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DRIVER EDUCATION CENTRE OF AUSTRLIA LTD ANNUAL REPORT 2015

II

Registered office Driver Education Centre of Australia Limited (Incorporated in Victoria) ABN 98 006 347 397 87 McKoy Street, West Wodonga Vic 3690PO Box 963, Wodonga Vic 3689 Telephone 1300 365 400 Email [email protected] Web www.deca.com.au

March 2016

Also published at www.wodongatafe.edu.au

This publication is copyright.

No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968.

2453_DECA_MARCH 2016

DRIVER EDUCATION CENTRE OF AUSTRALIA LTD ANNUAL REPORT 2015 III

It is with great pleasure that we submit the Annual Report 2015 of Driver Education Centre of Australia (DECA).

We would like to acknowledge the time and support provided by the DECA Board Directors, and the efforts of the Executive Team, including Les Burr, Donna Guille and Bryan Blake, whose sound leadership and dedication saw DECA navigate through a challenging period.

DECA’s financial position decreased to $11.8 million in net assets in 2015, from a high of $13.2 million in 2014, due to pressure on operations and a resultant deficit. The driver training market became even more competitive in 2015 with very low margin delivery. Compounded by a decreasing demand for training, the year was a challenging one for the DECA business.

Although expenditure did decrease as cost cutting measures were put in place, delivery revenue dropped by 24% to $10.3 million. Delivery under the Victorian Training Guarantee was $1.8 million, a decrease of $2.5 million from 2014. Fee for service delivery fell by $0.8 million, a result of heavy competition and decreasing market share. The working capital ratio fell to 2.34:1 per performance report, but the Government benchmark of 1:1 was still achieved.

Business challenges meant that financial management was a key focus in 2015. Significant resources were also invested into a restructure and the establishment of a new business model for DECA to operate under, as we move into 2016 and beyond.

Paramount in bringing DECA into a more viable financial position was a consolidation of operations, moving away from the licence to drive market, and enhancing the business’ activities in the corporate ‘professional’ driver training category. Industry leading professional driver training programs including Pro-Driver and rollover prevention and stability training will be central to new DECA operations. In conjunction with this, DECA will continue to support successful major contracts with the Australian Defence Force.

DECA acknowledges and thanks all the many industry and business partners that have invested in our training throughout the year. We look forward to continuing to engage with these important partners.We would like to acknowledge and thank The Hon. Steven Herbert and Higher Education and Skills Group for their significant support and guidance as we work collaboratively to improve the ongoing sustainability of DECA.

Finally, it is important to note the loyal support of all DECA staff who have remained committed to quality training and the DECA business, during this time of change and declining business opportunities. Although a difficult year, we believe positive opportunities lie ahead for DECA, as it transforms into its new business model. DECA staff remain incredibly passionate and dedicated people, and with their support we look forward to seeing the DECA name continue to be synonymous with leading corporate ‘post licence’ driver training solutions.

Ulf Ericson Mark Dixon Board Chair Chief Executive OfficerWodonga Institute of TAFE Wodonga Institute of TAFE 15 March 2016 15 March 2016

MESSAGE FROM BOARD CHAIRPERSON AND CEO

DRIVER EDUCATION CENTRE OF AUSTRALIA LTD ANNUAL REPORT 2015 V

CONTENTSMessage from Board Chair and CEO......................................................................................................iii

About us ...................................................................................................................................1

Our vision ..............................................................................................................................................3

Our goals ...............................................................................................................................................3

Our guiding principles ............................................................................................................................4

Our learning and teaching goals ..............................................................................................................4

Strategic directions and key achievements ............................................................................5

1 Learners .............................................................................................................................................6

2 Industry ..............................................................................................................................................6

3 Community ........................................................................................................................................6

4 Our Institute .......................................................................................................................................7

Resources .................................................................................................................................9

Human resources ................................................................................................................................10

Year in review ........................................................................................................................15

Summary of performance .....................................................................................................................16

Governance ............................................................................................................................17

DECA board ........................................................................................................................................18

Board directors ....................................................................................................................................19

Organisational structure ........................................................................................................................24

Executive team ....................................................................................................................................25

Compliance ............................................................................................................................27

Financial report .....................................................................................................................31

Contents..............................................................................................................................................33

Performance statement ........................................................................................................................37

Financial statements ..............................................................................................................................42

Notes to the financial statements ..........................................................................................................45

Disclosure index ..................................................................................................................................89

ABOUT US

DRIVER EDUCATION CENTRE OF AUSTRALIA LTD ANNUAL REPORT 2015 3

Driver Education Centre of Australia (DECA) is Australia’s leading driver education training provider. A business unit of Wodonga Institute of TAFE, DECA delivers licence programs and qualifications for people operating or wanting to operate heavy vehicles, cars, and motorcycles.

Established in 1979, DECA was initially registered on 8 November 1984 as Goulburn Valley Driver Training Complex Limited, a company under the Corporations Act 2001 in Victoria. On 1 September 1993 the company changed its name to Driver Education Centre of Australia Limited (DECA) and is a public company, limited by guarantee. The Corporations Act is administered by Australian Investments and Security Commission (ASIC). There are no shares listed and under the Constitution,

DECA is administered by the Minster for Training and Skills, The Hon. Steven Herbert. DECA is part of Wodonga Institute of TAFE.

With permanent branches in six locations in Victoria, as well as branches in NSW and Tasmania, DECA continues to be the transport training provider of choice to businesses large and small, including the Australian Defence Force.

Powers and duties of the institute are referenced in the DECA Constitution and Corporations Act.

OUR VISION

Our vision is for DECA to be:

‘Australia’s centre of training excellence and innovation in road transport’

OUR GOALS

We:

• are an organisation with which learners, industry, community, and staff are proud to be associated [ connected people

• continuously improve the way we produce and deliver products and services, and continuously adapt to changing industry and learner needs [ reputable products and services

• have a strong quality focus on learning and outcomes for clients [ our success as an organisation

• are an organisation whose success comes from being linked with and meeting the needs of industry and the community [ our competitive advantage

ABOUT US

4

OUR GUIDING PRINCIPLES

We:

• lead with passion and commitment to actively promote, support, and implement our vision

• are responsive and accessible to our communities, customers, learners, and staff, seeking and acting on their feedback to improve performance

• show respect in our interactions, with an inclusive attitude towards diversity and difference

• act with integrity, treating all with honesty, fairness, and discretion

• are accountable, with open and transparent decision making and performance of duties

• act responsibly and sustainably towards our biophysical, social, and economic environments

• recognise and value our staff, supporting them to pursue excellence, innovation, and continuous improvement

• share knowledge and opportunities through collaboration, teamwork, and partnerships with those committed to our vision

OUR LEARNING AND TEACHING GOALS

Our educational strategies, ethos, and values drive delivery of the highest quality to develop our learners’ knowledge and understanding in their chosen fields and vocations.

Our fundamental goals are to encourage learners and teachers to:

• be innovative in their practice

• inspire and enable lifelong learning

• become adaptive and reflective practitioners.

ABOUT US

STRATEGIC DIRECTIONS AND

KEY ACHIEVEMENTS

6

The DECA Strategic Plan, as part of the Wodonga TAFE Strategic Plan, defines four strategic directions. Each strategic direction is underpinned by a set of key objectives that inform corporate and subsequent departmental planning. The following provides an overview of the successes in meeting these strategic directions.

1. LEARNERS

Provide quality teaching in a flexible, supportive, and responsive learning environment that enables learners to achieve their work, career, and personal development goals.

Help all learners to successfully develop the skills they need to enter or re-enter productive employment, maintain the currency of their skills, and build their careers through further learning.

In 2015, DECA delivered training to over 9,500 students, equating to over 470,000 student contact hours. Of those students over 7,000 participated in DECA short courses. DECA maintained its licensing market share across the 2015 year.

2. INDUSTRY

Support industry development and sustainability through collaboration with enterprises about skills formation and recognition.

Promote a training culture with our industry partners by actively engaging with employers to increase the effectiveness and relevance of workforce development programs that build business sustainability.

DECA continued to support the Australian Army at Puckapunyal with delivery expanding in line with an increased demand for training programs associated with new vehicles coming into service. Work with the Defence Force also included supporting the Navy with training in ports across Australia.

In late 2015, DECA piloted new post license programs that address the stated needs of Australia’s road transport industry (safety and efficiency) and the broader corporate light vehicle driver market. Initial results were extremely encouraging and those programs continue to build momentum with significant interest and commitment from large road transport operations.

3. COMMUNITY

Strengthen regional economic and community development, sustainability, and inclusiveness.

Contribute to the effective development of regional communities by increasing participation in education and training that meets local needs, promotes inclusiveness, and supports community capacity building.

As part of the Wodonga TAFE business, DECA played an important role in the Institute’s overall contribution to community. The Institute as a whole participated in over 100 community focused initiatives and activities in the past 18 months.

STRATEGIC DIRECTIONS AND KEY ACHIEVEMENTS


4. OUR INSTITUTE

Build organisational capability to secure our future and thrive in a rapidly- changing environment.

Be proactive, agile, and responsive to our stakeholders and continuously improve the quality of our products and services to enhance our capability, performance, and reputation, nationally and internationally.

In 2015, DECA began the implementation of a new business model that will transform DECA’s operation significantly. Analysis of the licence to drive market and responding to a commissioned review on the future of the DECA business, the leadership team invested in new programs and a transformation of DECA’s operation.

The new structure and direction of DECA will see the business move away from the licence to drive market, and focus on post licence, corporate fleet, driver training in both the heavy vehicle and light vehicle categories. With flagship programs including DECA’s Roll-over Prevention & Stability program and Pro-Driver program, DECA will position itself as Australia’s leading corporate driver training provider, delivering nationally and internationally.

DECA’s new outlook will focus on heightening the professionalism of vehicle operators across the corporate sector, directly tying driver training to positive industry safety and efficiency outcomes. DECA will commission academic research to be conducted on training outcomes. A critical aspect to validating the benefits of driver training to industry and the community.

DECA will continue to focus on maintaining and growing relationships with key clients, including AAMI, the Australian Defence Force, Elders and Unilever.

STRUCTURE

The following is an overview of the areas of training delivered by DECA.

Category Type

Heavy vehicle licensing Light rigidMedium rigidHeavy rigidHeavy combinationMulti-combination

Heavy vehicle safety DefensiveRollover prevention and stability

Car Defensive

Four wheel-drive Advanced 4WD training

Motorcycle Defensive Introductory programsLearner permitLicence

Other Car driving instructionFatigue management

STRATEGIC DIRECTIONS AND KEY ACHIEVEMENTS

RESOURCES

10

ENVIRONMENTAL PERFORMANCE

DECA is committed to environmental performance improvement, and to meeting government targets for environmental performance.

The design of DECA’s building at Altona North incorporates several environmentally sustainable design (ESD) features such as sunshades, rainwater collection, occupancy sensing and dimming, and energy efficient light fittings.

Across the DECA owned sites in Brooklyn, Shepparton and Newborough, electricity usage remained consistent from 2014 to 2015. Several DECA sites utilise rainwater for various uses (irrigation, training skid pans etc) to minimise processed water usage. There was an increase in water usage in 2015 compared to 2014. DECA produced approximately 200 tonnes of greenhouse gases in 2015. In 2015 DECA began measuring the distances vehicles travelled across the fleet with the year’s total equating to 132,740 km.

It is a requirement that our service providers have an existing, or have commenced, an Environmental Management System (EMS) in accordance with ISO 14001.

HUMAN RESOURCES

Industrial relations

Wodonga Institute of TAFE (including DECA) joined other Victorian TAFEs in pursuing a multi-enterprise agreement which ceased negotiations for a Wodonga TAFE specific teacher’s agreement. The Victorian TAFE Teaching Staff Multi-Enterprise Agreement 2015 was given interim approval by the Fair Work Commission on 23 November 2015. A boundary dispute between the Australian Education Union (AEU) and the National Tertiary Education Union (NTEU) has been submitted to the Fair Work Commission (FWC) for a hearing to establish whether the NTEU may be a signatory to the agreement. The outcome of the hearing is expected in early 2016.

Implementation of the Wodonga Institute of TAFE PACCT Staff Enterprise Agreement 2014 occurred across 2015. The Agreement will nominally expire on 31 December 2017.

Negotiations for a DECA Enterprise Agreement have been conducted since April 2015. Two Consultative Committees exist within the Institute: Institute Consultative Committee; and Workplace Consultative Committee. Regular meetings for both Committees were held during 2015 where management and elected staff representatives discussed matters relating to the implementation of the relevant Enterprise Agreements and other related staffing matters such as restructuring.

The Institute applies the employment and conduct principles of the Victorian Public Sector in addition to its own principles. Staff have been correctly classified in the workforce data collections for the current and previous periods.

There was no industrial action undertaken by staff during 2015.

Health and wellbeing

During 2015, the health and wellbeing strategy and program continued and featured the following outcomes.

