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2016 Annual Report CONTROLLED ENTITIES


Financial Statements UNIVERSITY OF WOLLONGONG’S CONTROLLED ENTITIES The Financial Statements of the University of Wollongong’s Controlled Entities are presented here to meet Section 7 (1)(a)(1a) of the Annual Reports (Statutory Bodies) Act 1984 (NSW). The 2016 University of Wollongong Annual Report is contained in a separate edition and can be viewed on the University’s website at: www.uow.edu.au/about/ For more comprehensive information on each of the Controlled Entities we encourage you to view their individual annual reports as prepared and presented to the University of Wollongong Council and New South Wales Parliament in June of each year. Contents 1. UOW Enterprises Group of Companies a. UOWD Limited b. UOWC Limited c. Community College of City University Limited d. CCCU Deed of Trust 2. UOW Pulse Limited (Previously Wollongong UniCentre Limited) 3. University Recreation & Aquatic Centre Limited 4. Sydney Business School Pty Limited 5. The University of Wollongong USA Foundation


UOW Enterprises Group of Companies UOWD Limited UOWC Limited Community College of City University Limited CCCU Deed of Trust

Financial Statements For the Year Ended 31 December 2016


UOW Pulse Limited Previously Wollongong UniCentre Limited

Financial Statements For the Year Ended 31 December 2016


2016 ANNUAL REPORT

ABN 28 915 832 337

ACN 081 114 089


CONTENTS Directors’ Report

3

Independent Auditor’s Report

10

Auditor’s Independence Declaration

12

Directors’ Declaration

13

Statement of Comprehensive Income

14

Statement of Financial Position

15

Statement of Changes in Equity

16

Statement of Cash Flows

17

Notes to the Consolidated Financial Statements

18

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DIRECTORS’ REPORT Through 2016 UOW Pulse Ltd continued to provide high quality services and support to the University of Wollongong (UOW) Campus Communities. On 23 August, 2016 a General Meeting, was held where a new company name was adopted, changing from Wollongong UniCentre Limited to UOW Pulse Limited.

BOARD OF DIRECTORS Sue Chapman Chair of the UOW Pulse Ltd Board Since October 2016 Sue has had a long career as a senior executive in the ACT and NSW governments, the most recent being the Deputy Director- General of the Community Services Directorate in the ACT. She has held senior positions in the Australian Department of Human Services and the Attorney-General’s Department while based in Canberra, and has also worked in the private sector for 7 years as the CEO and Managing Director of NCS International based in Sydney. Sue was the Deputy Principal and Registrar of the University of Sydney for a number of years so has a good understanding of the University sector. A Graduate of UOW with both MBA & BA, Sue is also a graduate of the Australian Institute of Company Directors and an executive fellow of ANZOG. Sue has had a long association with UOW, having been a member of Council for 11 years and Deputy Chancellor for two years. Sue has considerable board experience and is currently an independent member of the Audit and Risk Committee for the Education Directorate in the ACT.

Melva Crouch, CSM UOW Chief Administrative Officer Executive Chair to October 2016 Executive Director Since August 2013 Melva has extensive experience as a logistics and corporate support executive in complex organisations. She commenced her career with the Australian Army as a logistics officer, serving for 23 years in a variety of Army and joint Defence roles culminating with the position of Head of Logistics and Administration at Joint Operations Command at the rank of Colonel. Melva left the Army in 2005 to join the United Nations, subsequently providing logistic support to peacekeeping missions in Democratic Republic of Congo, Liberia and Western Sahara. After five years in the field, she moved to New York to take on more strategic administrative roles with the United Nations. Prior to joining the University of Wollongong she held the position of Director of Facilities and Commercial Services Division in the Department of Management, managing the office and conference facilities of the United Nations Headquarters and providing common support functions to the Secretariat. Melva exercises executive oversight of support services to the University, including staff and student administration, student residences, construction and maintenance of campus facilities, advancement and governance. Melva is secretary to the University of Wollongong Council.

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Mary Youssif B.Com, M.Stud.Accy, FCPA, AGIA, RTA, MAMI, MAICD Non Executive Director Director Since August 2004 Mary has held various senior and executive positions within the Coal Mining and Chemical Manufacturing Industries for 15 years. She also worked for the University of Wollongong between 1993 and 2001 in Chief Accountant and Project Management positions. During that time she was the Vice-Chancellor’s representative on the UniCentre’s Children’s Services Management Committee. Currently she operates her own accounting practice locally. Mary has been a director on the Board of Community Alliance Credit Union (The Illawarra Credit Union) for the past 25 years and served as Chair of the Board from 2008 to 2014 and is currently the Chair of the Risk Committee. During this time, she formed and Chaired the Audit Committee, was on their Strategic Planning Committee for 4 years (Chair for one year), and the Governance Committee for 6 years (Chair for 2 years). As a former student and employee of the University of Wollongong, Mary brings extensive financial and business knowledge together with an understanding of the UOW Pulse and the Environment in which it operates. Mary is a University of Wollongong appointed Director to UOW Pulse.

Sarah Lisle Non Executive Director Director Since October 2015 Sarah Lisle has worked at the University of Wollongong (UOW) since 2012. Her current role is Community Engagement Coordinator within the Advancement Division; where she is responsible for key strategic programmes, utilising her extensive skills in stakeholder management, connecting communities and project management. Sarah has worked in the not-for-profit sector in both the UK and Australia for over 15 years. With a business head and compassionate heart Sarah strives to ensure clear communication, striking harmony in the workplace and developing business opportunities. Sarah is currently undertaking her Executive Masters Business Administration (EMBA) through UOW’s Sydney Business School.

Daniel Crameri Non Executive Director Director Since October 2015 Completing his Bachelor in 2013 Daniel has returned to UOW to study a Master of Business. Spending 6 years as an undergraduate, Daniel is well versed in all aspects of the student experience. Passionate about building community ideals, he wants to help drive Unicentre to succeed in its mission of enhancing the University experience for all students. Daniels vision for student culture is one of participation and involvement, throughout and beyond a student’s time at UOW.

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Murray Reid Non Executive Director Director Since April 2016 Murray is a long-term resident of Wollongong. Attending the University of Wollongong after high school he completed a Bachelor of Commerce degree in 1986 and went on to qualify as a Chartered Accountant in 1987. He has worked in public practice for over 25 years and has been a partner in practice since 1992. He has held various directorships over that period including a major local financial institution and is currently a director of the Wollongong Golf Club Ltd. In 1998 he was appointed an initial director of the University Recreation and Aquatic Centre Ltd and in April 2016 he became an appointed director of UOW Pulse. He brings a wealth of financial and business experience to the Board.

Mike Gillmore Executive Director, Company Secretary, General Manager Executive Director January 2009 - December 2016 As Executive Director and General Manager, Mike’s responsibility is across the direction and accountability for entity. Prior to this role Mike was General Manager for the UOW Accommodation Services Division for 4 years and before that worked in the Facilities Management Division since 1997. Mike’s experience before coming to the University of Wollongong was in the Hospitality and Support Services sectors providing hospitality based services to commercial organisations, major sporting/leisure venues as well as 4 and 5 star Hotels in Sydney and the ACT. Through UOW Pulse’s membership of the Tertiary Access Group Buying Cooperative, Mike was an elected Board Director of the group, and was nominated Treasurer in November 2014.

