic dependency

2014 201325 Economic dependency $'000 $'000

Higher Education and Skills Group 57,519 58,304 57,519 58,304

Higher Education and Skills Group

The Institute receives 72% (2013: 78%) of its annual funding from the Higher Education and Skills Group.

Institute


NOTE 24

Subsequent events




NOTE 26

Institute details

26 Institute detailsThe registered office of the Institute is:

Gordon Institute of TAFE2 Fenwick Street, Geelong Victoria 3220

The principal place of business is:

Gordon Institute of TAFE2 Fenwick Street, Geelong Victoria 3220


NOTE 24

Subsequent events


PERFORMANCE STATEMENT FOR THE YEAR ENDED 31st DECEMBER 2014

Strategic Priority 1: Maintain Institute Sustainability

Key Performance Indicator Description 2013

Result 2014 Target

2014 Result Commentary



3.9% 6.6% 2.7%

Whilst not achieving our 2014 target, The Gordon is encouraged by the result in what has been a challenging year.



6.8% 5.7% 6.6%


Return on investment Net surplus as a percentage of non-current assets

0.28 0.0%* (13.13)%


*Target set by the Higher Education and Skills Group.

Strategic Priority 2: The Gordon’s Value Proposition


Result 2014 Target



Satisfaction with Overall Quality of Training, compared to the to the sector average

89.6% 84.6% 91.5%

The Gordon value proposition is centred on delivering strong benefits to students and has resulted in a satisfaction rating significantly higher than the sector average.



65.1% 57.0% 66.1%

The Gordon is focused on delivering training linked to job outcomes. The result for graduates with an improved employment status is higher than the sector average.



7.3% 9.1% 7.8%*

Whilst there is no statistically significant difference, The Gordon’s result appears lower than the benchmark. Throughout 2014 The Gordon has developed guaranteed pathways to Deakin University to further build higher education pathways over the next three years.

Source: The Social Research Centre 2014, Australian vocational education and training statistics: student outcomes: 2014 institute report: The Gordon, NCVER, Adelaide. Sector average relates to ‘All VET providers VIC’. * Result has a high standard error (above 25%)

FIN 49

PERFORMANCE STATEMENT FOR THE YEAR ENDED 31st DECEMBER 2014

Strategic Priority 1: Maintain Institute Sustainability


Result 2014 Target




3.9% 6.6% 2.7%

Whilst not achieving our 2014 target, The Gordon is encouraged by the result in what has been a challenging year.



6.8% 5.7% 6.6%


Return on investment Net surplus as a percentage of non-current assets

0.28 0.0%* (13.13)%


*Target set by the Higher Education and Skills Group.

Strategic Priority 2: The Gordon’s Value Proposition


Result 2014 Target



Satisfaction with Overall Quality of Training, compared to the to the sector average

89.6% 84.6% 91.5%

The Gordon value proposition is centred on delivering strong benefits to students and has resulted in a satisfaction rating significantly higher than the sector average.



65.1% 57.0% 66.1%

The Gordon is focused on delivering training linked to job outcomes. The result for graduates with an improved employment status is higher than the sector average.



7.3% 9.1% 7.8%*

Whilst there is no statistically significant difference, The Gordon’s result appears lower than the benchmark. Throughout 2014 The Gordon has developed guaranteed pathways to Deakin University to further build higher education pathways over the next three years.

Source: The Social Research Centre 2014, Australian vocational education and training statistics: student outcomes: 2014 institute report: The Gordon, NCVER, Adelaide. Sector average relates to ‘All VET providers VIC’. * Result has a high standard error (above 25%)

FIN 51

FIN 53


Gotec LimitedFor the year ended 31 December 2014

FIN 55


13 March 2015

FIN 57


Gotec LimitedComprehensive Operating Statementfor the year ended 31 December 2014

2014 2013Note $ $

Continuing operationsIncome from transactionsInterest 3 438 435 Total income from transactions 438 435

Expenses from transactionsOther operating expenses 4 156 156 Total expenses from transactions 156 156 Net result from transactions (net operating balance) 282 279

Other economic flows included in net resultTotal other economic flows included in net result - - Net result from continuing operations 282 279

Net result 282 279

Other economic flows - other comprehensive incomeTotal other economic flows – Other comprehensive income - - Comprehensive result 282 279

The comprehensive operating statement should be read in conjunction with the notes to the financial statements.