Cyclical Wellbeing programs:

• Flu immunisations

• Continuation of the Employee Assistance Program (EAP)

• Ride to work day

• Monthly health promotion newsletters

• Premier’s Active April

• RUOK Day

• 10000 steps challenge

RESOURCES


WHS during recruitment processes

• Pre-employment medicals continued for specified positions

WHS systems and procedures

• WHS audits conducted at all sites

• Chemical Audits conducted and a review of the Chemwatch system is currently in progress

• Targeted risk assessments occurred on areas of risk or repeated accident

WHS training

• Critical incident Warden Training completed for Wodonga TAFE

• First aid training

• WHS five day Safety reps course and refreshers

• Office ergonomics training

OHS management and workers compensation

A total of three (3) WorkCover claims were received in 2015 and a total of five (5) lost time injuries. The incidence rate for Workcover leave is 0.59 incidences per 100 workers/annum. The Lost Time Injury Frequency Rate (LTIFR) for 2015 was 7.23 which is used to measure the number of occurrences of injury/disease for each one million work hours worked by staff.

No. of claims Cost ($ 000’s) Average cost ($ 000’s)

2015 3 $ 40 $ 13

2014 5 $ 40 $ 82013 6 $ 372 $ 62TOTAL 14 $ 452 $ 32

The number of workplace incident reports received across all operations of Wodonga Institute of TAFE are as follows:

32 - Staff115 - Students4 - Other (contractors, visitors and public)

From these incident reports, eight (8) were notifiable incidents and were reported to WorkSafe. One of the incidents resulted in an improvement notice being issued in relation to formalising all training documentation for staff. This improvement notice was finalised with Worksafe in May 2015.

Health and Safety Working Party (Committee)

The Health and Safety Working party continued to meet regularly over 2015 to oversee health and safety issues at Wodonga TAFE. Incident and hazard report information is monitored for all Wodonga TAFE and DECA sites and is monitored by the committee. Elected health and safety representatives participate in the WHS processes through the raising of issues at the meetings, the circulation of materials before and after meetings and assisting in implementing resolutions.

RESOURCES

12

Employment Profile 2015 (including DECA)

Average EFT2012 2013 2014 2015

Ongoing 90.65 108.41 108.07 103.03Contract 37.00 38.91 45.12 51.20Sessional 15.40 38.71 42.84 38.72Other (non-teaching) 150.09 161.63 164.14 156.38TOTAL 293.13 347.66 360.16 349.33

Average2012 2013 2014 2015

Female (count) 262.25 266.58 269 263.50Female (EFT) 174.89 183.49 189.19 185.79Male (count) 143.75 238.42 253 243.17Male (EFT) 117.99 164.18 170.97 163.54Total (count) 406 505 522 506.67Total (EFT) 292.88 347.66 360.16 349.33Indigenous (count -average) 1.75 4.92 5.5 7.83Indigenous (EFT average) 1.12 2.48 3.16 4.35Disability background (count average) 33.25 35.42 34.92 26.58

Disability background (EFT average) 15.57 20.66 19.97 15.25

Average Age (count)2013 2014 2015

Under 21 years 8.08 6.58 7.2521-25 years 12.25 11.58 11.7526-35 years 69.33 67.67 68.4236-45 years 131.33 137.92 123.9245-55 years 151.75 162.17 160.8356-65 years 119.67 121.75 119.92Over 65 years 12.58 14.58 14.58TOTAL 505 522.25 506.67

RESOURCES


Staff classifications2013 2014 2015

Ongoing Fixed Term/Casual



2015 onwards*

AO2 PACCT Worker Level 1 0 4 0 7 0 22








AO10 6 0 7 0 - -

TO2 1 0 1 0 - -

TO3 1 0 1 0 - -

TO6 0 0 0 2 - -

LO2 2 0 2 0 - -

LO3 1 0 1 0 - -

LO4 1 0 0 0 - -

LO5 1 0 1 0 - -

CO3 5 0 5 0 - -

CO4 2 0 2 0 - -

CO5 2 0 2 0 - -

CO6 2 0 2 0 - -

CSO3 1 0 1 0 - -

TEACHER 1 0 3 0 0 0 4

TEACHER 2 20 14 20 19 15 18

TEACHER 3 14 4 4 1 4 1

TEACHER 4 9 4 10 4 12 2

TEACHER 5 31 13 35 16 34 17

SE1 9 3 10 0 12 4

SE2 10 2 11 0 10 18

SE3 4 0 4 0 4 1

Casual T4 0 57 0 61 0 155

Casual T5 0 7 0 8 0 11

Higher Ed 0 3 0 3 0 3

DA1 0 0 0 1 0 1

DA1B 7 12 9 11 0 0

DA 3 0 0 1 0 0 0

TRAINER 1 0 4 0 6 0 2

TRAINER 2 17 14 14 16 6 12

TRAINER 3 1 4 1 2 2 8

TRAINER 4 2 1 3 1 8 1

Motorcycle 0 22 0 24 0 33

ALTC 0 10 0 12 0 22

AAMI Trainer 0 30 0 28 0 38

AAMI Day Leader 0 16 0 17 0 19

Other 7 15 6 14 11 39

Executive 0 5 0 4 0 4

*A new classification structure was introduced for PACCT staff to replace AO, TO, LO, CO and CSO levels and rename to PACCT Worker Level 1 - 8.

RESOURCES

YEAR IN REVIEW

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SUMMARY OF PERFORMANCE

The financial information in this report of operations is consistent with the information provided in the financial statements.

The entity’s comprehensive result for the year ending 31 December 2015 was a deficit of $1,403,000 (2014: $134,000 surplus). This result is a down turn of $1,537,000 from 2014 due to declining market share and increasing competitiveness in the Learn to Drive market, along with reduced access to VTG funding for short courses and a reduction in rates.

The deficit from operations in 2015 was $884,000 (2014: $760,000 surplus). Delivery revenues decreased by 24% ($3,371,000), mainly in VTG funding, whilst expenditure was only able to be reduced by 13% ($1,717,000). Delivery processes continued to be streamlined, and made more efficient however competition in the licensing market has led to lower margin pricing.

DECA’s overall financial position has also weakened as a result of poor operations and now has net assets of $11.8m (2014: $13.2m) and the working capital has decreased to 2.34:1 per performance report.

Summary of Performance - 5 years

Comparative Results 2011-2015

2015 2014 2013 2012 2011 $’000 $'000 $'000 $'000 $'000Operating revenue 10,429 13,790 12,503 11,388 11,900Expenditure 11,313 13,030 11,682 12,481 12,643Operating Result - EBITDA (884) 760 821 (1,093) (743)Adjustment items:Capital Grants 0 - 311 148 465Gains/(Losses) on disposal of assets 40 - 3 88 76Depreciation and Amortisation (559) (626) (739) (841) (817)Movement in LSL Factor 0 - - (42) (46)Movement in Provision for Doubtful Debts 0 - - 5 11Net result prior to Consolidation & Govt Contribution

(519) (626) (424) (1,735) (1,054)

Gain on Consolidation 0 - - 390 -Government Contribution 0 - - 1,006 925Net result (1,403) 134 397 (339) (129) Total Assets 14,388 15,667 15,947 16,744 15,050Members Funds 11,750 13,153 13,020 12,622 11,044

YEAR IN REVIEW

GOVERNANCE

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DECA BOARD

The Board is entrusted with the governance of DECA on behalf of the State of Victoria. The primary role of the Board is to provide authoritative, broad-based, strategic advice to the Chief Executive Officer, which places DECA in the most advantageous position regarding trends in local, national, and international training. Board directors are drawn from business, industry, and the communities that are served by DECA.

Honouring its values, the DECA Board leads with passion to implement DECA’s vision, is responsive to the communities it serves and acts on feedback to improve performance, has an inclusive attitude towards diversity, acts with integrity, is accountable, acts responsibly and sustainably, recognises and values the staff of DECA, and shares knowledge and opportunities appropriately.

GOVERNANCE

Chair - Ministerial appointee

Deputy Chair - Ministerial appointee

Director - Ministerial appointee

Director - Ministerial appointee

Director - Board appointee




Volunteer Director - Board appointee

Minister for Training and Skills

DECA BoardChief Executive Officer Committees

Finance and Infrastructure Committee

The Finance and Infrastructure Committee is an endorsed committee of the Board of DECA. The purpose of the committee is to advise the Board on the financial and infrastructural implications of the DECA strategic plan. The committee monitors the financial performance of DECA and provides authoritative advice to the Board on the current year and on any future financial and infrastructural plans.

Compliance, Audit and Risk Committee

The Compliance, Audit and Risk Committee is an endorsed committee of the Board of DECA. The purpose of the committee is to assist the Board to exercise due diligence in its responsibilities towards compliance monitoring, risk identification, and management strategy of DECA in accordance with the Financial Management Compliance Framework under the Financial Management Act 1994.

Employment Remuneration and Nomination Committee

The Employment Remuneration Committee is an endorsed committee of the Board of DECA. The purpose of the committee is to assist the Board in the effective and appropriate employment, remuneration, and terms of service of the Chief Executive Officer (CEO).


BOARD DIRECTORS

Ulf Ericson - Board ChairMinisterial appointment 1 June 2014 to 30 June 2016

Employment/DirectorshipsDirector, Hume Bank, Consulting Director, ATS Partners

Qualifications and Professional associationsBarrister of the New South Wales Supreme Court and of the High Court of Australia, Graduate Diploma in Advanced Taxation Law, Diploma of Law (BAB), Degrees in Economics and Commerce, Fellow of the Institute of Chartered Accountants, Member of the Australian Institute of Company Directors, Fellow of the Taxation Institute of Australia

SummaryUlf is a Barrister of the New South Wales Supreme Court and of the High Court of Australia. He is also a Fellow of the Institute of Chartered Accountants, a member of the Australian Institute of Company Directors, and a Fellow of the Taxation Institute of Australia. With his wealth of experience, Ulf specialises in revenue and taxation laws, succession planning, corporate governance, strategic planning, board performance, and internal audit together with risk and quality management.

2015 Committee membershipCompliance, Audit & Risk, Finance and Infrastructure, Remuneration and Nomination

Meetings attended in 2015Ten from a possible eleven meetings Colin Elliott - Deputy Board ChairMinisterial appointment 1 September 2013 to 30 June 2016

Employment/DirectorshipsRegional Manager - GHD Pty Ltd, Regional Development Australia Committee (Hume Region) (resigned 30 June 2015)

Qualifications and Professional associationsMaster of Engineering (Project Management, RMIT 2002), Bachelor of Applied Science (Applied Geology, RMIT 1992), Certificate of Technology (Civil Engineering, TAFE 1986), Graduate, Company Directors Course (AICD 2008)

SummaryColin has worked with consulting engineering company GHD for the past 24 years in the areas of project and contract management, civil engineering, and environmental science. Colin is a scientist and an engineer, and has a passion for all forms of education both as a student and as an administrator. He was previously deputy Chair of the North East Local Learning and Employment Network (NELLEN) and was also an active member of the Catholic Education Wodonga Committee. Colin was a member of the steering group for the recent Higher Education Navigation project, which researched the barriers for attainment of Higher Education.

2015 Professional DevelopmentIn 2015, Colin attended the following:Albury Wodonga Forum on Regional and Rural Higher Education (Latrobe Uni), Hume Regional Development Australia – Regional Planning Retreat, Australian Institute of Company Directors (AICD), Workshop - Insights – How to stay ahead of change, Client Relationship Management – Understanding Client Drivers, Unconscious Bias Workshop, AICD Workshop - Insights behind Brown Brothers 125 year evolution, Client Relationship Management – skill development, Project Management – Work Breakup, Structures, 2 day Workplace H&S Representative Training, Crisis and Emergency Management Training, Media Engagement – What to do when the media calls

2015 Committees MembershipRemuneration & Nomination

Meetings attended in 2015Nine from a possible eleven meetings

GOVERNANCE

20

Jessica Furst - DirectorMinisterial appointment 1 September 2013 to 30 June 2016

Employment/DirectorshipsDirector, Banking Management and Assurance - Australian Taxation Office

Qualifications and Professional associationsBachelor of Business (Accounting), Certified Practicing Accountant

SummaryJessica has had over 21 years’ experience in the fields of accounting and financial management, specialising in business advisory, banking and financial management, and tax consultancy. She has also worked in the property sector specialising in acquisitions of commercial, retail, and industrial property. Jessica’s current role is to carry out financial assurance across the Australian Taxation Office for the purpose of financial and compliance reporting.

Jessica was previously the chair of the Albury Wodonga branch of CPA Australia and was the recipient of the NSW Presidents award.