Jo Fisher Non Executive Director Director August 2007 - December 2016 Jo is the instore merchandiser for the Unishop. She has been employed with Unicentre since 1993. Jo has studied in Welfare and Librarianship. She has written articles for Bookseller and Publisher magazine. Jo has 5 children, all of whom attend or have attended Kids Uni. Jo is also a UOW Cares champion and a member of the Ally network on campus and a member of Women on Boards

Samuel Tedeschi Non Executive Director Director October 2014 - December 2016 Sam is an undergraduate student in the final year of a Bachelor of Arts degree. Sam moved from regional NSW to Wollongong in 2013 to attend University. He holds executive positions with several Clubs and Societies on campus and is a founding member of the UOW Music Society. Sam has been active in student representation at UOW for several years. He is currently serving as the President of the Wollongong Undergraduate Students’ Association (WUSA) and is a member of the Student Representative Forum and the Student Engagement Advisory Group. In addition to his University commitments, Sam works for the NSW Parliament and teaches guitar. Sam brings enthusiasm, dedication and commitment to students’ interests to the Board

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Tarrant Sewell Non Executive Director Director October 2013 - December 2016 Tarrant is studying Bachelor of Economics and Finance / Bachelor of Laws. Throughout the course of his degree he has also been working fulltime as a Law Clerk at Stacks Heard McEwan and General Manager of Wollcom Credit Management Services. Currently, Tarrant is working towards completing his tertiary studies at the end of 2016 and being admitted by the Law Society of NSW as a Solicitor in mid-2017.

Thomas Quinn Non Executive Director Director October 2014 - December 2016 Thomas studying his Masters in International Business, having just completed his undergraduate degrees in Commerce and Arts at UOW. After Studying for 4 years, Tom has developed extensive experience in navigating the challenges faced by many UOW students. After participating in the organisation Alive and S4S Leadership programs, Tom increased his involvement with the organisation and now facilitates these and other programs for new and/ or current students. His most recent activities include tutoring on campus with the Faculty of Business and pursing a PHD. Complementing his on - campus activities Thomas has nine years of experience in providing high level strategic, administration and retail support in the Illawarra, ACT and Sydney.

Walter Immoos Non Executive Director Director August 2010 - April 2016 Walter commenced his career in 1969 as an apprentice chef. He worked in various hotels through Europe in the kitchen until 1978. Walter attended hotel school in Lausanne, Switzerland & completed his hotel management diploma. Walter has worked for nearly all major hotel brands including the Hilton, Westin, Sun International and Holiday Inn. He came to Australia in 1989 to open Peppers on Sea Terrigal. Walter then converted this property to the very first Crown Plaza brand in Australia. In 1994 he then transferred to the Holiday Inn Menzies, which he converted to All Seasons Premier Menzies in 1996. In 2000 ACCOR bought the All Seasons group and hence, Walter commenced his career with ACCOR. During that year the Menzies was the official family hotel for the Olympic Games. At the end of 2005 Walter transferred to the Novotel Wollongong Northbeach as General Manager, he then resigned from this position at the end of 2014. Walter’s interests include art, history, tennis and golf.

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BOARD OF DIRECTORS The following corporate governance practices were in place throughout the financial year. There were six meetings of the Board during 2016. The number of Board meetings attended by directors is detailed below. The Board is responsible for the overall Corporate Governance of UOW Pulse Ltd, including: • strategic direction;

The Board has an approved Corporate Governance Manual. This document outlines in detail the Rights and Responsibilities of Directors, and requires that directors uphold the Australian Institute of Directors Code of Conduct. It also states the requirements for ethical conduct within the organisation, and disclosure of pecuniary interests on appointment and annually. Directors are offered external training and development activities, primarily through Australian Institute of Company Directors..

• establishing goals for management; • monitoring organisational performance; and • ensuring that stewardship frameworks are in place.

DIRECTORS MEETING ATTENDANCE Board

Audit & Risk Management

Services

A

B

A

B

A

B

Melva Crouch

6

6

-

-

-

-

Sue Chapman

2

2

-

-

-

-

Mike Gillmore

5

5

4

4

4

5

Jo-Ann Fisher

5

6

-

-

1

5

Mary Youssif

6

6

4

4

-

-

Walter Immoos

2

2

-

-

2

2

Murray Reid

4

4

1

1

3

3

Samuel Tedeschi

6

6

4

4

4

5

Tarrant Sewell

2

6

2

4

-

-

Thomas Quinn

4

6

2

2

1

3

Sarah Lisle

6

6

2

4

-

-

Daniel Crameri

6

6

4

4

2

5

A = Number of meetings attended. B = Reflects the number of meetings held during the time the director held office during the year.

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INSURANCE OF DIRECTORS AND OFFICERS During the financial year a premium to insure directors and officers of the company was paid by the University of Wollongong, to the amount of $35,200 per S300 (1)g, 300(8) and 300(9). The liabilities insured include costs and expenses that may be brought against the directors and officers in their capacity as directors and officers of the company.

FINANCIAL PERFORMANCE 2016 $

2015 $

Revenue

20,597,158

19,873,643

Operating result for the year

(385,756)

(242,753)

Retained earnings at the beginning of the financial year

9,039,930

9,282,683

Retained earnings at the end of the financial year

8,654,174

9,039,930

PRINCIPLE ACTIVITIES

RISK MANAGEMENT

The Company’s principal activities are the operation of commercial activities on the University of Wollongong Campuses including Food, Beverage and Coffee Services, Functions & Events, UniBar, UniShop, Child Care, Post Office, to support noncommercial Student Engagement activities and provide high level social experiences within modern facilities.

The CEO oversees a range of risk management strategies on behalf of the Board of Directors. A Risk Assessment Program, conducted through the first half of 2015, identified key areas of risk and mitigation to create a new Risk Assessment Profile – which has been shared with the University’s Risk Audit & Compliance Committee. The risk, mitigation strategies and status reports on action plans are embedded in quarterly reporting processes to the Audit & Risk Management Committee as well as reported to the Board. Other specific arrangements include: Review by the Board of the annual budget and regular financial performance reviews.

AUDIT PROCESS As a controlled entity of the University of Wollongong, the external auditors are The Audit Office of NSW and their agents. The Audit and Risk Management Committee advises the Board on the external audit program and outcomes. As a part of its process the committee requires:

• Review by the Board of the annual budget and regular financial performance reviews. • A comprehensive Insurance Program.

• The attendance of The Audit Office of NSW representatives at meetings where their reports are considered.

• Policies to ensure that capital expenditure commitments above a certain limit are authorised by the Board.

• A formal sign-off from management to the Board, on the accuracy of financial position and performance statements.

• Work Health and Safety reviews of the workplace in accordance with the relevant legislation.

• A procedure of absenting senior managers during Audit meetings.

INTERNAL CONTROL FRAMEWORK To assist in the discharge of its responsibilities for the internal control framework the Board uses Internal Auditors KPMG to ensure compliance with internal controls.

DELEGATION OF AUTHORITY The Board has, under section 198D of the Corporations Act, defined delegations of authority to individuals and committees. These delegations are recorded in the Governance Manual and cover:

BOARD COMMITTEES The Board has the following advisory committees: • Services Committee • Audit and Risk Management Committee • Children’s Services Consultative Committee • Student Engagement Advisory Group

DIVIDENDS Dividends are not payable by companies limited by guarantee, such as UOW Pulse Ltd.