FIN 59

Gotec LimitedBalance Sheetas at 31 December 2014

2014 2013Note $ $

AssetsFinancial assets

Cash and deposits 6 43,945 43,663 Total financial assets 43,945 43,663

Non-financial assetsTotal non-financial assets - -

Total assets 43,945 43,663

LiabilitiesPayables 5 41,345 41,345 Total liabilities 41,345 41,345

Net assets 2,600 2,318

EquityAccumulated surplus/(deficit) 2,600 2,318 Net worth 2,600 2,318

Commitments for expenditure 7 - - Contingent assets and contingent liabilities 8 - - The balance sheet should be read in conjunction with the notes to the financial statements.


Gotec LimitedStatement of Changes in Equityfor the year ended 31 December 2014

Accumulated surplus Contributions by owner Total

Note $ $ $At 1 January 2013 2,039 - 2,039

Net result for the year 279 - 279 Year ended 31 December 2013 2,318 - 2,318

Net result for the year 282 282 Year ended 31 December 2014 2,600 - 2,600 The statement of changes in equity should be read in conjunction with the notes to the financial statements.

FIN 61

Gotec LimitedStatement of Changes in Equityfor the year ended 31 December 2014

Accumulated surplus Contributions by owner Total

Note $ $ $At 1 January 2013 2,039 - 2,039

Net result for the year 279 - 279 Year ended 31 December 2013 2,318 - 2,318

Net result for the year 282 282 Year ended 31 December 2014 2,600 - 2,600 The statement of changes in equity should be read in conjunction with the notes to the financial statements.

Gotec LimitedCash Flow Statementfor the year ended 31 December 2014

2014 2013Note $ $


Interest received 438 435 Total receipts 438 435

PaymentsOther payments (156) (156)Total payments (156) (156)

Net cash flows from/(used in) operating activities 6(b) 282 279

Net increase/(decrease) in cash and cash equivalents 282 279 Cash and cash equivalents at the beginning of the financial year 43,663 43,384 Cash and cash equivalents at the end of the financial year 6(a) 43,945 43,663

Non-cash financing and investing activities - - The above cash flow statement should be read in conjunction with the notes to the financial statements.


Gotec LimitedNotes to the Financial Statementsfor the year ended 31 December 2014

CONTENTS


1 Principal Activities




5 Payables






11 Related Parties


FIN 63


CONTENTS






5 Payables






11 Related Parties


GOTEC LimitedNotes to the Financial Statementsfor the year ended 31 December 2014

NOTE 1

Principal Activities


Gotec Limited was incorporated on 15th May 1985, and is a company limited by guarantee. The principal objective of the company was to provide vocationally oriented training to meet specific needs of business, industry, government and individuals not otherwise conducted as accredited programs by the Gordon Institute of TAFE. From 1 January 1996 the operations of Gotec Limited were transferred to the Gordon Institute of TAFE.

Gotec Limited has no employees.



NOTE 2



2.02




2.04 Events after reporting date

2.05 Goods and Services Tax (GST)

2.06 Income from transactions

Interest

The annual financial statements represent the audited general purpose financial statements for Gotec Ltd.


The following is a summary of the material accounting policies adopted by the Company in the preparation of the financial report. The accounting policies have been consistently applied unless otherwise stated.


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

Gotec Limited is a company limited by guarantee. The controlling entity of Gotec Limited is The Gordon Institute of TAFE. The financial statements cover Gotec Limited as an individual reporting entity.

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

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


Basis of accounting preparation and measurementThese financial statements are presented in Australian dollars, the functional and presentation currency of the Company, and have been prepared in accordance with the historical cost convention. Historical cost is based on the fair values of the consideration given in exchange for assets.


The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision. There have been no critical judgements made by management in the application of AASs that have had a significant effect on the financial statements.

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

Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority are presented as operating cash flow.

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

Income is recognised to the extent that it is probable that the economic benefits will flow to the Company and the income can be reliably measured at fair value. Amounts disclosed as income are, where applicable, net of returns, allowances and duties and taxes. Revenue is recognised for each of the Company’s major activities as follows:

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

FIN 65


NOTE 2


2.07 Financial instruments

Categories of non‑derivative financial instrumentsLoans and receivables

Available-for-sale financial assets

Held-to-maturity financial assets

Financial assets and liabilities at fair value through profit and loss

Financial liabilities at amortised cost

Offsetting financial instruments

Reclassification of financial instruments

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

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

Loans and receivables category includes cash and deposits (refer to Note 2.08), term deposits with maturity greater than three months, trade receivables, loans and other receivables, but not statutory receivables.