2015 Professional DevelopmentIn 2015, Jessica attended the following:Emotional Intelligence, Managing Tier 3 Projects, ATO Finance Congress, ATO Finance Executive Conference, CA Audit Conference, Internal Consulting, Managing ill injured & absent employees

2015 Committee membershipFinance and Infrastructure, Compliance, Audit & Risk

Meetings attended in 2015Eleven from a possible eleven meetings

Roger Powell AM - DirectorBoard appointment 1 September 2013 to 30 June 2016

Employment/DirectorshipsExecutive Director - Executive Leadership Australia, Non Executive Director - ELBIT Systems of Australia Pty Ltd

Qualifications and Professional associationsAM, MSc, BA, Grad Dip Strat Studies, GAICD (Member of the Order of Australia recognition for contribution to officer professional development), Bachelor of Arts, University NSW,Master of Science, Florida State University (Outstanding Alumnus for contribution in the fields of education and training), Graduate Diploma in Strategic Studies, Joint Services Staff College, Fellow of the Australian College of Defence and Strategic Studies, Graduate Diploma Australian Institute of Company Directors, Accreditation with Institute of Executive Coaching and Leadership of Australia

SummaryWith 34 years of service in the Australian Army in leadership roles at all levels to Major General, Roger has served in a wide range of senior management positions in Victoria, New South Wales, Queensland and the Australian Capital Territory, blended with overseas roles in the USA, Germany, UK, PNG, and Timor Leste. Roger’s vocational education and training experience includes three years as the head of the Australian Army’s VET Colleges and Schools. Roger’s private sector experience includes roles in executive consultancy, CEO leadership mentoring, coaching, and executive and non-executive board directorships of medium commercial entities. Roger has a comprehensive background in voluntary service, particularly mentoring young leaders and running a large charity fund raising business.

2015 Professional DevelopmentIn 2015, Roger attended the following:Australian Institute of Company Directors - The Essential Director Update, Canberra ACT

2015 Committee membershipCompliance, Audit & Risk

Meetings attended in 2015Eleven from a possible eleven meetings

GOVERNANCE


Stuart St. Clair – DirectorBoard appointment 1 September 2013 to 31 May 2015

Employment/DirectorshipsChief Executive Officer Australian Trucking Association Ltd., Graduate Member of the Australian Institute of Company Directors

SummaryStuart’s career in politics has seen him contribute significantly from a local to federal level. A former Mayor and Councillor of Guyra Shire Council, Stuart was also the Federal Member for New England. Stuart acted as the Senior Advisor for a Deputy Prime Minister and also held the position of Chief of Staff for NSW Shadow Minister for Roads and Ports. Stuart has held Chief Executive roles and sat on numerous Boards, including Armidale and District Hospitals and New England - North West Regional Development Board.

2015 Committee membershipFinance and Infrastructure, Employment and Nomination

Meetings attended in 2015Three from a possible five meetings

Nicki Melville - DirectorBoard appointment 1 September 2013 to 31 May 2015

Employment/DirectorshipsDirector Bioterm Consulting Ltd.

Qualifications and Professional associationsGAICD Diploma Australian Institute of Company Directors, Bachelor of Science (Honours) Class 2 Division 1 - University of Liverpool, UK., Post-Graduate Certificate of Education - University of Liverpool, UK

SummaryRecently retiring from the role of Chief Executive at Bogong Regional GP Training Network, Nicki has significant experience ranging from executive leadership to board representation. Former Chief Executive Officer of the Upper Hume Community Health Service, Nicki provided leadership in the transformation of a small community health service to a large provider of ambulatory services within north-east Victoria. Nicki has been a Director of the Health Promotion Unit of the Greater Murray Area Health Service. Nicki’s leadership was instrumental in the implementation of the Primary Care Partnership strategy at local and state levels. Nicki currently sits on and also chairs multiple Boards in the region.

2015 Professional DevelopmentIn 2015, Nicki attended the following:The Big Issues – Keeping Directors aware – Australian Institute of Company Directors

2015 Committee membershipCompliance, Audit & Risk

Meetings attended in 2015Three from a possible five meetings.

GOVERNANCE

22

Angela Avery - Volunteer DirectorMinisterial appointment 1 September 2013 to 31 May 2015

Employment/DirectorshipsResearch Director, Agriculture Research - Department of Economic Development, Jobs, Transport and Resources, Director, Holbrook Landcare Network, Director, Primary Industries Climate Challenge Centre

Qualifications and Professional associationsBachelor of Applied Science, Graduate Diploma of Business

SummaryAngela’s current role as Research Director involves the state-wide management of research and development teams relating to productive agriculture soils, water and climate. She is also the Director of the Red Meat Innovation Centre at Hamilton. In the past, she has been a project manager with Victoria’s Specialised Rural Industries Research and Development Program, has managed a commercial beef feedlot, and has undertaken plant breeders’ rights contracts for national and international clients. Angela is the author of the book Pastures for Horses: a winning resource. Angela is a board member of Holbrook Landcare and the Primary Industries Climate Challenges Centre. Angela is also a member of the Graham Centre for Agricultural Innovation advisory committee and a committee member of the Albury-Wodonga Grasslands Society.

2015 Committee membershipFinance and Infrastructure

Meetings attended in 2015Four from a possible five meetings

Kay Thawley - Board DirectorMinisterial appointment 4 August 2014 to 30 June 2016

Employment/DirectorshipsDirector, Hume Bank Board, Independent Member, Indigo Shire Audit Committee

SummaryKay has over 25 years’ executive experience in financial services, domestically and internationally. Kay has led significant functional and line management operations predominantly with National Australia Bank Group, was a Banking Industry Partner with Deloitte Touche Tohmatsu, and was CEO of Industry Fund Services providing financial advice, superannuation and investment funds management. Kay is now a company director and is also a Board Member of the Hume Bank Board, and the Indigo Shire Audit Committee.

2015 Professional DevelopmentIn 2015, Kay participated in the continuing education model of the Australian Institute of Company Directors

2015 Committee membershipFinance and Infrastructure (Chair)

Meetings attended in 2015Eleven from a possible eleven Board meetings.

GOVERNANCE


Tony Whiting - Board Director Board Appointment 6 October 2014 to 30 June 2016

Employment/DirectorshipsDirector, Mandoe Pty Ltd, Director, Albury Wodonga Community Media Pty Ltd

Qualifications and Professional associationsBachelor of Commerce (Marketing), University of NSW

SummaryTony has over 30 years of business leadership experience within the media industry, covering international and national roles in publishing, broadcasting and more recently digital media. He brings to Wodonga TAFE a keen understanding of industry requirements with regard to education outcomes as well as knowledge of the role of new media platforms in delivering education opportunities to a wide marketplace.

2015 Committee membershipFinance and Infrastructure

Meetings attended in 2015Eight from a possible eleven meetings

On the 1 December 2015 three new Board Members were appointed in order to fill positions left vacant during the year. The new Board Members did not attend any meetings. Their names are: Catherine Prichard, Allison Jenvey and Kerry Grigg.

GOVERNANCE

24

ORGANISATIONAL STRUCTUREGOVERNANCE

Board CEOMark Dixon

OFFICE OF THE CHIEF EXECUTIVE

OFFICER

Institute Initiatives &PartnershipsJenny Gordon

Acting Executive Officer

Kay Thompson

Executive AssistantsKay Thompson

Elisa Rossi

Team LeaderRecords & Reception

Linda McKenzie

DECA

EDUCATION & TRAINING

Executive DirectorBryan Blake

FINANCE

HUMAN RESOURCES

FACILITIES

Executive DirectorDonna Guille

LEARNING INNOVATION

ORGANISATIONAL DEVELOPMENT

ICT

CLIENT SERVICES

MARKETING

HIGHER EDUCATION

PROJECT MANAGEMENT

OFFICE

Executive DirectorLes Burr

HUMAN RESOURCESDirector

Carolyn Davis

FACILITIESTeam LeaderSteve Morris

FINANCEDirector

Dianne Suidgeest

CAPITAL WORKS AND PROCUREMENTDirector

Garry-owen Leo

MARKETINGDirector

David Pendleton

CLIENT SERVICES AND QUALITY MANAGEMENT

Director Chris Logue

LEARNING INNOVATION, WORKFORCE DEVELOPMENT AND LIBRARY

DirectorGeoff Young

INFORMATION AND COMMUNICATIONS TECHNOLOGY

DirectorMichael Kershler

DECA, NISTC, MOTORSPORTSDirector

Brendan Tenison-Woods

BUSINESS COMMUNICATIONS AND SERVICE INDUSTRIES

DirectorVictoria Conlan

COMMUNITY SERVICES AND HEALTH, KIDS ON CAMPUS

DirectorDamien Crawley

CREATIVE INDUSTRIES, FOUNDATION STUDIES, LEARNER SERVICES

DirectorTom Lawson

LAND, BUILT ENVIRONMENT AND SUSTAINABILITY

DirectorDavid Foote

BUSINESS DEVELOPMENTDirector

Mark Byatt

DIVISION

HIGHER EDUCATIONSenior Educator

Justine Rofe

DEPARTMENT


EXECUTIVE TEAM

Mark Dixon

Chief Executive Officer

Mark provides leadership and advice to the DECA Board on establishing objectives, policies, priorities, and plans. The position manages the operations of DECA to achieve the services and targets negotiated by the DECA Board, the Higher Education Skills Group, and other relevant bodies. The CEO ensures that the strategic objectives of DECA are achieved in a manner that best serves the community. The CEO supervises all key executive appointees and ensures that their performances meet the established goals of Wodonga TAFE (including DECA).

Bryan Blake

Executive Director - Education and Training, Business Development, and DECA

Bryan has the responsibility to provide strategic advice in the areas of education and training. Bryan manages government service agreements for delivery with the Higher Education and Skills Group and out-of-state departments, and oversees educational quality and new business development. Bryan co-chairs the Institute’s Teaching and Learning Committee which operationalises the access and equity portfolio and social inclusion strategies. All delivery departments report through this position and performance reviews of the directors and their departments is a key responsibility.

Les Burr

Executive Director – Learning Innovation, Organisational Development, ICT, Client Services, Marketing, Higher Education, Project Management Office, and Business Intelligence

Les has overall responsibility for ensuring that Wodonga TAFE achieves its business objectives and targets through the development of its people and systems. This includes fostering the innovation, effectiveness, and growth of the Institute by ensuring that its workforce has the skills, knowledge, tools, and confidence to deliver outstanding services to its students, clients, community, industry, staff, and all other stakeholders. The role is central in the driving of new enterprise business models. This division provides strategic business development advice and comprises Marketing, Library Services, Client Services and Quality Management, Information Communications Technology, Higher Education, Project Management, and Learning Innovation. Les also co-chairs the Institute’s Teaching and Learning Committee.

Donna Guille

Executive Director – Finance, Human Resources, Facilities, Capital Works, and Risk Management

Donna has the responsibility to lead, manage, and report on the financial performance of the Institute. The role also provides financial, risk management and strategical business strategy advice to the CEO, the executive team, and directors of the Institute to achieve the Institute’s strategic plan in the context of legislative frameworks, financial impacts, and constraints. Donna has the responsibility of representing the Institute regarding financial and related matters in government, the TAFE sector, the Institute, and community forums. The role has a primary responsibility to meet the Institute’s strategic directions by being a key driver in leading operational systems to manage risk, improve financial performance, and manage human resources, capital works, and facilities.

GOVERNANCE

COMPLIANCE

28

FINANCIAL COMPLIANCE

ConsultanciesDuring 2015, there were no consultancies engaged by DECA.

Legislative compliance

Building Act 1993 DECA ensures that all works which require town planning and building approval are approved by the responsible authority and certified by a Building Surveyor. All new building works in 2015 received the mandatory approvals and inspections, and a Certificate of Occupancy. DECA requires that all building practitioners engaged to carry out major works have current registration and insurance for their respective discipline. All buildings are maintained to a level of acceptable performance and safety by way of periodic checks and testing in accordance with the respective Australian Standard. Records of received permits, inspections, and Certificates of Occupancy are kept in accordance with the Building Act 1993.

Freedom of Information Act 1982 DECA has implemented procedures that, subject to privacy provisions, facilitate all reasonable requests for information from students, staff, and the general public without recourse to the Freedom of Information Act 1982. DECA ensures that its procedures are in line with the requirements of the Freedom of Information Act 1982. During the year ended 31 December 2015, DECA received no requests for information.

Carers Recognition Act 2012 (Carers Act) DECA recognises and values the role of carers and the importance of care relationships in the Victorian community. DECA ensures that its policies and procedures are in line with the requirements of the Carers Recognition Act 2012. DECA understands the importance of providing access to education, and provides flexibility to accommodate any group, including Carers. As an employer, DECA provides flexible work arrangements for Carer’s when required.

National Competition Policy Under the national competition policy, the guiding legislative principle is that legislation, including future legislative proposals, should not restrict competition unless it can be demonstrated that the:

• benefits of the restriction to the community as a whole outweigh the costs

• objectives of the legislation can only be achieved by restricting competition.

DECA has implemented procedures including costing and pricing tools that ensure full compliance with national competition policy.

DECA’s implementation of its policy also addresses the particular requirements of ministerial directions on fees and charges, legislation on the goods and services tax and its guidelines, rulings, and interpretations made by the Australian Competition and Consumer Commission (ACCC). These include the following.

• Rateable values and rating levels, where relevant information has been obtained from the relevant municipal council, have been used to establish property charges for premises occupied by DECA. These costs cover rental, council rates, and land.

• A cost of capital return on equity charge calculation, based on DECA’s net assets and recommended rate of return, is applied.