• Property, Plant and Equipment

STATE OF AFFAIRS

• Authority to Enter Contracts

There were no significant changes to the scope of operating activities of UOW Pulse Ltd during 2016.

• Staff and Organisation • Operating Expenditure • Financial Administration • Sponsorship and Donation

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EVENTS SUBSEQUENT TO BALANCE DATE There were no events subsequent to the balance date.

LIKELY DEVELOPMENTS On 1 January 2017, UOW Pulse Ltd will receive the net assets of the University of Wollongong Recreation and Aquatic Centre Limited less the debt forgiven by the parent entity.

AUDITOR’S INDEPENDENT DECLARATION A copy of the Auditor’s Independence Declaration as required under Section 307c of the Corporations Act 2001 is set out on page 12.

FINANCIAL OUTCOMES The financial result for 2016 was an operating deficit of $385,756. Revenue increased to $20,597,158, which represents an increase of 3.6%. This growth represents a healthy campus market which provides opportunity for improved financial return. The operating result was underpinned by deficits to the newly opened IGA Supermarket on the main campus and The Terrace Restaurant. Other trading units that did not meet financial expectations include UniShop, Eleven and Tenancy. Events & Venues improved their result materially from the previous year with revenue increasing by 18%. Child Care, UniBar and Cafes continued to perform well. The Centre for Student Engagement unit continued to provide programs across the various UOW campuses with 368 events involving 52,521 participants. General overheads were within financial expectations and budget despite the organisation increasing the services provided to the campus with increased retail outlets. Increased campus population and revenue combined with business maturity of trading units will provide the basis for an improved financial return in the new year.

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Statement of Comprehensive Income For the Year Ended 31 December 2016

2016 Revenue from continuing operations Gain/(loss) on disposal of assets Raw materials and consumables used Employee related expenses Depreciation and amortisation expense Other expenses Finance costs Operating Result before income tax Income tax expense Operating Result for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year

Note 3 4 5(a) 5(b) 5(c)

1(d)

2015

$ 20,597,158 (72,652) (6,472,859) (10,714,861) (959,424) (2,761,518) (1,600)

$ 19,873,643 (2,424) (6,456,318) (9,735,447) (1,024,245) (2,876,062) (21,900)

(385,756) -

(242,753) -

(385,756)

(242,753)

-

-

(385,756)

(242,753)

2

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Statement of Financial Position As at 31 December 2016

Note

2016

2015

$

$

ASSETS Current assets Cash and cash equivalents Trade and other receivables Inventories Other non-financial assets

2,140,414 1,240,425 2,069,036 203,256

2,382,694 725,542 2,019,364 41,931

5,653,131

5,169,531

5,556 1,938,895 5,057,549

38,889 2,336,937 5,385,029

7,002,000

7,760,855

12,655,131

12,930,386

2,675,823 840,784 304,977

2,477,397 126,672 895,083 214,234

3,821,584

3,713,386

179,373 -

169,570 7,500

179,373

177,070

Total liabilities

4,000,957

3,890,456

Net assets

8,654,174

9,039,930

8,654,174

9,039,930

8,654,174

9,039,930

6 7 8 9

Total current assets Non current assets Other non-financial assets Property, plant and equipment Intangible assets

9 10 11

Total non current assets Total assets LIABILITIES Current liabilities Trade and other payables Borrowings Provisions Other liabilities

12 13 14 15

Total current liabilities Non current liabilities Provisions Other liabilities

14 15

Total non current liabilities

EQUITY Retained earnings Total equity

16

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Statement of Changes in Equity For the Year Ended 31 December 2016

2015 Retained Earnings Note Balance at 1 January 2015 Total comprehensive income for the year

16

Balance at 31 December 2015

$ 9,282,683 (242,753) 9,039,930

2016 Retained Earnings Note Balance at 1 January 2016 Total comprehensive income for the year Balance at 31 December 2016

16

$ 9,039,930 (385,756) 8,654,174

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Statement of Cash Flows

For the Year Ended 31 December 2016

Note CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers Payments to suppliers and employees Interest received Interest paid

2016

2015

$

$

21,364,944 (21,225,934) 71,536 (1,600)

20,952,138 (19,953,026) 79,737 (21,900)

208,946

1,056,949

CASH FLOWS FROM INVESTING ACTIVITIES: Payments for property, plant and equipment Payments for intangibles

(295,254) (11,300)

(647,351) (85,806)

Net cash used in investing activities

(306,554)

(733,157)

CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of borrowings

(144,672)

(458,000)

Net cash used in financing activities

(144,672)

(458,000)

Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of year

(242,280) 2,382,694

(134,208) 2,516,902

2,140,414

2,382,694

Net cash flows from operating activities

24

Cash and cash equivalents at the end of the year

6

5

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Notes to the Financial Statements For the Year Ended 31 December 2016

1

Summary of Significant Accounting Policies UOW Pulse Limited (the "Company") is a company limited by guarantee incorporated and domiciled in Australia. If the Company is wound up, each 'member' is liable to contribute a maximum of $1.00 towards the costs, charges and expenses of winding up the Company and payment of debts and liabilities of the Company. The address of the Company's registered office is Northfields Avenue, North Wollongong NSW 2500. The financial statement covers UOW Pulse Limited for the year ended 31 December 2016. The nature of the operations and principal activities of the Company are providing services primarily to students including childcare, entertainment, student engagement activities, retail and food services. The University Council on the 22 April 2016 approved the restructure of University of Wollongong Recreation & Aquatic Centre Limited and Wollongong Unicentre Limited into a single entity UOW Pulse Limited effective from the 1 January 2017. The Council approved the transfer of URAC's existing activities and operations into UOW Pulse Limited on this restructure. On the 19 August 2016 the University Council approved a revised constitution of Unicentre in order to expand the objectives covering the range of services and activities offered by URAC. Wollongong Unicentre Limited changed its business name to UOW Pulse Limited on the 23 August 2016. On 1 January 2017 UOW Pulse will receive the net assets of the University of Wollongong Recreation and Aquatic Centre Limited less the debt forgiven by the parent entity. (a) Basis of preparation These financial statements are general purpose financial statements, which have been prepared in accordance with Australian Accounting Standards (which includes Australian Accounting Interpretations) and other authoritative pronouncements of the Australian Accounting Standards Board, the Public Finance and Audit Act 1983 and the Corporations Act 2001. These statements were authorised for issue on the 11th of April, 2017. The financial statements are presented in Australian dollars. Compliance with Australian Charities and Not-for-profit Commission The financial statement have been prepared in accordance with the Australian Charities and Not-for-profits Commissions Act 2012. Compliance with IFRS The financial statements of the Company do not comply with IFRS because the Company has adopted the not for profit requirements of the Australian Accounting Standards which are inconsistent with IFRS requirements. Historical cost convention The financial statements have been prepared under the historical cost convention except that the liability for long service leave is adjusted to net present value. Critical accounting estimates The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may 6

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Notes to the Financial Statements For the Year Ended 31 December 2016

1

Summary of Significant Accounting Policies differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

(b) Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties. The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Company’s activities as described below. The Company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. Revenue is recognised for the major business activities as follows: (i) Sale of goods and rendering of services Revenue from the sale of goods is recognised as revenue when the significant risks and rewards of ownership have been transferred to the buyer, the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the Company. Revenue is recognised when the service is provided or by reference to the stage of completion. (ii) Lease income Lease income from operating leases is recognised as income on a straight line basis over the lease term. (iii) Interest income Interest income is recognised in the Statement of Comprehensive Income as it accrues. (iv) Dividends Dividends are recognised as revenue when the right to receive payment is established. (v) Grants and contributions Grants and contributions are generally recognised as revenues when the company obtains control over the assets comprising the contributions. Control over contributions is normally obtained upon the receipt of cash. (c) Interest costs Interest costs comprise interest payable on borrowings, which is recognised in the statement of comprehensive income as it accrues (d) Income tax The operations of the Company are exempt from income tax under Section 50-5 of the Income Tax Assessment Act (1997). The operations of the Company are exempt from payroll tax under Sections 48(2) of the Payroll Tax Act 2007.