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

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

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

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

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

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

Financial instrument assets and liabilities are offset and the net amount presented in the consolidated balance sheet when, and only when, the Company has a legal right to offset the amounts and intend either to settle on a net basis or to realise the asset and settle the liability simultaneously.

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

Fair value is determined in the manner described in Note 9 Financial instruments .

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

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

The Company makes limited use of this classification because any sale or reclassification of more than an insignificant amount of held-to-maturity investments not close to their maturity, would result in the whole category being reclassified as available-for-sale. The Company would also be prevented from classifying investment securities as held-to-maturity for the current and the following two financial years.

The held-to-maturity category includes certain term deposits and debt securities for which the Company intends to hold to maturity.

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

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

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



NOTE 2


2.08 Financial assetsCash and deposits

2.09 Liabilities Payables

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

Provisions

Borrowings


2.10 Commitments



2.13



Cash and deposits, including cash equivalents, comprise cash on hand and cash at bank, deposits at call and those highly liquid investments with an original maturity of three months or less, which are held for the purpose of meeting short term cash commitments rather than for investment purposes, and which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

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

Payables consist of: • contractual payables, such as accounts payable, and unearned income including deferred income from concession arrangements. Accounts payable represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid, and arise when the Company becomes obliged to make future payments in respect of the purchase of those goods and services; and

Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract.

Provisions are recognised when the Company has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows.

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

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



Gotec Limited is a not-for-profit company limited by guarantee and has no shareholders. As a result, it has no share capital in the equity section of the Balance Sheet, only accumulated surplus/deficits.



Derecognition of financial liabilitiesA financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

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


Amounts in the financial report have been rounded to the nearest dollar.


FIN 67


NOTE 2




• AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010). • AASB 2014-2 Amendments to AASB 1053– Transition to and betweenTiers, and related Tier 2Disclosure Requirements.• 2014-1C• 2014-1B• 2014-1A• 2014-4• 2014-7







As at 31 December 2014 the following standards and interpretations (applicable to the Company) had been issued but were not mandatory for financial year ending 31 December 2014. The Company has not, and does not intend to, adopt these standards early.



NOTE 3

Income from transactions

2014 20133 Income from transactions $ $

InterestInterest on bank deposits 438 435

Net interest income 438 435


NOTE 4


2014 20134 Expenses from transactions $ $

Other operating expensesGeneral expenses

Bank Fees 156 156 Total other operating expenses 156 156

FIN 69


NOTE 4


2014 20134 Expenses from transactions $ $

Other operating expensesGeneral expenses

Bank Fees 156 156 Total other operating expenses 156 156



NOTE 5

Payables

2014 20135 Payables $ $

CurrentContractual

Loan - Gordon Institute of TAFE1 41,345 41,345 Total payables 41,345 41,345

Notes1

(a) Maturity analysis of contractual payablesPlease refer to Note 9(iii) for the maturity analysis of contractual payables.

(b) Nature and extent of risk arising from contractual payablesPlease refer to Note 9(iii) for the nature and extent of risks arising from contractual payables.

Gotec Limited has a non contractual loan from the Gordon Institute of TAFE. This loan is at call and is non-interest bearing. The loan will not be called subject to Gotec Limited having sufficient funds to meet its short term debts.

FIN 71


NOTE 6

Cash flow information

2014 20136 Cash flow information $ $

(a) Reconciliation of cash and cash equivalents

Total cash and deposits disclosed in the balance sheet1 43,945 43,663 Bank overdraft - - Discontinued operations - - Balance as per cash flow statement 43,945 43,663

Notes: 1

2014 2013(b) Reconciliation of net result for the period $ $

Net result for the year 282 279

Movements in operating assets and liabilitiesDecrease / (increase) in other assets - - Increase / (decrease) in payables - -

Net cash flows from/(used in) operating activities 282 279

Gotec does not hold a large cash reserve in its bank accounts. Cash received from the generation of income is paid into the bank account as with any expenditure which is made via the bank account.



NOTE 7


There are no commitments as at 31 December 2014 (2013: nil).