• FID and debit taxes are based on forecast revenue and by applying the recommended rate.

• The impact of superannuation costs is taken into account.

COMPLIANCE


DECA has implemented measures to ensure that the policy applies to commercial activity and to the pricing of bids for government-funded education and training that are advertised for competitive tender. DECA has also developed a pricing model which ensures that charges for business activity reflect all costs applicable, and all advantages and disadvantages of government ownership are included in pricing calculations.

Protected Disclosures Act 2012 The Protected Disclosures Act 2012 encourages and facilitates the disclosure of improper conduct by public bodies, and other persons, and helps people to make disclosures of improper conduct by public officers and public bodies. The Act provides protection to people who make disclosures in accordance with the Act and establishes a system for the matters disclosed to be investigated and for rectifying action to be taken. DECA does not tolerate improper conduct by employees or the taking of reprisals against those who come forward to disclose such conduct. DECA endeavours to ensure that it complies with the provisions of the Protected Disclosures Act 2012 and that its processes are transparent with appropriate accountabilities. The organisation also aims to support the making of disclosures that reveal corrupt conduct, mismanagement of public resources, or risks to public health and safety for the environment.

DECA does not receive Protected Disclosures, rather such information is sent directly to Independent Broad-based Anti-corruption Commission (IBAC).

RISK COMPLIANCE

Attestation on risk compliance

I, Ulf Ericson, certify that DECA has risk management processes in place consistent with the Australian/New Zealand Risk Management Standard and an internal control system is in place that enables the executive team to understand, manage, and satisfactorily control risk exposures. The Compliance, Audit and Risk Committee verifies this assurance and that the risk profile of the DECA has been critically reviewed within the last 12 months.

Ulf EricsonBoard ChairDriver Education Centre of AustraliaDate: 15 March 2016

COMPLIANCE

30

Additional Information Consistent with the requirements of the Freedom of Information Act 1982, DECA has additional material available about the following items, details of which may be available on request and include:

• shares held beneficially by senior officers as nominees of a statutory authority

• publications, including where they are located and how they can be obtained

• changes in prices, fees, charges, rates, and levies

• major research and developmental activities

• major promotional, public relations, and marketing activities

• assessments and measures undertaken to improve the health and safety of employees

• industrial relations issues

• major committees sponsored

• ex-gratia payments.

During 2015, none of the following were applicable to DECA.

• Accounting for dividends

• Early adoption of authoritative accounting pronouncements

• Private provision of public infrastructure

• Victorian industry participation policy disclosures

No post-balance sheet date events have been identified as having effect. DECA undertook no major commercial activities. Wodonga TAFE oversees and controls the operations of the Driver Education Centre of Australia (DECA).

DECA did not receive any compulsory non-academic fees, subscriptions, or charges in 2015.

DECA complies with the Victorian Public Sector Travel Principles.

DECA complies with all relevant legislation and subordinate instruments including, but not limited to:

• Education and Training Reform Act 2006 (ETRA)• TAFE institute constitution• Directions of the Minister for Training and Skills (or predecessors)• TAFE institute Commercial Guidelines• TAFE institute Strategic Planning Guidelines• Public Administration Act 2004• Financial Management Act 1994• Freedom of Information Act 1982• Building Act 1993• Protected Disclosure Act 2012• Victorian Industry Participation Policy Act 2003

Enquiries about details of any of the items mentioned above should be made in writing and addressed to:

Donna GuilleExecutive Director – Finance, Human Resources and FacilitiesWodonga TAFEPO Box 963 Wodonga Victoria 36891300 698 [email protected]

COMPLIANCE

FINANCIAL REPORT


FINANCIAL REPORT

CONTENTS

Performance statement .................................................................................................................... 37Comprehensive operating statement ................................................................................................ 42Balance sheet ................................................................................................................................... 43Statement of changes in equity ......................................................................................................... 44Cash flow statement ........................................................................................................................ 44Notes to the financial statements ...................................................................................................... 45

The financial report was authorised for issue by the Board members on 8 March 2016. Wodonga Institute of TAFE has the power to amend and reissue the financial report.

The financial statements in the reports are expressed by reference to the nearest $1,000.

34

CERTIFICATIONS

Independent auditor’s certification of the statement of performanceFINANCIAL REPORT


FINANCIAL REPORT

36

STATEMENT OF PERFORMANCE MANAGEMENT CERTIFICATE FOR 2015FINANCIAL

REPORT

In our opinion, the accompanying Performance Statement of Driver Education Centre of Australia Ltd in respect of the 2015 financial year is presented fairly in accordance with the Financial Management Act 1994.

The Statement outlines the performance indicators as determined by the responsible Minister, pre-determined targets and the actual results of the year against these indicators, and an explanation of any significant variance between the actual results and performance targets. As at the date of signing, we are not aware of any circumstance which would render any particulars in the Statement to be misleading or inaccurate.

Ulf Ericson Mark DixonBoard Chair Chief Executive OfficerBoard of Wodonga Institute of TAFE Wodonga Institute of TAFEDate: 15 March 2016 Date: 15 March 2016

Donna GuilleChief Finance & Accounting OfficerWodonga Institute of TAFEDate: 15 March 2016


PERFORMANCE STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

KPI Definition Performance 2015

Target 2015

Performance 2014

Comment

Participation of 15-24 Year olds

No. of students within the age group

2,771 Target not pre-

determined

1,999 Slight increase in VTG students,

overall delivery targeted to FFS

adult training.

Participation of 25-64 Year olds

No. of students within the age group


determined

5,028 Slight increase in VTG students,

overall delivery targeted to FFS

adult training.

Module Load Completion Rate

Scheduled hours assessed and passed or satisfactorily completed / Total scheduled hours reported less hours recorded with Credit Transfer and continuing studies outcomes

96.2% 95% 96.4% Focus on student experience

and retention strategies.

Student Satisfaction

Proportion of graduates satisfied with the overall quality of training

92% 87% 89% Focus on student experience

and retention strategies.

Student Contact Hours (SCH)

Total SCH reported (Includes training activity from all funding sources, fee-for-service and overseas full fee paying students)


determined

894,945 Some SCH activity. VTG subsidies are

processed through

Wodonga TAFE.

Total Cost per Student Contact Hour (SCH)

Expenditure (excl Depreciation) / Total SCH

$23.93 Target not pre-

determined

$14.56 SCH increase but on a low

base, majority of delivery is Fee

for Service.

Return on Investment (ROI)

Operating Surplus (EBIT excluding capital contributions, incl depreciation & amortisation, profit and loss on sale of assets, non cash LSL movements, excl bad debts).

-10.68% 0.00% 0.96% Under target due to declining

market. Business model is under

strategic review.

FINANCIAL REPORT

38

KPI Definition Performance 2015

Target 2015

Performance 2014

Comment

Working Capital Ratio

Current Assets / Current Liabilities (adjusted for non-current L/S/L)

2.34:1 1:1 6.35:1 Continued focus on cash management with support

from Wodonga TAFE.

Fee for Service Revenue

Fee for Service Revenue / Total Revenue (Excl Capital) (%)

99.0% Target not pre-

determined

99.3% Majority of delivery is Fee

for Service, VTG subsidies

processed through

Wodonga TAFE.

Operating Margin (%)

EBIT excl capital contributions/Total Revenue excl capital contributions

-13.8% 8.67% -5.5% Under target due to declining

market. Business model is under

strategic review.

Employment costs as a proportion of training revenue (%)

(Employment costs + 3rd party training delivery costs)/Total training revenue

NA NA NA DECA uses a labour hire

agreement with Wodonga TAFE.

Training Revenue per teaching FTE ($)

Training revenue (excl revenue delivered via 3rd Party delivery)/Total teaching FTE (incl annualised casual teaching staff)

NA NA NA DECA uses a labour hire

agreement with Wodonga TAFE.

Revenue Diversity (%)

Govt funded training revenue/Total training revenue

0.0% 0.00% 0.0% Training revenue is Fee for Service

delivery. Any VTG subsidies are processed

through Wodonga TAFE.

Revenue Diversity (%)

Non Govt funded training revenue (FFS & student fees and chgs)/Total training revenue

100.0% 100.00% 100.0% Training revenue is Fee for Service

delivery. Any VTG subsidies are processed

through Wodonga TAFE.

FINANCIAL REPORT


FINANCIAL REPORT

INDEPENDENT AUDITOR’S CERTIFICATION OF THE FINANCIAL REPORT

40

FINANCIAL REPORT


FINANCIAL REPORT

DECLARATION BY BOARD CHAIR, CHIEF EXECUTIVE OFFICER AND CHIEF FINANCE AND ACCOUNTING OFFICER

We certify that the attached financial statements for the Driver Education Centre of Australia Ltd has been prepared in accordance with Corporations Act 2001, applicable Financial Reporting Directions issued under that legislation, Australian Accounting Standards and other mandatory professional reporting requirements. We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and notes to and forming part of the financial report, presents fairly the financial transactions during the year ended 31 December 2015 and financial position of the Company as at 31 December 2015. At the date of signing this financial report, we are not aware of any circumstance that would render any particulars included in the financial report to be misleading or inaccurate. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they became due and payable. The Board Chair and the Chief Executive Officer sign this declaration as delegates of, and in accordance with a resolution of, the Board of the Driver Education Centre of Australia Ltd.

Board Chair Chief Executive OfficerUlf Ericson Mark Dixon Date: 15 March 2016 Date: 15 March 2016Place - Wodonga Place - Wodonga Chief Finance & Accounting Officer Donna Guille Date: 15 March 2016 Place - Wodonga

42

FINANCIAL REPORT

COMPREHENSIVE OPERATING STATEMENT

for the year ended 31 December 2015

2015 2014

Note $ ‘000 $’000

Continuing operations

Income from transactions

Sale of goods and services 2(a) 10,327 13,698

Interest 2(b) 2 10

Other income 2(c) 100 82

Total income from transactions 10,429 13,790

Expenses from transactions

Depreciation and amortisation 3(a) 559 626

Supplies and services 3(b) 10,186 11,362

Other operating expenses1 3(c) 1,127 1,668

Total expenses from transactions 11,872 13,656

Net result from transactions (net operating balance) (1,443) 134

Other economic flows included in net result

Net gain/(loss) on non-financial assets2 4(a) 40 -

Total other economic flows included in net result 40 -

Net result from continuing operations (1,403) 134

Comprehensive result (1,403) 134

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

Notes

1. Other operating expenses includes bad debts expense from transactions that are mutually agreed.

2. Net gain/(loss) on non financial assets’ includes unrealised and realised gains/(losses) from revaluations, impair-ments, and disposals of all physical assets and intangible assets, except when these are taken through the asset revaluation surplus.


BALANCE SHEET

as at 31 December 2015

2015 2014

Note $'000 $'000

Assets

Financial assets

Cash and deposits 13(a) 374 361

Receivables 5 333 1,014

Total financial assets 707 1,375

Non-financial assets

Inventories 6 4 7

Property, plant and equipment 7 13,525 14,107

Intangible assets 8 1

Other non-financial assets 9 152 177

Total non-financial assets 13,681 14,292

Total assets 14,388 15,667

Liabilities

Payables 10 1,563 1,439

Borrowings 11 1,075 1,075

Total liabilities 2,638 2,514

Net assets 11,750 13,153

Equity

Accumulated surplus/(deficit) (2,281) (878)

Physical asset revaluation surplus 12(a) 11,732 11,732

Contributed capital 2,299 2,299

Net worth 11,750 13,153

Commitments for expenditure 14 34 106

Contingent assets and contingent liabilities 15 - -

The balance sheet should be read in conjunction with the notes to the financial statements.

FINANCIAL REPORT

44

STATEMENT OF CHANGES IN EQUITY


Physical asset revaluation

surplus

Avaialble for sale financial

asset revaluation on surplus

Accumulated surplus

Contributions by owner

Total

$’000 $’000 $’000 $’000 $’000

At 1 January 2014 11,732 - (1,012) 2,299 13,019

Net result for the year - - 134 - 134

Year ended 31 December 2014 11,732 - (878) 2,299 13,153

Net result for the year - (1,403) (1,403)

Year ended 31 December 2015 11,732 - (2,281) 2,299 11,750

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

CASH FLOW STATEMENT


2015 2014

Note $’000 $’000

Cash flows from operating activities

Receipts

User fees and charges received 11,190 12,371

Goods and services tax recovered from the ATO 255 374

Interest received 2 10

Other receipts 100 77

Total receipts 11,547 12,832

Payments

Payments to suppliers and employees (11,373) (13,061)

Goods and services tax paid to the ATO1 (225) (31)

Total payments (11,598) (13,092)

Net cash flows from/(used in) operating activities 13(b) (51) (260)

Cash flows from investing activities

Purchases of non-financial assets (21) (62)

Proceeds from sales of non-financial assets 85 -

Net cash provided by/(used in) investing activities 64 (62)

Net increase/(decrease) in cash and cash equivalents 13 (322)

Cash and cash equivalents at the beginning of the financial year 361 683

Cash and cash equivalents at the end of the financial year 13(a) 374 361

The above cash flow statement should be read in conjunction with the notes to the financial statements.