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Notes to the Financial Statements For the Year Ended 31 December 2016

1

Summary of Significant Accounting Policies (e) Leases Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases (note 10). Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term. Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases (note 19). Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of comprehensive income on a straight line basis over the period of the lease. Lease liabilities are reduced by repayments of principal. The interest components of the lease payments are expensed. Contingent rentals are expensed as incurred. (f) Impairment of assets Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. (g) Cash and cash equivalents Cash and cash equivalents in the statement of financial position comprise cash at bank and on hand and short term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Bank overdrafts are included within interest bearing loans and borrowings in current liabilities in the statement of financial position. (h) Trade and other receivables Trade and other receivables are recognised at the original invoice amount as this is not materially different to amortised cost, given the short term nature of these receivables. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for impairment of receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The amount of the provision is recognised in the statement of comprehensive income. Debt forgiveness is recognised as the amount receivable as at the time the debt is forgiven. (i) Inventories Inventories are valued at the lower of cost and net realisable value. Costs are assigned to inventory on hand by the method most appropriate to each particular class of inventory, with the majority being valued on a weighted average cost basis. Net realisable value represents the estimated selling price in the ordinary course of business less all estimated selling costs. 8

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Notes to the Financial Statements For the Year Ended 31 December 2016

1

Summary of Significant Accounting Policies (j) Investments and other financial assets Classification Investments and financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are categorised as either financial assets at fair value through profit or loss, loans and receivables, held to maturity investments, or available for sale financial assets. The classification depends on the purpose for which the investments were acquired. Designation is re evaluated at each reporting date, but there are restrictions on reclassifying to other categories. (i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading unless they are designated as hedges. Assets in this category are classified as current assets. (ii) Loans and receivables Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after reporting date which are classified as non current assets. Loans and receivables are included in receivables in the statement of financial position. (iii) Held to maturity investments Held to maturity investments are non derivative financial assets with fixed or determinable payments and fixed maturities that the Company’s management has the positive intention and ability to hold to maturity. (iv) Available for sale financial assets Available for sale financial assets, comprising principally marketable equity securities, are non derivatives that are either designated in this category or not classified in any of the other categories. They are included in non current assets unless management intends to dispose of the investment within 12 months of reporting date. Regular purchases and sales of financial assets are recognised on trade date - the date on which the Company commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership. When securities classified as available for sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are included in the statement of comprehensive income as gains and losses from investment securities. Subsequent measurement Available for sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the statement of comprehensive income within other income or other expenses in the period in which they arise. Dividend income from financial assets at fair value through profit and loss is recognised in the statement of comprehensive income as part of revenue from continuing operations when the Company's right to receive payment is established. Fair value The fair values of investments and other financial assets are based on quoted prices in an active market. If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using valuation techniques, that maximise the use of relevant data. These include reference to the estimated price in an orderly transaction that would take place between market participants at the measurement date. Other valuation techniques used are the cost approach and the income approach based on the characteristics of the asset and the assumptions made by market participants. 9

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Notes to the Financial Statements For the Year Ended 31 December 2016

1

Summary of Significant Accounting Policies Impairment The Company assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available for sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss, is removed from equity and recognised in the statement of comprehensive income. Impairment losses recognised in the statement of comprehensive income on equity instruments are not reversed through the statement of comprehensive income in a subsequent period. (k) Property, plant and equipment (i) Owned Assets Property, plant and equipment is stated at historical cost less depreciation. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the statement of comprehensive income during the reporting period in which they are incurred. Generally property, plant and equipment and intangible assets with a greater value than $5,000 are capitalised except for computer equipment which is normally capitalised irrespective of the $5,000 threshold where it is considered to be part of a network of assets. Other property, plant and equipment items will be capitalised if they are individually less than $5,000 in value only if they collectively with other items exceed $5,000 combined and form one asset item. Depreciation is calculated on a straight line basis over the estimated useful life of the specific assets as follows: 2016 Building improvements Plant and equipment Computer equipment

5 -10 years 3 -10 years 3 - 5 years

2015 5 -10 years 3 -10 years 3 - 5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of comprehensive income. An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. (l) Intangible assets (i) Goodwill Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Company's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired. Impairment losses recognised for goodwill are not subsequently reversed.

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Notes to the Financial Statements For the Year Ended 31 December 2016

1

Summary of Significant Accounting Policies (ii) Computer Software Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. Amortisation is calculated on a straight line basis over periods generally ranging from 3 to 5 years. (iii) Occupancy Contribution The Company contributes to the cost of construction of buildings, their improvements and landscaping on land over which it has no security or tenure. These amounts are accounted for in the statement of financial position as Occupancy Contribution, pursuant to an agreement reached with the University of Wollongong. The Company has the right to occupy these buildings for the life of the asset. 2016 Occupancy Contribution

30 - 40 Years

2015 30 - 40 Years

(m) Trade and other payables Trade and other payables are stated at cost, which is considered to approximate amortised cost due to their short term nature and are recognised when the Company becomes obliged to make future payments resulting from the purchase of goods and services. (n) Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not an incremental cost relating to the actual draw down of the facility, are recognised as prepayments and amortised on a straight line basis over the term of the facility. Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non cash assets transferred or liabilities assumed, is recognised in other income or other expenses. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date and does not expect to settle the liability for at least 12 months after the reporting date. (o) Provisions Provisions for legal claims, service warranties and make good obligations are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date. The pre tax discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision resulting from the passage of time is recognised in finance costs.