FIN 73


NOTE 8

Contingent assets and contingent liabilities

There were no contingent assets or contingent liabilities at balance date.



Note 9

Financial Instruments


2014 2013Carrying amount of financial instruments by category Note $ $

(a) Financial assets designated at fair value through profit or loss:Cash and deposits 6 (a) 43,945 43,663 Total financial assets designated at fair value through profit or loss 43,945 43,663

Total financial assets 43,945 43,663

(b) Financial liabilities at amortised cost:Payables:

Payables 5 41,345 41,345 Total financial liabilities at amortised cost 41,345 41,345

Total financial liabilities 41,345 41,345

2014 2013Net holding gain/(loss) on financial instruments by category Note $ $

(a) Interest Income/(expense)Financial assets - cash and cash equivalents 3 438 435 Interest income/(expense) - financial assets 438 435

Total interest income/(expense) 438 435

Gotec Limited's principal financial instruments comprise cash assets, term deposits, receivables and payables.


The Company's main exposure to financial risks are interest rate risk and liquidity risk.



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

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

The net holding gains or losses are determined as follows:• for cash and cash equivalents, the net gain or loss is calculated by taking the movement in the fair value of the asset, the interest income, minus any impairment recognised in the net result;

FIN 75


Note 9

Financial Instruments


2014 2013Carrying amount of financial instruments by category Note $ $

(a) Financial assets designated at fair value through profit or loss:Cash and deposits 6 (a) 43,945 43,663 Total financial assets designated at fair value through profit or loss 43,945 43,663

Total financial assets 43,945 43,663

(b) Financial liabilities at amortised cost:Payables:

Payables 5 41,345 41,345 Total financial liabilities at amortised cost 41,345 41,345

Total financial liabilities 41,345 41,345

2014 2013Net holding gain/(loss) on financial instruments by category Note $ $

(a) Interest Income/(expense)Financial assets - cash and cash equivalents 3 438 435 Interest income/(expense) - financial assets 438 435

Total interest income/(expense) 438 435

Gotec Limited's principal financial instruments comprise cash assets, term deposits, receivables and payables.


The Company's main exposure to financial risks are interest rate risk and liquidity risk.



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

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

The net holding gains or losses are determined as follows:• for cash and cash equivalents, the net gain or loss is calculated by taking the movement in the fair value of the asset, the interest income, minus any impairment recognised in the net result;


Note 9

Financial Instruments (continued)

(ii) Credit risk

Credit quality of contractual financial assets that are neither past due nor impaired 1

Financial institutions

(AAA rating)

Government agencies (AAA

rating)

Other counter-party

Total

$ $ $ $43,945 - - 43,945

Total contractual financial assets 2014 43,945 - - 43,945

43,663 - - 43,663 Total contractual financial assets 2013 43,663 - - 43,663

Note1

Ageing analysis of financial assets

Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years

$ $ $ $ $ $ $

Investment and other financial assets:Cash on deposit 43,945 43,945 -

Total 2014 financial assets 43,945 43,945 - - - - -

Investment and other financial assets:Cash on deposit 43,663 43,663 -

Total 2013 financial assets 43,663 43,663 - - - - - Note

1

Credit risk arises from the contractual financial assets of the Company which comprise cash and deposits. The Company’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the Company.

Credit risk is measured at fair value and is monitored on a regular basis by the finance committee. The finance committee monitors credit risk by actively assessing the rating quality and liquidity of counterparties:

• all potential customers are rated for credit worthiness taking into account their size, market position and financial standing; and• customers that do not meet the Company’s strict credit policies may only purchase in cash or using recognised credit cards.

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

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

Provision of impairment for contractual financial assets is recognised when there is objective evidence that the Company will not be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings.

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

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

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



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




There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated.

The following table discloses the ageing analysis for the Company's financial assets.

Carrying amount

Not past due and not

impaired

Past due but not impairedImpaired financial

assets



Note 9




Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years

5+ years

$ $ $ $ $ $ $

Payables1:Other payables 41,345 41,345 - - - - 41,345

Total 2014 financial liabilities - - - - - - -


Total 2013 financial liabilities - - - - - - - Note

1

Liquidity risk is the risk that the Company would be unable to meet its financial obligations as and when they fall due.

Gotec's maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet and the amounts related to financial guarantees disclosed in Note 5.