Notes

1. Goods and Services Tax paid to the ATO is presented on a net basis

FINANCIAL REPORT


NOTES TO FINANCIAL STATEMENTS


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 Inventories

7 Property, plant and equipment

8 Intangible assets

9 Other non-financial assets

10 Payables

11 Borrowings

12 Reserves

13 Cash flow information

14 Commitments for expenditure

15 Contingent assets and contingent liabilities

16 Leases

17 Financial instruments

18 Responsible persons and executive officers

19 Remuneration of auditors

20 Related parties

21 Subsequent events

22 Economic dependency

23 Company details

FINANCIAL REPORT

46

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The annual financial statements represent the audited general purpose financial statements for Driver Education Centre of Australia Ltd.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 31 December 2015 and the comparative information presented for the year ended 31 December 2014.

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.

1.01 Statement of compliance

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

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

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

The financial statements were authorised for issue by the board members on 15th March 2016.

1.02 Basis of accounting preparation and measurement

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

These financial statements are presented in Australian dollars, the functional and presentation currency of the 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. 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, and;

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

FINANCIAL REPORT


Critical accounting judgement and key sources of estimation uncertainty 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:

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

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

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

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

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

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

For the purpose of fair value disclosures, the Company 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 Company 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 Entity’s independent valuation agency.

The Company, 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.

1.03 Reporting entity

The financial statements cover the Driver Education Centre of Australia Ltd as an individual reporting entity. The entity is a Company limited by Guarantee established pursuant to an act/order made by the Victorian Government under the Enacted Act 2006.

Its principal address is:

Driver Education Centre of Australia Ltd29-45 Millers RdAltona North, VIC. 3025

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

FINANCIAL REPORT

48

1.04 Basis of consolidation

In accordance with AASB 10 Consolidated Financial Statements, the consolidated financial statements of the Company combine like items of assets, liabilities, equity, income, expenses and cash flows of the Company with those of the reporting entities controlled by the Entity. Uniform accounting policies for like transactions and other events in similar circumstances are applied in the preparation of consolidated financial statements.

A controlled entity is a entity over which the Company has exposure or rights to variable returns from its involvement with the entity, and the ability to affect those returns though the use of its power over the entity.

The existence of power over an entity is established when the Company has existing rights that give it the current ability to direct the activities of the controlled entity which would significantly affect the returns of the controlled entity.

Where control of an entity is obtained during the financial period, its results are included in the comprehensive operating statement from the date on which control commenced. Where control ceases during a financial period, the entity’s results are included for that part of the period in which control existed.

All intragroup assets, liabilities, equity, income, expenses and cash flows relating to transactions between entities of the group are eliminated in full on consolidation.

If a member of the group uses accounting policies other than those adopted in the consolidated financial statements for like transactions and events in similar circumstances, appropriate adjustments are made to that group member’s financial statements in preparing the consolidated financial statements to ensure conformity with the group’s accounting policies.

The Company has no controlled entities.

Consistent with the requirements of AASB 1004 Contributions, contributions by owners (that is, contributed capital and its repayment) are treated as equity transactions and, therefore, do not form part of the income and expenses of the Company.

Associated entities (associates) Associates are those entities over which the Company has significant influence through the power to participate in the financial and operating policy decisions of the entity, but not control or joint control of those policies. Significant influence is presumed to exist with voting power of 20% or more in an entity. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost. Under this method, the Company’s share of the post-acquisition profits or losses of associates is recognised in net result and its share of post-acquisition movements in reserves is recognised in reserves (non-owner equity) in both the statement of comprehensive income and the statement of changes in equity. The cumulative post-acquisition movements are adjusted against the cost of the investment.

Joint arrangements In accordance with AASB 11, there are two types of joint arrangements, i.e. joint operations and joint ventures. Joint operations arise where the investors have rights to the assets and obligations for the liabilities of an arrangement. A joint operator accounts for its share of the assets, liabilities, revenue and expenses. Joint ventures arise where the investors have rights to the net assets of the arrangement; joint ventures are accounted for under the equity method. Proportionate consolidation of joint ventures is no longer permitted.

A joint arrangement is either a joint operation or a joint venture. The classification of a joint arrangement as a joint operation or a joint venture depends on the rights and obligations of the parties to the arrangement.

Joint operations A joint operation is a joint arrangement where the parties that have joint control of the arrangement (called ‘the joint operators’) have rights to the assets, and obligations for the liabilities, relating to the joint arrangement. Interests in joint operations are not consolidated by the Entity, but are accounted for in accordance with the policy outlined in Note 1.11 Financial Assets, using the accounting for assets and liabilities method.

FINANCIAL REPORT


Joint ventures A joint venture is a joint arrangement where the parties that have joint control of the arrangement (called the ‘joint venturers’) have rights to the net assets of the arrangement.

Interests in joint ventures are accounted for in the consolidated financial statements using the equity method in accordance with AASB 128 Investments in Associates and Joint Ventures. Under this method, the Company’s investment in the joint venture is initially recognised at cost and adjusted thereafter for the Company’s share of post-acquisition change in the joint venture’s net assets. The Company’s profit or loss includes its share of the joint venture’s profit or loss and the Company’s other comprehensive income includes its share of the joint venture’s other comprehensive income.

1.05 Events after reporting date

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.

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

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

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

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

1.07 Income from transactions

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:

Government contributions Government contributions are recognised as revenue in the period when the Company 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.

FINANCIAL REPORT

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Sale of goods and services

(i) Student fees and charges

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

*Concepts of materiality AASB 1031 should be used in determining non-refundable portion of fees.

(ii) Fee for Service

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

(iii) Revenue from sale of goods

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

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

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

(c) the amount of revenue can be reliably measured;

(d) it is probable that the economic benefits associated with the transaction will flow to the Company, and;

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

Interest 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.

Other income

(i) Dividend revenue

Dividend revenue is recognised when the right to receive payment is established.

(ii) Rental income

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

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

FINANCIAL REPORT


1.08 Expenses from transactions

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

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

Retirement benefit obligations

(i) Defined contribution plan

Contributions to defined contribution plans are expensed when they become payable.

(ii) Defined benefit plans

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

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

Depreciation and amortisation

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

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

Class of asset Method Rate(s)

Buildings Straight Line 2.0%

Plant & equipment Straight Line 10 - 50%

Leasehold Improvements Straight Line 2.5 - 7.5%

Motor vehicles Straight Line 10 - 22.5%

Land improvements Straight Line 2 - 10%

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

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

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Amortisation methods and rates used for each class of assets are:

Class of asset Method Rate(s)

Internal Use Software Straight Line 20 - 33%

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 Company tests all intangible assets with indefinite lives for impairment by comparing its recoverable amount with its carrying amount:

(a) annually, and;

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

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

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

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

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

Fair value of assets and services provided free of charge or for nominal consideration Resources provided free of charge or for nominal consideration are recognised at their fair value when the Entity 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.

1.09 Other economic flows included in net result

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

Net gain/(loss) on non-financial assets 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.

Disposal of non-financial 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.

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

FINANCIAL REPORT


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

• Inventories;

• Financial assets;

• Investment property that is measured at fair value;

• Certain biological assets related to agricultural activity, and;

• Non-current assets held-for-sale.

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

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

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

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

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

Revaluations of financial instruments at fair value

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

Impairment of financial assets Financial assets have been assessed for impairment in accordance with Australian Accounting Standards. Where a financial asset’s fair value at balance date has reduced by 10 per cent or more than its cost price; or where its fair value has been less than its cost price for a period of 3 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’.

Share of net profits/(losses) of associates and joint ventures, excluding dividends Investments in associates and joint ventures are accounted for in the financial statements using the equity method. Under this method, the Company’s share of post acquisition profits or losses of associates and joint ventures is recognised in the net result as other economic flows.

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

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

1.10 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.

Categories of non-derivative financial instruments

Loans and receivables 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.

1.11 Financial assets

Cash and deposits 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.

Receivables 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.

FINANCIAL REPORT


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

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

• the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass through’ arrangement; or

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

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

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

Impairment of financial assetsAt the end of each reporting period, the Company 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.

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

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

1.12 Leases

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

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

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Operating leases

Company as lessee Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset. The leased asset is not recognised in the balance sheet.

All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive’s nature or form or the timing of payments.

1.13 Non-Financial Assets

Inventories 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. It includes land held-for-sale and excludes depreciable assets.

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

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

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

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

This condition is regarded as met only when:

• the asset is available for immediate use in the current condition; and

• the sale is highly probable and the asset’s sale is expected to be completed within twelve months from the date of classification.

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

Property, plant and equipment All non-financial physical assets, are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment. 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.

FINANCIAL REPORT


Non-financial physical assets such as national parks, other Crown land and heritage assets are measured at fair value with regard to the property’s highest and 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.

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.

Road network assets (including earthworks of the declared road networks) are measured at fair value, determined by reference to the asset’s depreciated replacement cost.

Land under declared roads acquired prior to 1 July 2008 is measured at fair value. Land under declared roads acquired on or after 1 July 2008 is measured initially at cost of acquisition and subsequently at fair value. The fair value methodology applied by the Valuer General Victoria is based on discounted site values for relevant municipal areas applied to land area under the arterial road network, including related reservations.

The fair value of infrastructure systems and plant, equipment and vehicles, is normally determined by reference to the asset’s depreciated replacement cost, or where the infrastructure is held by a for-profit entity, the fair value may be derived from estimates of the present value of future cash flows. For plant, equipment and vehicles, existing depreciated historical cost is generally a reasonable proxy for depreciated replacement cost because of the short lives of the assets concerned.

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.

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

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

Revaluations of non-financial physical assets 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.

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.

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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.

Intangible assets 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 Company. 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:

(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;

(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

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

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

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

2015 2014

Capitalised software development cost (years) 3-5 3-5

Prepayments Prepayments 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.

1.14 Liabilities

Payables

Payables consist of:

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

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

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

FINANCIAL REPORT


Provisions 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.

Employee benefits All Employees and Employee entitlements were transferred to Wodonga Insititute of TAFE in January 2013.

Borrowings 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.

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

Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

Financial guarantees Payments that are contingent under financial guarantee contracts are recognised as a liability at the time the guarantee is issued. The liability is initially measured at fair value, and if there is a material increase in the likelihood that the guarantee may have to be exercised, then it is measured at the higher of the amount determined in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation, where appropriate.

The fair value of financial guarantee contracts has been assessed using the probability weighted discounted cash flow approach. The probability has been based on:

• the likelihood of the guaranteed party defaulting in a year’s period;

• the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and

• the maximum loss exposed if the guaranteed party were to default.

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

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1.15 Commitments

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.

1.16 Contingent assets and contingent liabilities

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note (refer to Note 15) and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of the GST receivable or payable respectively.

1.17 Equity

Contributed capital 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.

1.18 Foreign currency translations

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

Transactions and balances 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.

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.

Group entities The financial results and position of foreign operations whose functional currency is different from the group’s presentation currency are translated as follows:

• Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date.

• Income and expenses are translated at average exchange rates for the period.

Exchange differences arising on translation of foreign operations are recognised as a separate component of equity. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionate share of such exchange differences are recognised in the statement of comprehensive income as part of the gain or loss on sale where applicable.

FINANCIAL REPORT


1.19 Materiality

In 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.

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.

1.20 Rounding of amounts

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

1.21 Comparative information

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

1.22 Change in accounting policy

Subsequent to the 2014 reporting period, the following new and revised accounting standards have been adopted in the current period with their financial impact detailed as below.

AASB 2015-7 Amendments to Australian Accounting Standards - Fair Value Disclosure of Not-for-Profit Public Sector Entities:

The Minister for Finance has approved the early adoption of AASB 2015-7. This enables Victorian not-for-profit public sector entities to benefit from some limited scope exemptions in relation to the fair value disclosure for the 2014-15 reporting period. The Institute has chosen to apply this early adoption. For fair value measurements that have been categorised within Level 3 of the fair value hierarchy, the Institute is no longer required to provide quantitative information about the ‘significant unobservable inputs’ used in determining the fair value measurement.

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1.23 New and revised AASBs in issue but not yet effective

Certain new accounting standards and interpretations have been published that are not mandatory for the 31 December 2015 reporting period.

As at 31 December 2015 the following standards and interpretations (applicable to the Company) had been issued but were not mandatory for financial year ending 31 December 2015. The Company has not, and does not intend to, adopt these standards early.

Standard/Interpretation

Summary Application date of standard

Impact on entity financial statements

AASB 9 Financial Instruments

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

1 Jan 2018 The assessment has identified that the financial impact of available for sale (AFS) assets will now be reported through other comprehensive income (OCI) 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.

AASB 14 Regulatory Deferral Accounts #

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

1 Jan 2016 The assessment has indicated that there is no expected impact, as those that conduct rate-regulated activities have already adopted Australian Accounting Standards.