11

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Notes to the Financial Statements For the Year Ended 31 December 2016

(p) Employee benefits (i) Short term obligations Liabilities for wages and salaries (including non monetary benefits) and annual leave that are due to be settled within 12 months after the end of the period in which the employees render the service are recognised and measured in respect of employees’ services up to the reporting date at undiscounted amounts based on the amounts expected to be paid when the liabilities are settled. Regardless of the expected timing of settlements, provisions made in respect of employee benefits are classified as a current liability, unless there is an unconditional right to defer the settlement of the liability for at least 12 months after the reporting date, in which case it would be classified as a non current liability. Long term annual leave that is not expected to be taken within twelve months is measured at present value in accordance with AASB 119 Employee Benefits. Unused non-vesting sick leave does not give rise to a liability as it is not considered probable that sick leave taken in the future will be greater than the benefits accrued in the future. (ii) Long service leave The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. The provision is calculated using estimated future increases in wage and salary rates including related on costs and expected settlement dates based on turnover history and is discounted using the rates attached to national government securities at reporting date which most closely match the terms of maturity of the related liabilities. Leave is charged to the provision at the time leave is taken. The provision for long service leave for the year ended 31 December 2016 was assessed by management in accordance with guidelines recommended by PricewaterhouseCoopers. The assumptions used to calculate the long service leave provision include: - Salary inflation rate per annum 3% (2015: 3%) - Discount rate 2.24% (2015: 2.6%) - Proportion of leave taken in service 18% (2015: 18%) (iii) Superannuation entitlements Contributions to employee superannuation funds are charged against income as incurred. The Company is under no legal obligation to make up any shortfall in the funds' assets to meet payments due to employees. (q) Goods and Services Tax (GST) Revenues, 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 statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. (r) New accounting standards and interpretations Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2016 reporting periods and have not yet been applied to the financial statements. The Company's assessment of the impact of these new standards and interpretations is that they will not materially affect any of the amounts recognised in the financial statements or significantly impact the disclosures in the financial statement or significantly impact the disclosures in relation to the Company. 12

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24


Notes to the Financial Statements For the Year Ended 31 December 2016

2

Financial risk management objectives and policies The Company's principal financial instruments comprise cash, investments, receivables, payables and borrowings. The Company manages its exposure to the following financial risks, including credit risk, liquidity risk and market risk relating to interest rate and equity risk in accordance with the Company's financial risk management policy. The objective of the policy is to support the delivery of the Company's financial targets whilst protecting future financial security. The Board has overall responsibility for the establishment and oversight of the risk management framework. The Board has established the Audit and Risk Management Committee, which is responsible for developing and monitoring risk management policies. The Committee reports to the Board on its activities.

(a)

Credit risk Credit risk refers to the risk that indebted counter parties will default on their contractual obligations, resulting in financial loss to the Company. Credit risk is monitored on an ongoing basis. The majority of the Company's business is conducted by cash or EFTPOS, and consequently the level of credit risk is low. In addition, the majority of trade and other debtors are with related entities. The Company does not require collateral in respect of financial assets. Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed in Note 7. Investments are allowed only in liquid securities. All funds invested are invested with the National Australia Bank. The weighted average interest rate on interest earned by the Company is 1.48% (2015: 1.86%). At reporting date there were no significant concentrations of credit risk. The maximum exposure to credit risk by class of recognised financial assets is equivalent to the carrying value and classification of those financial assets (net of any provisions) as presented in the statement of financial position. Details with respect to credit risk of trade and other receivables are provided in Note 7.

(b)

Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Company manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Maturities of financial liabilities The tables below analyse the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for all non derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. For interest rate swaps the cash flows have been estimated using forward interest rates applicable at the end of each reporting period.

13

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25


Notes to the Financial Statements For the Year Ended 31 December 2016

2

Financial risk management objectives and policies 31 December 2016

Financial assets Cash and cash equivalents Receivables Other financial assets

Average Interest Rate

Variable Interest Rate

Fixed Interest Rate

Non Interest

Less than 1 Year

1 to 5 Years

5+ Years

Total

%

$

$

$

$

$

$

$

1.48

2,140,414

-

-

2,140,414

-

-

-

-

-

1,240,425

1,240,425

-

-

1,240,425

2.65

-

120,000

-

120,000

-

-

120,000

2,140,414

120,000

1,240,425

3,500,839

-

-

3,500,839

Total Financial assets

2,140,414

Financial liabilities Payables

-

-

-

-

2,675,823

-

-

2,675,823

Borrowings- Department of Social Services

-

-

-

7,500

7,500

-

-

7,500

Total financial liabilities

-

-

-

7,500

2,683,323

-

-

Average Interest Rate

Variable Interest Rate

Fixed Interest Rate

Non Interest

Less than 1 Year

1 to 5 Years

5+ Years

Total

%

$

$

$

$

$

$

$

1.86

2,382,694

-

-

2,382,694

-

-

2,382,694

-

-

-

725,542

725,542

-

-

725,542

2,382,694

-

725,542

3,108,236

-

-

3,108,236

31 December 2015

Financial assets Cash and cash equivalents Receivables Total Financial assets Financial liabilities Payables Borrowings- Uni of Wollongong Borrowings- Department of Social Services Total Financial libilities

(c)

2,683,323

-

-

-

-

2,477,397

-

-

2,477,397

6.00

-

126,672

-

126,672

-

-

126,672

-

-

-

25,500

18,000

7,500

-

25,500

-

126,672

25,500

2,622,069

7,500

-

2,629,569

Market risk (i) Foreign currency risk The Company's only exposure to foreign currency risk is in relation to purchases of UniShop stock from overseas. These purchases are normally each less than $1,000 and in total are not material to the operations of UniShop as an individual business unit or to the Company. Sale price of these goods is set after the goods are paid for, thus the Australian Dollar amount is known, effectively passing on any foreign exchange cost or benefit to the customer.

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UOW Pulse Ltd | 2016 Annual Report

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Notes to the Financial Statements For the Year Ended 31 December 2016

2

Financial risk management objectives and policies (ii) Price risk The Company and the parent entity maybe exposed to equity securities price risk. This arises from investments that may be held by the Company and classified on the statement of financial position as fair value through profit or loss. At reporting date, the value of the securities was nil (2015: $nil). The Company is not exposed to commodity price risk. To manage its price risk arising from investments in equity securities, investments held by the Company are diversified. (iii) Cash flow and fair value interest rate risk Interest Rate Risk is limited to interest on the balance of the National Australia Bank accounts, shown as cash and cash equivalents in Note 6. The forecast at the end of 2016 is an increase or decrease of 1% based on the current Reserve Bank of Australia cash rate of 1.5%. The Company's trade and other receivables are non interest bearing and all related party loans and receivables are interest free. Interest rates on Commercial Hire Purchase finance are fixed at the time of drawdown of each individual loan within the umbrella facility. The Company's trade and other payables are non interest bearing. (iv) Summarised sensitivity analysis The following table summarises the sensitivity of the Company’s financial assets and financial liabilities to interest rate risk and price risk.

31 December 2016

Interest rate risk -1%

Price risk

+1%

-1.304%

+1.304%

Carrying amount

Profit

Equity

Profit

Equity

Profit

Equity

Profit

Equity

$

$

$

$

$

$

$

$

$

Financial assets Cash and Cash Equivalents

2,140,414

(21,404)

(21,404)

21,404

21,404

-

-

-

-

Accounts receivable

1,240,425

-

-

-

-

-

-

-

-

Financial asset - Lease Incentive Other financial assets Financial liabilities Trade payables Other financial liabilities Total increase/(decrease)

33,333

-

-

-

-

-

-

-

-

120,000

-

-

-

-

-

-

-

-

2,675,823

-

-

-

-

-

-

-

-

22,248

-

-

-

-

-

-

-

-

(21,404)

(21,404)

21,404

21,404

-

-

-

-

15

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27


Notes to the Financial Statements For the Year Ended 31 December 2016

31 December 2015

Interest rate risk -1%

Financial assets Cash and Cash Equivalents

+1.304%

Profit

Equity

Profit

Equity

Profit

Equity

Profit

Equity

$

$

$

$

$

$

$

$

$

2,382,694

(23,827)

(23,827)