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

The carrying amount detailed in the following table of contractual financial liabilities recorded in the financial statements represents the Company's maximum exposure to liquidity risk.

The following table discloses the contractual maturity analysis for the Company's financial liabilities.

Carrying amount

Nominal amount

Maturity dates




FIN 77


Note 9


(iv) Market risk

Foreign currency risk

Interest rate risk

Financial instrument composition and interest rate exposure

Consolidated


Fixed interest rate


% $'000 $'000 $'000 $'000Financial assetsCash and deposits 1.00% 43,945 43,945 - - Total financial assets 43,945 43,945 - -


Other payables 0.00% 41,345 - - 41,345 Total financial liabilities 41,345 - - 41,345

Consolidated


Fixed interest rate


% $'000 $'000 $'000 $'000Financial assetsCash and deposits 1.00% 43,663 43,663 Total financial assets 43,663 43,663 - -


Other payables 0.00% 41,345 41,345 Total financial liabilities 41,345 - - 41,345

Note1

Equity price risk

The Company in its daily operations is exposed to a number of market risks. Market risks relate to the risk that market rates and prices will change and that this will have an adverse affect on the operating result and/or net worth of the Company. e.g. an adverse movement in interest rates or foreign currency exchange rates.

The Company’s exposures to market risk is primarily through interest rate risk. Objectives, policies and processes used to manage each of these risks are disclosed below.

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

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

Interest rate movements have not been sufficiently significant during the year to have an impact on the Company's year end result.

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

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

Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market interest rates. The Company does not hold any interest bearing financial instruments that are measured at fair value, and therefore has no exposure to fair value interest rate risk.

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company has minimal exposure to cash flow interest rate risk through its cash and deposits that are at floating rate.

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

The Company's exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities are set out in the financial instrument composition and maturity analysis table below.

Weighted average

effective rate


Balance Sheet


2014

Weighted average

effective rate


Balance Sheet


2013


The Company has no exposure to equity price risk.


Note 9




Less than 1 month

1‑3 months

3 months – 1 year

1‑5 years

5+ years

$ $ $ $ $ $ $


Total 2014 financial liabilities - - - - - - -


Total 2013 financial liabilities - - - - - - - Note

1

Liquidity risk is the risk that the Company would be unable to meet its financial obligations as and when they fall due.

Gotec's maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet and the amounts related to financial guarantees disclosed in Note 5.

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

The carrying amount detailed in the following table of contractual financial liabilities recorded in the financial statements represents the Company's maximum exposure to liquidity risk.

The following table discloses the contractual maturity analysis for the Company's financial liabilities.

Carrying amount

Nominal amount

Maturity dates






Note 9



Consolidated Result Equity Result Equity31 December 2014 $'000 $'000 $'000 $'000 $'000Contractual financial assetsCash and deposits 43,945 (220) (220) 220 220 Total increase/(decrease) in financial assets 43,945 (220) (220) 220 220

Contractual financial liabilitiesPayables 1 41,345 - - - - Total increase/(decrease) in financial liabilities 41,345 - - - - Total increase/ (decrease) (220) (220) 220 220

Consolidated Result Equity Result Equity31 December 2013 $'000 $'000 $'000 $'000 $'000Contractual financial assetsCash and cash equivalents 43,663 (218) (218) 218 218 Total increase/(decrease) in financial assets 43,663 (218) (218) 218 218


Note1

(v) Funding risk

The following tables show the impact on the Company’s net result and equity for each category of financial instrument held by the Company at the end of the reporting period as presented to key management personnel, if the above movements were to occur.

The Company’s sensitivity to market risk is determined based on the observed range of actual historical data for the preceding five year period, with all variables other than the primary risk variable held constant. The Company’s fund managers cannot be expected to predict movements in market rates and prices. Sensitivity analyses shown are for illustrative purposes only. The following movements are ‘reasonably possible’ over the next 12 months:


f 15 d d (2013 ) f h ASX 200 i d

Carrying amount




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

Carrying amount


FIN 79


Note 9



Consolidated Result Equity Result Equity31 December 2014 $'000 $'000 $'000 $'000 $'000Contractual financial assetsCash and deposits 43,945 (220) (220) 220 220 Total increase/(decrease) in financial assets 43,945 (220) (220) 220 220


Consolidated Result Equity Result Equity31 December 2013 $'000 $'000 $'000 $'000 $'000Contractual financial assetsCash and cash equivalents 43,663 (218) (218) 218 218 Total increase/(decrease) in financial assets 43,663 (218) (218) 218 218


Note1

(v) Funding risk

The following tables show the impact on the Company’s net result and equity for each category of financial instrument held by the Company at the end of the reporting period as presented to key management personnel, if the above movements were to occur.