AASB 15 Revenue from Contracts with Customers

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

1 Jan 2017

(Exposure Draft 263 - potential deferral to 1 Jan 2018)

The changes in revenue recognition requirements in AASB 15 may result in changes to the timing and amount of revenue recorded in the financial statements. The Standard will also require additional disclosures on service revenue and contract modifications.

FINANCIAL REPORT





AASB 1056 Superannuation Entities #

AASB 1056 replaces AAS 25 Financial Reporting by Superannuation Plans. The standard was developed in light of changes in recent years, developments in the superannuation industry and Australia’s adoption of IFRS.

Some of the key changes in AASB 1056 include:

• the level of integration between AASB 1056 and other AASB standards

• a revised definition of a superannuation entity

• revised and consistent content for the financial

• use of fair value rather than net market value for measuring assets and liabilities

• revised member liability recognition and measurement requirements

• revised disclosure principles.

1 July 2016 The assessment has indicated that there will be no impact on the entity, as the Accounting Standard only affects superannuation entities’ own reporting.

AASB 2014-1 Amendments to Australian Accounting Standards [Part E Financial Instruments]

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

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

FINANCIAL REPORT

64




AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation

[AASB 116 & AASB 138]

Amends AASB 116 Property, Plant and Equipment and AASB 138 Intangible Assets to:

• establish the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset;

• prohibit the use of revenue-based methods to calculate the depreciation or amortisation of an asset, tangible or intangible, because revenue generally reflects the pattern of economic benefits that are generated from operating the business, rather than the consumption through the use of the asset.

1 Jan 2016 The assessment has indicated that there is no expected impact as the revenue-based method is not used for depreciation and amortisation.

AASB 2014-9 Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements

[AASB 1, 127 & 128]

Amends AASB 127 Separate Financial Statements to allow entities to use the equity method of accounting for investments in subsidiaries, joint ventures and associates in their separate financial statements.

1 Jan 2016 The assessment indicates that there is no expected impact as the entity will continue to account for the investments in subsidiaries, joint ventures and associates using the cost method as mandated if separate financial statements are presented in accordance with FRD 113A.

FINANCIAL REPORT





AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

[AASB 10 & AASB 128]

AASB 2014-10 amends AASB 10 Consolidated Financial Statements and AASB 128 Investments in Associates to ensure consistent treatment in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The amendments require that:

• a full gain or loss to be recognised by the investor when a transaction involves a business (whether it is housed in a subsidiary or not); and

• a partial gain or loss to be recognised by the parent when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.

1 Jan 2016 The assessment has indicated that there is limited impact, as the revisions to AASB 10 and AASB 128 are guidance in nature.

AASB 2015-6 Amendments to Australian Accounting Standards – Extending Related Party Disclosures to Not-for-Profit Public Sector Entities

[AASB 10, AASB 124 & AASB 1049]

The Amendments extend the scope of AASB 124 Related Party Disclosures to not-for-profit public sector entities. A guidance has been included to assist the application of the Standard by not-for-profit public sector entities.

1 Jan 2016 The amending standard will result in extended disclosures on the entity’s key management personnel (KMP), and the related party transactions.

1.24 Integration - Wodonga Institute of TAFE

On 1 January 2013 Driver Education Centre of Australia Ltd (DECA) integrated with Wodonga Institute of TAFE under the consent of the Victorian Minister for Higher Education and Skills, the Hon. Peter Hall. Under the Memorandum of Understanding, Wodonga Institute of TAFE have assumed the liability and transfer of employees and their entitlements for which a working capital loan has been created and supported. DECA remains as a company limited by guarantee and each entity is controlled by separate Boards with common membership. Under the integration, DECA retains all assets and liabilities with the exception of employee entitlements. DECA provides a licence of its intellectual property to Wodonga Institute of TAFE to enable management by both parties of DECA’s business operations. Wodonga Institute of TAFE may charge DECA a fee as determined by the Boards for assistance in managing the business operations.

FINANCIAL REPORT

66

NOTE 2. INCOME FROM TRANSACTIONS

2015 2014

$’000 $’000

(a) Sales of goods and services

Student fees and charges 17 5

Rendering of services

Fee for service - Government 8,186 7,219

Fee for service - other 2,124 6,471

Total rendering of services 10,310 13,690

Other non-course fees and charges

Sale of goods - 3

Total other fees and charges - 3

Total revenue from sale of goods and services 10,327 13,698

(b) Interest

Interest from financial assets not at fair value through P/L:

Interest on bank deposits 2 10

Total interest from financial assets not at fair value through P/L 2 10

Net interest income 2 10

(c) Other income

Other revenue 100 82

Total other income 100 82

FINANCIAL REPORT


NOTE 3. EXPENSES FROM TRANSACTIONS

2015 2014

$’000 $’000

(a) Depreciation and amortisation

Depreciation of non-current assets

Buildings 119 119

Plant and equipment 33 36

Motor vehicles 350 409

Leasehold improvements 56 56

Total depreciation 558 620

Amortisation of non-current physical and intangible assets

Software 1 6

Total amortisation 1 6

Total depreciation and amortisation 559 626

(b) Supplies and services

Purchase of supplies and consumables 109 210

Communication expenses 54 69

Contract and other services 9,701 10,855

Building repairs and maintenance 259 188

Minor equipment - 13

Fees and charges 63 27

Total supplies and services 10,186 11,362

(c) Other operating expenses

General expenses

Marketing and promotional expenses 4 26

Occupancy expenses 167 308

Audit fees and services 23 29

Staff development (14) 41

Travel and motor vehicle expenses 350 660

Motor vehicle taxes 280 304

Other expenses 233 171

Total other expenses 1,043 1,539

Operating lease rental expenses:

Lease payments 84 129

Total operating lease rental expenses 84 129

Subtotal 1,127 1,668

Total other operating expenses 1,127 1,668

NOTE 4. OTHER ECONOMIC FLOWS INCLUDED IN NET RESULT

2015 2014

$’000 $’000

(a)Net gain/(loss) on non-financial assets (including PPE and intangible assets)

Net gain on disposal of property plant and equipment 40 -

Total net gain/(loss) on non-financial assets 40 -

FINANCIAL REPORT

68

NOTE 5. RECEIVABLES

2015 2014

$’000 $’000

Current receivables

Contractual

Sale of goods and services1 331 535

Revenue receivable - 470

Total contractual 331 1,005

Statutory

GST Input tax credit recoverable 2 2

Total statutory 2 2

Total current receivables 333 1,007

Non-current receivables

Contractual

Security Deposit on Property - 7

Total contractual - 7

Total non-current receivables - 7

Total receivables 333 1,014

1. The average credit period for sales of goods and services and for other receivables is 30 days. No interest is charged for the first 30 days from the date of the invoice. No interest is charged on the outstanding balance. 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.

(a) Ageing analysis of contractual receivables Please refer to Note 17(ii) for the ageing analysis of contractual receivables.

(b) Nature and extent of risk arising from contractual receivables Please refer to Note 17(ii) for the nature and extent of credit risk arising from contractual receivables.

NOTE 6. INVENTORIES

2015 2014

$’000 $’000

Current

List type of inventories held

Supplies and consumables - at cost 4 7

Total current inventories 4 7

FINANCIAL REPORT


NOTE 7. PROPERTY, PLANT AND EQUIPMENT

In accordance with government purpose classifications, the Company’s property, plant and equipment are assets used for the purpose of education. Property, plant & equipment includes all operational assets.

Land at fair value1

Buildings Plant and equipment

Motor Vehicles

Leasehold Improve-

ments

Land improve-

ments

Total

(a) Company $’000 $’000 $’000 $’000 $’000 $’000 $’000

At 1 January 2014

Valuation 4,696 5,916 795 6,403 - 2,261 20,071

Accumulated depreciation - (118) (649) (4,582) - (57) (5,406)

Net book amount 4,696 5,798 146 1,821 - 2,204 14,665

Year ended 31 December 2014

Opening net book amount 4,696 5,798 146 1,821 - 2,204 14,665

Additions - - 20 32 10 - 62

Disposals - - - - - - -

Depreciation1 - (119) (36) (409) - (56) (620)

Closing net book amount 4,696 5,679 130 1,444 10 2,148 14,107

At 31 December 2014

Valuation 4,696 5,916 815 6,435 10 2,261 20,133


Net book amount 4,696 5,679 130 1,444 10 2,148 14,107


Opening net book amount 4,696 5,679 130 1,444 10 2,148 14,107

Additions - 10 - 11 - - 21

Disposals - - - (45) - - (45)

Depreciation2 - (119) (33) (350) - (56) (558)

Closing net book amount 4,696 5,570 97 1,060 10 2,092 13,525

At 31 December 2015

Valuation 4,696 5,926 815 6,002 10 2,261 19,710


Net book value at the end of the financial year

4,696 5,570 97 1,060 10 2,092 13,525

Notes

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

FINANCIAL REPORT

70

Carrying amount as at

31 Dec 2015

Fair value hierarchy

(b) Fair value measurement hierarchy for assets as at 31 December 2015

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 4,696 - 4,696 -

Specialised land 2,091 - - 2,091

Total of land at fair value 6,787 - 4,696 2,091

Buildings at fair value:

Non specialised buildings 5,571 5,571

Specialised buildings - - - -

Total of buildings at fair value 5,571 - 5,571 -

Plant, equipment and vehicles at fair value:

Vehicles1 1,060 - - 1,060

Leasehold Improvements 10 - - 10

Plant and equipment 97 - - 97

Total of plant, equipment and vehicles at fair value 1,167 - - 1,167

Notes

1 Vehicles are categorised to Level 3 assets as the depreciated replacement cost is used in estimating the fair value.

There were no transfers between Levels during the year.

(c) Valuations of Property, Plant and Equipment

Fair value assessments have been performed at 31 December 2015 for all classes of assets. This assessment demonstrated that fair value was materially similar to carrying value, and therefore a full revaluation was not required this year. The next scheduled full revaluation for this purpose will be conducted in 2017.

Non specialised land, non specialised buildings Non specialised land, non specialised buildings are valued using the market approach. Under this valuation method, the assets are compared to recent comparable sales or sales of comparable assets which are considered to have nominal or no added improvement value.

For non specialised land and non specialised buildings, an independent valuation was performed by independent valuers to determine the fair value using the market approach. Valuation of the assets was determined by analysing Department of Sustainability and Environment comparable sales and allowing for share, size, topography, location and other relevant factors specific to the asset being valued. From the sales analysed, an appropriate rate per square metre has been applied to the subject asset. The effective date of the valuation is 31 December 2012.

To the extent that non specialised land, non specialised buildings do not contain significant, unobservable adjustments, these assets are classified as Level 2 under the market approach.

FINANCIAL REPORT


Specialised land and specialised buildings The market approach is also used for specialised land, although is adjusted for the Community Service Obligation (CSO) to reflect the specialised nature of the land being valued.

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

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

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

Vehicles Vehicles are valued using the depreciated replacement cost method. The Company 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 Company who set relevant depreciation rates during use to reflect the utilisation of the vehicles.

Plant and equipment 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.

There were no changes in valuation techniques throughout the period to 31 December 2015.

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

(c) Reconciliation of Level 3 fair value as at 31 December 2015

Plant and equipment

Motor Vehicles Leasehold Improvements

Specialised Land

$’000 $’000 $’000 $’000

Opening balance 130 1,444 10 2,148

Purchases (sales) - (433) - -

Depreciation (33) 49 - (57)

Subtotal 97 1,060 10 2,091

Closing balance 97 1,060 10 2,091

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

Valuation technique Significant unobservable inputs

Plant and equipment Depreciated replacement costCost per unit

Useful life plant and equipment

Motor vehicles Depreciated replacement costCost per unit

Useful life of vehicles

Leasehold Improvements Depreciated replacement costCost per unit

Life of Lease

Specialised Land Depreciated replacement costCost per unit

Useful life of Land

FINANCIAL REPORT

72

NOTE 8. INTANGIBLE ASSETS

Software Total

$’000 $’000


Gross carrying amount

Opening balance 328 328

Closing balance 328 328

Accumulated amortisation and impairment

Opening balance (321) (321)

Amortisation of intangible produced assets1 (6) (6)

Closing balance (327) (327)

Net book value at end of financial year 1 1

Software Total

$’000 $’000


Gross carrying amount

Opening balance 328 328

Closing balance 328 328

Accumulated amortisation and impairment

Opening balance (327) (327)

Amortisation of intangible produced assets1 (1) (1)

Closing balance (328) (328)

Net book value at end of financial year - -

Notes

1. The consumption of intangible produced assets is included in ‘amortisation’ line item, where the consumption of the intangible non produced assets is included in ‘net gain/(loss) on non financial assets’ line item on the comprehensive operating statement.

NOTE 9. OTHER NON-FINANCIAL ASSETS

2015 2014

$’000 $’000

Current other non-financial assets

Prepayments 152 177

Total current other non-financial assets 152 177

Total other non-financial assets 152 177

FINANCIAL REPORT


NOTE 10. PAYABLES

2015 2014

$’000 $’000

Current

Contractual

Supplies and services1 370 246

Total current payables 370 246

Non-current

Contractual

Other payables2 1,193 1,193

Total non-current payables 1,193 1,193

Total payables 1,563 1,439

Notes

1. The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice. Thereafter, interest is charged at 2 per cent per year on the outstanding balance.