23,827

23,827

-

-

-

-

725,542

-

-

-

-

-

-

-

-

33,333

-

-

-

-

-

-

-

-

2,477,397

-

-

-

-

-

-

-

-

126,672

-

-

-

-

-

-

-

-

Financial asset - Lease Incentive

Current borrowings Other financial liabilities

38,620

Total increase/(decrease)

3

-1.304%

Carrying amount

Accounts receivable Financial liabilities Trade payables

Price risk

+1%

-

-

-

-

-

-

-

-

(23,827)

(23,827)

23,827

23,827

-

-

-

-

Revenue From continuing operations

Sales revenue - Sale of goods - Provision of services

Other revenue - Interest - Rental income - Grants received - related parties - Other income

2016

2015

$

$

12,879,043 6,171,767

12,324,792 5,854,689

19,050,810

18,179,481

71,536 1,288,034 185,000 1,778

79,737 1,254,425 185,000 175,000

1,546,348

1,694,162

20,597,158

19,873,643

4 Gain/(loss) on disposal of assets 2016 Gain/(loss) on disposal of assets

2015

$ (72,652)

$ (2,424)

(72,652)

(2,424)

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UOW Pulse Ltd | 2016 Annual Report

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Notes to the Financial Statements For the Year Ended 31 December 2016

5

Expenses (a)

Employee benefits expense

Wages and salaries Annual leave expense Long service leave expense Superannuation expense Workers compensation expense Other employee benefits

2016

2015

$ 8,974,462 555,701 110,813 812,957 178,710 82,218

8,076,762 586,957 105,531 772,169 119,957 74,071

10,714,861

9,735,447

$

Superannuation The Company makes contributions to various third party defined contribution superannuation funds. Contributions are included in the income statement as employee benefit expense, as outlined in Note 5a. The Company does not contribute to, or have any connection with, any defined benefit superannuation funds. (b) Depreciation and Amortisation

2016

2015

$

$

Depreciation Building improvements Plant and equipment Computer equipment

350,864 240,297 29,483

416,860 250,197 26,004

Total Depreciation

620,644

693,061

Amortisation Occupancy contribution Establishment costs Computer software

308,784 2,968 27,028

308,784 2,686 19,714

Total amortisation

338,780

331,184

Total depreciation and amortisation

959,424

1,024,245

(c)

Other Expenses

Consultant fees Maintenance Advertising & Promotional Computer rental Auditor's remuneration - audit of financial statements Security Activity Expenses

2016

2015

$

$

216,911 276,729 85,723 66,836 59,900 77,971 133,942

268,341 316,041 78,539 62,844 57,200 62,949 86,782

17

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29


Notes to the Financial Statements For the Year Ended 31 December 2016

5

Expenses (c)

Other Expenses continued

2016

Cleaning Kids Uni Catering Bank charges Laundry Nappy Services Waste disposal Leasing cost Small Equipment Legal expenses Materials and Consumables Evening Entertainment Lunch Entertainment Other

6

$ 73,722 110,322 127,921 66,569 49,362 140,049 47,014 55,229 28,206 48,210 65,921 69,942 961,039

$ 72,023 109,319 132,146 62,754 52,529 133,389 52,418 57,356 86,217 61,453 65,467 62,095 996,200

2,761,518

2,876,062

2016

2015

$

$

Current assets - Cash and cash equivalents

Cash at bank and on hand

7

2015

Current assets - Trade and other receivables

2,140,414

2,382,694

2016

2015

$ 1,246,162 (5,737)

734,295 (8,753)

Sub - Total

1,240,425

725,542

Total current trade and other receivables

1,240,425

725,542

Trade receivables Provision for impairment

(a)

(a)

$

Impaired trade receivables As at 31 December 2016 current trade receivables of the Company with a nominal value of $854,615 (2015: $324,610) were past due. Of this past due amount, $5,737 (2015: $8,753) was considered impaired and provided for. The individually impaired receivables mainly relate to marketing and sponsorship customers, which are in unexpectedly difficult economic situations.

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Notes to the Financial Statements For the Year Ended 31 December 2016 7

Current assets - Trade and other receivables continued (a)

Impaired trade receivables continued

The ageing of these receivables is as follows:

2016

2015

$

$ 5,737

Over 6 months

8,753

Movements in the provision for impairment of receivables are as follows:

2016 At 1 January Provision for impairment recognised during the year Receivables written off during the year as uncollectible

$ (8,753) (4,228) 7,244

At 31 December

(5,737)

2015 $ (5,795) (2,958) (8,753)

The creation and release of the provision for impaired receivables has been included in 'other expenses' in the statement of comprehensive income. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash. The other classes within trade and other receivables do not contain impaired assets and are not past due. Based on the credit history of these other classes, it is expected that these amounts will be received when due. Information about the Company’s exposure to credit risk, foreign currency and interest rate risk is provided in Note 2. As of 31 December 2016, trade receivables of $848,878 (2015: $315,857) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows: 2016

2015 $

1 to 3 months 3 to 6 months Over 6 months

$ 577,882 40,366 230,630

At 31 December

848,878

315,857

71,997 22,319 221,541

19

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31


Notes to the Financial Statements For the Year Ended 31 December 2016

8

Current assets - Inventories Inventories - at cost

2016

2015

$ 2,069,036

2,019,364

2,069,036

2,019,364

$

Write downs of inventories to net realisable value recognised as an expense during the year ended 31 December 2016 amounted to $80,920 (2015: $18,291). The expense has been included in ‘raw materials and consumables used’ in profit or loss.

9

Other non-financial assets

2016

2015

$

$

CURRENT Bank Guarantee Lease Incentive Prepayments

120,000 33,333 49,923

33,333 8,598

Total current assets

203,256

41,931

2016

2015

$

$

NON-CURRENT Lease Incentive

5,556

38,889

Total non-current assets

5,556

38,889

10 Non current assets - Property, plant and equipment

Building improvements Cost or fair value Accumulated depreciation Total building improvements Plant and equipment Cost or fair value Accumulated depreciation Total plant and equipment

2016

2015

$

$

3,507,188 (2,458,014)

4,676,192 (3,304,478)

1,049,174

1,371,714

2,323,962 (1,506,522)

2,730,107 (1,844,695)

817,440

885,412

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Notes to the Financial Statements For the Year Ended 31 December 2016

10

Non current assets - Property, plant and equipment continued

2016

2015

$

$

Computer equipment Cost or fair value Accumulated depreciation

181,587 (109,306)

159,635 (79,824)

Total computer equipment

72,281

79,811

1,938,895

2,336,937

Total property, plant and equipment

(a)

Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Building Plant and Computer improvements equipment equipment Total $

$

$

$

Year ended at 31 December 2016 Balance at the beginning of year Additions Disposals - written down value Depreciation expense

1,371,714 85,026 (56,702) (350,864)

885,412 188,275 (15,950) (240,297)

79,811 21,953 (29,483)

2,336,937 295,252 (72,652) (620,644)

Year ended at 31 December 2016

1,049,174

817,440

72,281

1,938,895

Year ended at 31 December 2015 Balance at the beginning of year Additions Disposals - written down value Depreciation expense

1,463,839 326,777 (2,042) (416,860)

848,520 287,471 (382) (250,197)

72,712 33,104 (26,004)

2,385,071 647,352 (2,424) (693,061)