The Company’s sensitivity to market risk is determined based on the observed range of actual historical data for the preceding five year period, with all variables other than the primary risk variable held constant. The Company’s fund managers cannot be expected to predict movements in market rates and prices. Sensitivity analyses shown are for illustrative purposes only. The following movements are ‘reasonably possible’ over the next 12 months:


f 15 d d (2013 ) f h ASX 200 i d

Carrying amount




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

Carrying amount



Note 9


(vi) Fair value estimation

Carrying Amount

Net Fair Value

Carrying Amount

Net Fair Value

$ $ $ $Financial assetsCash and deposits 43,944 43,944 43,663 43,663 Total financial assets 43,944 43,944 43,663 43,663

Financial liabilitiesPayables:

Other payables 41,345 41,345 41,345 41,345 Total financial liabilities 41,345 41,345 41,345 41,345

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

Gotec considers that the carrying amount of trade receivables and payables is a reasonable approximation of their fair values due to the short-term nature of trade receivables and payables.

Due to the short-term nature of the current receivables, their carrying value is assumed to approximate their fair value, and based on credit history it is expected that the receivables that are neither past due nor impaired will be received when due.

For other assets and other liabilities the fair value approximates their carrying value. Financial assets where the carrying amount exceeds fair values have not been written down as the Company intends to hold these assets to maturity.

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

2014 2013

Gotec did not have any financial instruments that are measured subsequent to initial recognition at fair value as at 31 December 2014.



Note 10


(i) MinisterThe relevant Minister was The Hon. Peter Hall, MLC, Minister for Higher Education and Skills until his retirement from parliament on 17 March 2014.



(ii) Executive OfficerThe directors did not receive any remuneration from the company in 2014 (2013:Nil).

(iii) Ultimate Parent EntityThe ultimate parent entity is Gordon Institute of TAFE.



FIN 81


Note 10


(i) MinisterThe relevant Minister was The Hon. Peter Hall, MLC, Minister for Higher Education and Skills until his retirement from parliament on 17 March 2014.



(ii) Executive OfficerThe directors did not receive any remuneration from the company in 2014 (2013:Nil).

(iii) Ultimate Parent EntityThe ultimate parent entity is Gordon Institute of TAFE.




NOTE 11

Related parties

Outstanding balancesThe following balances are outstanding at the reporting date in relation to transactions with related parties:

2014 201311 Related parties $ $

Current payables (loans)Parent entity 41,345 41,345 Total Current payables 41,345 41,345



NOTE 12

Subsequent events

No matters or circumstances have arisen since the end of the reporting period which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.


NOTE 12

Subsequent events

No matters or circumstances have arisen since the end of the reporting period which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.

The Annual Report 2014

© The Gordon 2015

Published by:

The GordonPrivate Bag 1Geelong Mail CentreVictoria, Australia 3221

ABN: 27 241 053 246TOID: 3044 CRICOS No: 00011G

Annual Report enquiries:Ph: (03) 5225 0631Email: [email protected]

The Gordon Annual Report 2014 and the previous year’s report are available online at thegordon.edu.au

Printed March 2015Printed with the support of K.W.Doggett Fine Paper

on Impact - 100% recycled, carbon neutral.

The Go

rdo

n Annual R

epo

rt 2014

Geelong City Campus

2 Fenwick St, Geelong Victoria, Australia 3220

East Geelong Campus

Boundary Road, East Geelong Victoria, Australia 3219

Colac Campus

Colac Trade Training Centre Queen St, Colac Victoria, Australia 3250

Werribee Learning Centre

9 Bridge St, Werribee

Victoria, Australia 3030

Contact Us

Ph: (03) 5225 0600 Email: [email protected]

Mail: Private Bag 1, Geelong Mail Centre Victoria, Australia 3221

thegordon.edu.au

Annual Report 2014

annual report 2014 - parliament of victoria...the gordon annual report 2014 dear minister it is with...

Documents