2. Loan from Wodonga Institute of TAFE with no Terms and Conditions and no Interest.

(a) Maturity analysis of contractual payablesPlease refer to Note 17(iii) for the maturity analysis of contractual payables.

(b) Nature and extent of risk arising from contractual payablesPlease refer to Note 17(iii) for the nature and extent of risks arising from contractual payables.

NOTE 11. BORROWINGS

2015 2014

$’000 $’000

Current

Advances from government1 1,075 1,075

Total non-current borrowings 1,075 1,075

Total borrowings 1,075 1,075

Notes

1. They are unsecured loans which bear no interest. The term of the loan has no terms or repayment schedule.

(a) Maturity analysis of borrowingsPlease refer to Note 17(iii) for the maturity analysis of borrowings.

(b) Nature and extent of risk arising from borrowingsPlease refer to Note 17(iii) for the nature and extent of risks arising from borrowings.

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

FINANCIAL REPORT

74

NOTE 12. RESERVES

2015 2014

$’000 $’000

(a) Physical asset revaluation surplus1:

Balance at 1 January 11,732 11,732

Balance at 31 December 11,732 11,732

Net changes in reserves 11,732 11,732

Notes

1. The physical assets revaluation surplus arises on the revaluation of infrastructure, land and buildings.

NOTE 13. CASH FLOW INFORMATION

2015 2014

$’000 $’000

(a) Reconciliation of cash and cash equivalents

Total cash and deposits disclosed in the balance sheet1 374 361

Balance as per cash flow statement 374 361

Note

1. The Company does not hold a large cash reserve in its bank accounts. Cash received by the Company from the generation of income is generally paid into the Company’s bank accounts. Similarly, any Company expenditure, including those in the form of cheques drawn by the Company for the payment of goods and services to its suppliers and creditors are made via the Company’s bank accounts.

2015 2014

$’000 $’000

(b) Reconciliation of net result for the period

Net result for the year (1,403) 134

Non cash movements:

(Gain)/loss on sale or disposal of non current assets (40) -

Depreciation and amortisation of non current assets 559 626

Movements in assets and liabilities

Decrease / (increase) in trade receivables 681 (425)

Decrease / (increase) in inventories 3 (4)

Decrease / (increase) in other assets 25 7

Increase / (decrease) in payables 124 (1,223)

Increase / (decrease) in current liabilities - (568)

Increase / (decrease) in non-current liabilities - 1,193

Net cash flows from/(used in) operating activities (51) (260)

FINANCIAL REPORT


NOTE 14. COMMITMENTS FOR EXPENDITURE

2015 2014

$’000 $’000

(a) Non-cancellable operating lease commitments payable1

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

Within one year 21 106

Later than one year but not later than five years 16 -

Total minimum lease payments in relation to non-cancellable operating leases

37 106

GST reclaimable on the above (3) -

Net Commitments Non-cancellable Operating Leases 34 106

Note

1. The Company’s operating leases are in the form of Leased vehicles with minimum lease terms and leases on Office Facilities with fixed terms.

NOTE 15. CONTINGENT ASSETS AND CONTINGENT LIABILITIES

There were no contingent assets or contingent liabilities.

NOTE 16. LEASES

(i) Operating leases - Company as lesseeRefer to Note 14 (Commitments for expenditure).

(ii) Operating leases - Company as lessorThe Company has no Leases as Lessor.

NOTE 17. FINANCIAL INSTRUMENTS

(i) Financial risk management objectives and policies

The Company’s principal financial instruments comprise cash assets, term deposits, receivables (excluding statutory receivables), payables (excluding statutory payables) and prepayments.

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 Company’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 Company’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 Company. The Company 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, and ageing analysis for credit risk.

FINANCIAL REPORT

76

Risk management is carried out by a central treasury unit with the Finance function of the Company under policies approved by the Board. The Treasury Unit identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

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

2015 2014

Carrying amount of financial instruments by category Note $’000 $’000

(a) Loans and receivables

Cash and deposits 374 361

Receivables1:

Trade receivables 5 331 535

Revenue receivables 5 - 470

Total loans and receivables 705 1,366

Total financial assets 705 1,366

(b) Financial liabilities at amortised cost:

Payables1:

Supplies and services 10 370 246

Loan from Wodonga Institute of TAFE with no terms 10 1,193 1,193

Total financial liabilities at amortised cost 1,563 1,439

Total financial liabilities 1,563 1,439

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).

(ii) Credit risk

Credit risk arises from the contractual financial assets of the Company, which comprise cash and deposits, and non-statutory receivables. 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.

The trade receivables balance at 31 December 2015 and 31 December 2014 do not include any counterparties with external credit ratings. Customers are assessed for credit worthiness using the criteria detailed above.

FINANCIAL REPORT


The Company minimises credit risk in relation to student loans receivable in the following ways:

• Driver Education Centre of Austrlalia Ltd does not have any student loans.

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.

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 $’000

2015

Cash and deposits 374 - - 374

Receivables - - 331 331

Total contractual financial assets 2015 374 - 331 705

2014

Cash and deposits 361 - - 361

Receivables - - 1,007 1,007

Total contractual financial assets 2014 361 - 1,007 1,368

Note

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

FINANCIAL REPORT

78

Ageing analysis of financial assets There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated.

The following table discloses the ageing analysis for the Company’s financial assets.

Carrying amount

Not past due

and not impaired

Past due but not impairedImpaired financial

assets

Total financial

assetsLess than 1 month

1-3 months

3 months – 1 year

1-5 years

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

2015 Financial assets

Receivables1:

Trade receivables 331 165 138 14 14 - - 331

Total 2015 financial assets 331 165 138 14 14 - - 331

2014 Financial assets

Receivables1:

Trade receivables 535 250 116 23 146 - - 535

Revenue receivables 470 470 - - - - - 470

Other receivables 2 2 - - - - - 2

Total 2014 financial assets 1007 722 116 23 146 - - 1007

Note


(iii) Liquidity risk

Liquidity risk is the risk that the Company would be unable to meet its financial obligations as and when they fall due. The Company 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 Company’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet.

The responsibility for liquidity risk management rests with the Company’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 Company 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;

• 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.

The Company’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 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.

FINANCIAL REPORT


Maturity analysis of financial liabilities

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

Less than 1 month

1-3 months

3 months – 1 year

1-5 years

5+ years

$’000 $’000 $’000 $’000 $’000 $’000 $’000

2015 Financial liabilities

Payables1:

Supplies and services 370 370 370 - - - -

Other payables 1,193 1,193 - - - - -

Total 2015 financial liabilities

1,563 1,563 370 - - - -

2014 Financial liabilities

Payables1:

Supplies and services 246 246 246 - - - -

Other payables 1,193 1,193 - - - - -

Total 2014 financial liabilities

1,439 1,439 246 - - - -

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).

(iv) Market 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 are primarily through foreign currency risk, interest rate risk and equity price risk. Objectives, policies and processes used to manage each of these risks are disclosed below.

The Board ensures that all market risk exposure is consistent with the 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.

FINANCIAL REPORT

80

Foreign currency risk The Company is exposed to foreign currency risk mainly through the delivery of services in currencies other than the Australian Dollar.

The Company had no delivery of services outside Australia in 2015.

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 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.

The Company 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 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.

Interest rate movements have not been sufficiently significant during the year to have an impact on the Company’s year end result.

The Company’s exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities are set out in the following financial instrument composition and maturity analysis table.

Financial instrument composition and interest rate exposure Weighted

average effective

rate

Total Carrying Amount

per Balance Sheet

Interest rate exposure

Floating interest

rate

Fixed interest rate

Non-Interest Bearing

2015 % $’000 $’000 $’000 $’000

Financial assets

Cash and deposits 1.38 374 374 - -

Receivables1:

Trade receivables 331 - - 331

Total financial assets 1.38 705 374 - 331

Financial liabilities

Payables1:

Supplies and services 370 - - 370

Other payables 1,193 - 1,193

Total financial liabilities - 1,563 - - 1,563

FINANCIAL REPORT


Weighted average effective

rate

Total Carrying Amount

per Balance Sheet

Interest rate exposure

Floating interest

rate

Fixed interest rate

Non-Interest Bearing

2014 % $’000 $’000 $’000 $’000

Financial assets

Cash and deposits 0.40 361 361 - -

Receivables1:

Trade receivables 535 - - 535

Revenue receivables 470 - - 470

Other receivables 2 - - 2

Total financial assets 0.40 1,368 361 - 1,007


Payables1:

Supplies and services 246 - - 246

Other payables 1,193 - - 1,193

Total financial liabilities - 1,439 - - 1,439

Note


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

Sensitivity analysis and assumptions 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:

• a movement of 50 basis points up and down (2014: 50 basis points up and down) in market interest rates (AUD);

FINANCIAL REPORT

82

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.

Carrying amount

Interest rate risk

- 50 basis points + 50 basis points

Result Equity Result Equity

31 December 2015 $’000 $’000 $’000 $’000 $’000

Contractual financial assets

Cash and deposits 374 (2) (2) 2 2

Receivables 1 331 - - - -

Total increase/(decrease) in financial assets 705 (2) (2) 2 2

Contractual financial liabilities

Payables 1 1,563 - - - -

Total increase/(decrease) in financial liabilities

1,563 - - - -

Total increase/ (decrease) 2,268 (2) (2) 2 2

Carrying amount

Interest rate risk

- 100 basis points + 100 basis points

Result Equity Result Equity

31 December 2014 $’000 $’000 $’000 $’000 $’000

Contractual financial assets

Cash and cash equivalents 361 (2) (2) 2 2

Receivables 1 1,007 - - - -

Total increase/(decrease) in financial assets 1,368 (2) (2) 2 2

Contractual financial liabilities

Payables 1 1,439 - - - -

Total increase/(decrease) in financial liabilities

1,439 - - - -

Total increase/ (decrease) (71) (2) (2) 2 2

Note


(v) Funding risk

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 Company 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 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.

FINANCIAL REPORT


(vi) Fair value estimation

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 Company 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 Company 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:

2015 2014

Carrying Amount

Net Fair Value

Carrying Amount

Net Fair Value

$’000 $’000 $’000 $’000

Financial assets

Cash and deposits 374 374 361 361

Receivables1:

Trade receivables 331 331 535 535

Revenue receivables - - 470 470

Other receivables - - 2 2

Total financial assets 705 705 1,368 1,368


Payables1:

Supplies and services 370 370 246 246

Other payables 1,193 1,193 1,193 1,193

Total financial liabilities 1,563 1,563 1,439 1,439

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 Company did not have any financial instruments that are measured subsequent to initial recognition at fair value as at 31 December 2015.

FINANCIAL REPORT

84

NOTE 18. RESPONSIBLE PERSONS AND EXECUTIVE OFFICERS

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.

(i) Minister

The relevant Minister is The Hon. Steven Herbert, MP, Minister for Training and Skills.

Remuneration of the Minister for Higher Education and Skills is disclosed in the financial report of the Department of Premier and Cabinet. Other relevant interests are declared in the Register of Members interests which is completed by each member of the Parliament

(ii) Chief executive officer (accountable officer)

Mark Dixon Appointed 04.05.2015 to current

Bryan Blake (acting) Appointed 14.11.2014 until 01.05.2015 (acting)

Remuneration received or receivable by the chief executive officer in connection with the management of the Company during the reporting period was in the range:

Mark Dixon $140,000-$149,999 Bryan Blake $70,000 - $79,999

(iii) Members of the board

Chair Ministerial Nominee Director - Ulf Ericson Appointed 01.06.2014 to 30.06.2016

Ministerial Nominee Director Deputy Chair - Colin Elliott Appointed 01.09.2013 to 30.06.2016

Ministerial Nominee Director - Angela Avery (not eligibile for remuneration) Appointed 01.09.2013 to 31.05.2015

Ministerial Nominee Director - Jessica Furst Appointed 01.09.2013 to 31.05.2015 Appointed 01.06.2015 to 31.08.2015 Appointed 16.09.2013 to 30.06.2016

Ministerial Nominee Director - Kay Thawley Appointed 14.07.2014 to 30.06.2016

Board Nominee Director - Nicki Melville Appointed 01.09.2013 to 31.05.2015

Board Nominee Director - Roger Powell Appointed 01.09.2013 to 30.06.2016

Board Nominee Director - Stuart St. Clair Appointed 01.06.2013 to 31.05.2015

FINANCIAL REPORT


Board Nominee Director - Tony Whiting Appointed 06.10.2014 to 30.06.2016

Board Nominee Director - Catherine Prichard Appointed 01.12.2015 to 30.06.2016

Board Nominee Director - Allison Jenvey Appointed 01.12.2015 to 30.06.2016

Board Nominee Director - Kerry Grigg Appointed 01.12.2015 to 30.06.2016

Remuneration of the board members in connection with the management of the Company are disclosed below.