Year ended at 31 December 2015

1,371,714

885,412

79,811

2,336,937

11 Non current assets - Intangible Assets Computer software Cost Accumulated amortisation and impairment Net carrying value

2016

2015

$

$

127,461 (76,570)

116,161 (49,542)

50,891

66,619

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Notes to the Financial Statements For the Year Ended 31 December 2016

11

Non current assets - Intangible Assets continued

Goodwill Cost Accumulated amortisation and impairment

225,225 (115,847)

231,731 (119,385)

109,378

112,346

9,821,137 (4,923,857)

9,821,137 (4,615,073)

Net carrying value

4,897,280

5,206,064

Total Intangibles

5,057,549

5,385,029

Net carrying value Occupancy contribution Cost Accumulated amortisation and impairment

(a)

Movements in Carrying Amounts

Computer software

Goodwill

Occupancy contribution

Total

$

$

$

$

66,619 11,300 (27,028)

112,346 (2,968)

5,206,064 (308,784)

5,385,029 11,300 (338,780)

50,891

109,378

4,897,280

5,057,549

45,560 40,773 (19,714)

69,999 45,033 (2,686)

5,514,848 (308,784)

5,630,407 85,806 (331,184)

66,619

112,346

5,206,064

5,385,029

Year ended 31 December 2016 Net carrying amount at start of year Additions Amortisation Closing value at 31 December 2016 Year ended 31 December 2015 Net carrying amount at start of year Additions Amortisation Closing value at 31 December 2015

22

UOW Pulse Ltd | 2016 Annual Report

34


Notes to the Financial Statements For the Year Ended 31 December 2016

12 Current liabilities - Trade and other payables

2016

2015

Sundry creditors GST payable Accrued expenses

$ 165,381 26,738 2,483,704

$ 611,694 36,690 1,829,013

Total Trade and other payables

2,675,823

2,477,397

2016

2015

$

$

Information about the Company’s exposure to foreign exchange risk is provided in Note 2.

13 Borrowings (a)

Current liabilities

Unsecured Loans from related parties

-

126,672

Total current borrowings

-

126,672

-

126,672

Total borrowings

14 Provisions (a)

(b)

Current liabilities

2016

2015

Employee benefits - long service leave Employee benefits - annual leave

$ 397,726 443,058

402,243 492,840

Total current provisions

840,784

895,083

Non current liabilities

2016

$

2015

Employee benefits - long service leave

$ 179,373

$ 169,570

Total Non current provisions

179,373

169,570

The current provision for long service leave and annual leave includes all unconditional entitlements where employees have completed the required period of service. The entire amount is presented as current. Based on past experience, the Company does not expect all employees to take the full amount of accrued current long service leave and annual leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next 12 months.

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35


Notes to the Financial Statements For the Year Ended 31 December 2016

2016 Long service leave obligation expected to be settled after 12 months Annual leave obligation expected to be settled after 12 months

2015

$ 292,941 58,603

$ 289,511 69,562

Expense recognised in the Statement of Comprehensive Income Movements in provisions for annual leave and long service leave are included in the profit or loss as employee benefits expense, as outlined in Note 5a.

15 Other liabilities

2016

2015

$

$

CURRENT Department of Social Services Loan Deposits held Income in advance

7,500 14,748 282,729

18,000 13,120 183,114

Total current liabilities

304,977

214,234

2016

2015

$

$

NON-CURRENT Department of Social Services Loan

-

7,500

Total non-current liabilities

-

7,500

The Company has responsibility for repayment of a loan, made by the Department of Social Services to the University of Wollongong, to finance, in part, extensions to the Children's Services Centre.

16 Retained Earnings

2016

2015

Balance 1 January Operating Result for the year

$ 9,039,930 (385,756)

$ 9,282,683 (242,753)

Retained earnings at 31 December

8,654,174

9,039,930

24

UOW Pulse Ltd | 2016 Annual Report

36


Notes to the Financial Statements For the Year Ended 31 December 2016

17 Key Management Personnel Disclosures (a)

Directors The following persons were directors of UOW Pulse Limited during the financial year: (i)

Executive Chair

Melva Crouch (Concluded: 1/10/2016) (ii)

Chair

Sue Chapman (Commenced: 1/10/2016) (iii) Executive Director Michael Gillmore (Concluded: 2/12/2016) Melva Crouch (Commenced: 1/10/2016) (iv)

Non executive Directors

Daniel Crameri Jo Ann Fisher (Concluded: 6/12/2016) Walter Immoos (Concluded: 19/4/2016) Sarah Lisle Thomas Quinn (Concluded: 23/8/2016) Tarrant Sewell (Concluded: 6/12/2016) Samuel Tedeschi (Concluded: 6/12/2016) Mary Youssif Murray Reid (Commenced: 22/4/2016)

Apart from the details disclosed in note 20, no Director has entered into a material contract with UOW Pulse Limited since the end of the previous financial year. All contracts involving a Director are conducted at arm's length. The totals of remuneration paid to the key management personnel of UOW Pulse Limited during the year are as follows: (b)

Remuneration of Executive Officers

Remuneration payments made to Executive Officers Short term employee benefits Post employment benefits Total Remuneration

2016

2015

$

$

262,061 28,471

221,503 31,874

290,532

253,377

25

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37


Notes to the Financial Statements For the Year Ended 31 December 2016

18 Remuneration of Auditors During the year the following fees were paid or payable for services provided by the auditor of the Company: 2016 2015 $ Audit Office of NSW Audit of financial statements

59,900

$ 57,200

19 Commitments (a) (i)

Lease commitments Operating lease commitments Future Non Cancellable Operating Lease Rentals of Plant and Equipment The Company has entered into a commercial lease for computer equipment. The computer equipment lease is for three years. There are no restrictions placed upon the lessee by entering into these leases. The GST component of operating lease commitments for the year 2016 is $11,277 (2015: $7,390)

2016

2015

$

$

Commitments for minimum lease payments in relation to non cancellable operating leases are payable as follows: Within one year Later than one year but not later than five years Total Operating lease commitments

(ii)

58,974 65,266

48,513 32,776

124,240

81,289

Operating lease commitments receivable

The Company has entered into commercial property leases for office space and food outlets. These non cancellable leases have remaining terms of between one and five years. Leases are based on net sales are/or fixed amounts with a clause included to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The future minimum lease payments receivable under non cancellable operating leases in the aggregate and for each of the following periods are:

26

UOW Pulse Ltd | 2016 Annual Report

38


Notes to the Financial Statements For the Year Ended 31 December 2016

19

Commitments (ii)

Operating lease commitments receivable

2016

2015

$

$

638,515 729,415

668,778 552,325

1,367,930

1,221,103

Receivable - minimum lease payments: Within one year Later than one year but not later than five years Total Operating lease commitments receivable

Several tenants annual rent is based on a percentage of their turnover for the year. Contingent rent of $385,103 including GST (2015: $421,078) was received by the Company in the period. The total GST component of operating lease commitments receivable for the year 2016 is $124,484 (2015: $111,009) (iii) Hire purchase commitments The Commercial Hire Purchase Liability is an umbrella facility of up to $500,000 that the Company can draw on for the purchase of equipment. It is renewable every 12 months. Interest is payable on each drawdown within the facility at the market rate prevailing at the time of the drawdown. As at 31 December 2016 the unused portion of the facility was $500,000 (2015: $500,000) and the portion of the facility in use was $0 (2015: nil). (b)

Capital commitments

The Company has a contractual obligation to purchase within the next 12 months, $256,661 of plant and equipment at reporting date (2015: 16,511). The capital plan for 2017 totals $511,000.