2015 No.

2014 No.

Income range

The number of board members whose total remuneration from the Company was within the specified income bands are as follows:

Less than $10,000 6 5

$10,000 - $19,999 4 6

$20,000 - $29,999 1 1

$40,000 - $49,999 1 -

Total number of board members 12 12

Total remuneration of board members ($’000) 155 136

2015 2014

$’000 $’000

Related party transactions

Anthony Brandt

Purchase or sale of goods and services (Anthony Brandt Legal Services) - 23

Total amount - 23

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

(iv) Executive officers

The following persons also had authority and responsibility for planning, directing and controlling the activities of the Company during the financial year:

Bryan Blake - Chief Executive Officer (acting from 17/11/2014 until 1/5/2015)

Mark Dixon - Chief Executive Officer (from 4/5/2015)

Bryan Blake - Executive Director for Education, Training & Business Development (from 4/5/2015)

Thomas Lawson - Executive Director for Education, Training & Business Development (acting from 14/11/2014 until 3/7/2015)

Les Burr - Executive Director for Learning Innovation and Organisational Development

Donna Guille - Executive Director Finance and Resources

FINANCIAL REPORT

86

Remuneration of executive officers 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.

Several factors affected total remuneration payable to executives over the year. Some Executives operated in acting positions for part of the year at a higher remuneration rate, and some only began employment part way through the year.

Total Remuneration

Base Remuneration

2015 No.

2014 No.

2015 No.

2014 No.

Income range

The number of executive officers whose total remuneration from the Company exceeded $100,000, separately identifying base remuneration and total remuneration, disclosed within the income band of $10,000 in a table format:

$130,000 - $139,999 - - 1 -

$140,000 - $149,999 1 - 2 -

$150,000 - $159,999 - - 1 1

$160,000 - $169,999 2 1 - 1

$180,000 - $189,999 - 1 - 1

$190,000 - $199,999 1 - - 1

$200,000 - $209,999 - 1 - -

$280,000 - $289,999 - 1 - -

Total number of executive officers 4 4 4 4

Total annualised employee equivalent (AEE) 4 4 4 4

Total amount of remuneration ($’000) 679 836 592 699

Remuneration of Executive Officers whose total remuneration was less than $100,000 during the reporting period: Other than those Executive officers whose remuneration is disclosed in the table above, there was 1 executive officer for whom remuneration disclosure is required, whose remuneration was less than the reportable threshold of $100,000 because they held the office for only part of the year. This officer was acting in the role while the executive officer that normally hold that role was acting in a higher role until the position was filled permanently. The total remuneration of the acting Executive Officer was $76,072. In 2014 there were no executive officers with remuneration below the $100,000 threshold.

FINANCIAL REPORT


NOTE 19. REMUNERATION OF AUDITORS

Company

2015 2014

$’000 $’000

Remuneration of Victorian Auditor General’s Office for:

Audit of the financial statements 23 23

Total remuneration of Victoria Auditor General’s Office 23 23

Remuneration of other auditors

Other non-audit services - Internal Audits - 6

Total remuneration of other auditors - 6

Total Remuneration of auditors 23 29

NOTE 20. RELATED PARTIES

Key management personnel Related parties disclosures are set out in Note 18 (Responsible persons and executive officers).

Transactions with related parties The following transactions occurred with related parties:

2015 2014

$’000 $’000

Sale of goods and services

Fee for Service Government 5,110 4,471

FFS Other 2,705 3,294

Total sale of goods and services 7,815 7,765

Purchase of goods and services

Goods and Services - Other related parties - 23

Contract Services 2,606 3,758

Salary Hire 5,988 6,149

Total purchase of goods 8,594 9,930

Loans from Wodonga Institute of TAFE

Beginning of the year 1,193 1,192

Loans advanced - 1

End of year 1,193 1,193

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.

FINANCIAL REPORT

88

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

2015 2014

$’000 $’000

Current receivables (sale of goods and services)

Parent entity - 186

Total current receivables - 186

Current payables (purchases of goods)

Parent entity 260 -

Total Current payables 260 -

Non-current payables (loans)

Parent entity 1,193 1,193

Total non-current payables 1,193 1,193

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.

NOTE 21. SUBSEQUENT EVENTS

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 22. ECONOMIC DEPENDENCY

Wodonga Institute of TAFE The Company receives operating and capital contributions from the State Government via Higher Education and Skills Group under the operation of the Technical and Further Education system. Driver Education Centre of Australia Ltd is dependent upon Higher Education and Skills Group to provide grant and VTG funding, which is accessed through Wodonga Institute of TAFE as the parent entity and Registered Training Organisation contract. Furthermore, under a Memorandum of Understanding with Wodonga Institute of TAFE, Driver Education Centre of Australia Ltd is also dependent upon Wodonga Institute of TAFE for providing Fee for Service revenue as well as working capital loans in order to meet its financial obligations. A letter of support by Wodonga Institute of TAFE has been issued to the Company. The Company has been able to pay its debts as they fall due to Wodonga Institute of TAFE and is considered to be a going concern in its own right.

NOTE 23. COMPANY DETAILS

The registered office of the Company is:

Driver Education Centre of Australia Ltd 29-45 Millers Rd, Altona North, VIC. 3025

The principal place of business is: Driver Education Centre of Australia Ltd 29-45 Millers Rd, Altona North, VIC. 3025

FINANCIAL REPORT


DISCLOSURE INDEX

Item

No.

Source

referenceSummary of Reporting Requirement Page No.

REPORT OF OPERATIONS

CHARTER AND PURPORSE

1 FRD 22G Manner of establishment and the relevant Minister iii, 3, 84

2 FRD 22G Purpose, functions, powers and duties linked to a summary of activities, programs and achievements 3-16

3 FRD 22G Nature and range of services provided including communities served 5-7

MANAGEMENT AND STRUCTURE

4 FRD 22G Organisational structure and chart, including responsibilities 24

5 FRD 22G Names of Board members19-23,

84-85

FINANCIAL AND OTHER INFORMATION

6 FRD 03A Accounting for Dividends N/A

7 FRD 07A Early adoption of authoritative accounting pronouncements 61-65

8 FRD 10 Disclosure Index 89-93

9 FRD 17B Long Service leave and annual leave for employees N/A

10 FRD 20A Accounting for State motor vehicle lease arrangements prior to 1 Feb 2004 N/A

11 FRD 22G Operational and budgetary objectives, performance against objectives and achievements 16, 37-38

12 FRD 22GOccupational health and safety statement including performance indicators, performance against those indicators. Reporting must be on the items listed at (a) to (e) in the FRD

11

13 FRD 22G

Workforce data for current and previous reporting period including a statement on employment and conduct principles and that employees have been correctly classified in the workforce data collections

10-13

14 FRD 22G Summary of the financial results for the year including previous 4 year comparisons 16

15 FRD 22G Significant changes in financial position 16, 30

16 FRD 22GKey initiatives and projects, including significant changes in key initiatives and projects from previous years and expectations for the future

6-7

17 FRD 22G Post-balance sheet date events likely to significantly affect subsequent reporting periods 30

FINANCIAL REPORT

90

18FRD 22G Summary of application and operation of the Freedom of

Information Act 198228

19 FRD 22G Discussion and analysis of operating results and financial results 16

20 FRD 22G Significant factors affecting performance 16, 30

21 FRD 22G

Where a TAFE has a workforce inclusion policy, a measurable

target and report on the progress towards the target should

be included

N/A

22 FRD 22G

Schedule of any government advertising campaign in excess of

$100,000 or greater (exclusive of GST) include list from

(a) – (d) in the FRD

N/A

23 FRD 22G Statement of compliance with building and maintenance provisions of the Building Act 1993 28

24 FRD 22G Statement, where applicable, on the implementation and compliance with the National Competition Policy 28

25 FRD 22G Summary of application and operation of the Protected Disclosure Act 2012 29

26 FRD 22G and FRD 24C

Summary of Environmental Performance including a report on office based environmental impacts 10

27

FRD 22G

Consultants:

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

1. Total number of consultancies of $10,000 or more (excluding GST)

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

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

AND for each consultancy more than $10,000, a schedule is to be published on the TAFE institute website listing:

• Consultant engaged

• Brief summary of project

• Total project fees approved (excluding GST)

• Expenditure for reporting period (excluding GST)

• Any future expenditure committed to the consultant for the project

28

28

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

28

29FRD 22G List of other information available on request from the

Accountable Officer, and which must be retained by the Accountable Officer (refer to list at (a) – (l) in the FRD)

30

30 FRD 25B Victorian Industry Participation Policy Disclosures N/A

FINANCIAL REPORT


31 FRD 26AAccounting for VicFleet motor vehicle lease arrangements on or

after 1 February 2004 N/A

32 FRD 29A

Workforce Data Disclosures on the public service

employee workforce.

Note: TAFEs can report on a calendar year basis (ie not

financial year basis).

12-13

33 SD 4.5.5(a) Provide an attestation that risk identification and management is consistent with AS/NZS ISO31000:2009 or equivalent 29

34 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, together with highlights and future initiatives

1-30

35 SD 4.2(h) The Report of Operations must be prepared in accordance with requirements of the relevant Financial Reporting Directions 36, 41

36 SD 4.2(j) The Report of Operations must be signed and dated by a member of the Responsible Body iii, 41

37CG 10

(clause 27)Major Commercial Activities 30

38CG 12

(clause 33)Controlled Entities 48

FINANCIAL REPORT

FINANCIAL STATEMENTS REQUIRED UNDER PART 7 OF THE

FINANCIAL MANAGEMENT ACT 1994

39 SD 4.2(a)

The financial statements must be prepared in accordance with:

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

• Financial Reporting Directions; and business rules.

36, 41,

46

40 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.

42

43

44

44

46-88

FINANCIAL REPORT

92

OTHER REQUIREMENTS UNDER STANDING DIRECTION 4.2/

FINANCIAL MANAGEMENT ACT 1994 (FMA)

41SD 4.2(c) and

FMA s 49

The financial statements must contain such information as required by the Minister and be prepared in a manner and form approved by the Minister. They must be signed and dated by the Accountable Officer, CFAO and a member of the Responsible Body, in a manner approved by the Minister, 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).

41

42 SD 4.2(d) Rounding of amounts 61

43 SD 4.2(e)Review and recommendation by Audit Committee or

responsible body prior to finalisation and submission41

OTHER REQUIREMENTS AS PER THE FINANCIAL REPORTING DIRECTIONS IN NOTES TO

THE FINANCIAL STATEMENTS

44 FRD 11A Disclosure of ex-gratia payments N/A

45 FRD 21B

Disclosures of Responsible Persons, Executive Officer and

Other Personnel (Contractors with significant management

responsibilities) in the Financial Report

84-86

46 FRD 102 Inventories 56, 68

47 FRD 103F Non-financial physical assets56-57,

69-71

48 FRD 104 Foreign currency 60

49 FRD 105A Borrowing costs 59, 73

50 FRD 106 Impairment of assets 52-58

51 FRD 107A Investment properties N/A

52 FRD 109 Intangible assets 58, 72

53 FRD 110 Cash flow statements 44

54 FRD 112D Defined benefit superannuation obligations 51

55 FRD 113AInvestment in subsidiaries, jointly controlled entities

and associatesN/A

56 FRD 114AFinancial instruments – general government entities and public

non-financial corporations75-83

57 FRD 119A Transfers through contributed capital 44, 60

58 FRD 120IAccounting and reporting pronouncements applicable to the

reporting period 61-65

FINANCIAL REPORT


COMPLIANCE WITH OTHER LEGISLATION, SUBORDINATE INSTRUMENTS AND POLICIES

59 Legislation

The TAFE institute Annual Report must contain a statement that it complies with all relevant legislation, and subordinate instruments, (and which should be listed in the Report) including, but not limited to, the following:

• Education and Training Reform Act 2006 (ETRA)

• TAFE institute constitution

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

• TAFE institute Commercial Guidelines

• TAFE institute Strategic Planning Guidelines

• Public Administration Act 2004

• Financial Management Act 1994

Freedom of Information Act 1982

• Building Act 1993

• Protected Disclosure Act 2012

• Victorian Industry Participation Policy Act 2003

30

60 ETRA s3.2.8 Statement about compulsory non-academic fees, subscriptions and charges payable in 2015 30

61 Policy Statement that the TAFE institute complies with the Victorian Public Sector Travel Principles 30

62Key Performance

Indicators

See table on page 6 of the guidelines for required formatting.

Institutes to report against:

• KPIs set out in the annual Statement of Corporate Intent; and

• Employment costs as a proportion of training revenue;

• Training revenue per teaching FTE;

• Operating margin percentage;

• Training Revenue diversity.

37-38

OVERSEAS OPERATIONS OF VICTORIAN TAFE INSTITUTES

63

PAEC andVAGO

(June 2003 Special Review item 3.110)

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

• Nature of strategic and operational risks for overseas operations

• Strategies established to manage such risks of overseas operations

• Performance measures and targets formulated for overseas operations

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

N/A

FINANCIAL REPORT

Quality ISO 9001

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