20 Related Parties (a)

Directors' Transactions with UOW Pulse Limited From time to time Directors of related parties or their Director related entities may purchase goods or services from UOW Pulse Limited. These purchases are on the same terms and conditions as those entered into by the employees of UOW Pulse Limited, or customers and are trivial or domestic in nature.

(b)

Transactions with related parties UOW Pulse Limited has a related party relationship with the following entities: The University of Wollongong (Ultimate Controlling Entity) UOWD Ltd and its controlled entities (UOWC Ltd and the Community College of City University Ltd) University of Wollongong Recreation and Aquatic Centre

27

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39


Notes to the Financial Statements For the Year Ended 31 December 2016

20

Related Parties Transactions with the controlling entity The University of Wollongong were as follows:

2016

2015

$

$

Sales of goods and services - Sales - Rent received - Commissions - Grants for specific purposes

1,944,218 169,264 62,850 185,000

1,807,031 165,572 68,915 185,000

Total

2,361,332

2,226,518

2016

2015

$

$

Purchases of goods - Goods and services - Contribution to General Manager's salary

797,394 122,609

994,918 113,189

Total

920,003

1,108,107

From time to time Related Parties of the University of Wollongong, including UOWD Ltd and its controlled entities (UOWC Ltd and the Community College of City University Ltd) and the University of Wollongong Recreation & Aquatic Centre Limited (URAC) may enter into transactions with the Controlled Entity. These transactions are on the same terms and conditions as those entered into by the Company's employees or customers. (c)

Outstanding balances arising from sales/purchases of goods and services

2015

Current receivables (sales of goods and services) Trade receivables

859,700

369,752

Current payables (purchases of goods) Trade creditors

119,180

141,599

-

126,672

Payables (loans) Current portion loan from University of Wollongong

21

2016

Economic dependency The Company's trading activities do not depend on a major customer or supplier. However, the Company is economically dependent on the continued existence of the University of Wollongong.

28

UOW Pulse Ltd | 2016 Annual Report

40


Notes to the Financial Statements For the Year Ended 31 December 2016 22

Events Occurring After the Reporting Date No other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years.

23 Contingencies There were no known contingent assets or liabilities existing at reporting date (nil at 31/12/2015).

24 Reconciliation of Operating Results After Income Tax to Net Cash Flows From Operating Activities 2016

2015

$ (385,756)

$ (242,753)

Operating result for the year Non-cash flows in profit: Amortisation Depreciation Net (gain)/loss on sale of non current assets Changes in assets and liabilities (Increase)/decrease in trade/term debtors Decrease/(increase) in prepayments/other debtors (Increase)/decrease in inventories (Increase)/decrease in bad debts allowance (Decrease)/increase in income in advance Increase/(decrease) in trade creditors/accruals Increase/(decrease) in other operating liabilities Increase/(decrease) in other provisions

338,780 620,644 72,652

331,184 693,061 2,424

(598,534) (41,325) (49,672) (3,016) 99,615 198,426 1,628 (44,496)

(158,999) 55,953 46,828 2,958 (601) 328,523 (452) (1,177)

Net cash inflow/(outflow) from operating activities

208,946

1,056,949

END OF AUDITED FINANCIAL REPORT.

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41


University Recreation & Aquatic Centre Limited Financial Statements For the Year Ended 31 December 2016


University of Wollongong Recreation & Aquatic Centre Limited ABN 99 082 907 382

Financial Statements For the Year Ended 31 December 2016


University of Wollongong Recreation & Aquatic Centre Limited ABN 99 082 907 382 Financial Statements for the year ended 31 December 2016

Page Financial Statements Directors' Report Directors' Declaration Income Statement Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements Independent Audit Report

1 5 6 7 8 9 10 11 28

The University of Wollongong Recreation & Aquatic Centre Limited (the Company) is a company limited by guarantee. In the event that the Company is wound up, the members' liability is limited to One Dollar ($1.00). The Company is incorporated and domiciled in Australia. The registered office and principal place of business is: University of Wollongong Recreation & Aquatic Centre Limited Northfields Avenue North Wollongong NSW 2522


University of Wollongong Recreation & Aquatic Centre Limited Directors' Report 31 December 2016

Directors' report The Directors present their report together with the financial statements of University of Wollongong Recreation and Aquatic Centre Limited ("the Company") for the year ended 31 December 2016. Directors The following persons were directors of University of Wollongong Recreation & Aquatic Centre Limited during the whole of the financial year and up to the date of this report: Professor John Patterson Paul Manning (Resigned 31 January 2017) Canio Fierravanti Murray Reid Dr Diane Harland Michael Kelly Information on Directors Professor John Patterson Appointed Director in June 1998 MSc Oregon, MEd Syd, EdD N Colorado, FAICD, FACHPER Experience and Expertise Executive Chair, URAC, since November 1998. Former Senior Deputy Vice Chancellor, University of Wollongong (Retired, December, 2014) Paul Manning (Resigned 31 January 2017) Appointed Director in June 1998 B.E.D (Syd), M.Mgmt FAICD. Experience and Expertise Executive Director and Company Secretary, University of Wollongong Recreation and Aquatic Centre Limited. Canio Fierravanti Appointed Director in October 2001 B Comm Experience and Expertise Director, Government Relations at University of Wollongong Murray Reid Appointed Director in June 1998 FCA, B. Comm Experience and Expertise Partner of O'Donnell Hennessy & Co Chartered Accountants & Auditors, Fellow of the Institute of Chartered Accountants. Other Current Directorships Director Wollongong Golf Club Dr Diane Harland Appointed Director in June 1998 B.ED (TSIT), M.Sc(Hons), Ph.D Experience and Expertise Lecturer, Faculty of Science, Medicine and Health at University of Wollongong. Michael Kelly Appointed Director in May 2002 BA LLB GDLP LLM Experience and Expertise Principal Lawyer, Insurance and Care NSW.

1


University of Wollongong Recreation & Aquatic Centre Limited Directors' Report 31 December 2016 Company secretary The company secretary was Mr Paul Manning. Mr Manning was appointed to the position of company secretary in 1998, resigned on 31 January 2017. Meetings of directors The number of meetings of the company’s board of directors held during the year ended 31 December 2016, and the number of meetings attended by each director were: Meetings of directors A

B

Professor John Patterson

4

5

Paul Manning (Resigned 31 January 2017)

5

5

Canio Fierravanti

4

5

Murray Reid

4

5

Dr Diane Harland

4

5

Michael Kelly

4

5

A = Number of meetings attended. B = Number of meetings held during the time the director held office or was a member of the committee during the year. Principal activities The principal activity of the Company during the course of the year was the provision of aquatic and recreation facilities to the University, community and the general public. There were no significant changes in the nature of the activities of the Company during the year. Results The operating deficit after income tax of the Company for the year amounted to $602,424 (2015: $578,731). Dividends - University of Wollongong Recreation & Aquatic Centre Limited Dividends are not payable by companies limited by guarantee. Therefore no dividends were declared or paid during the year. (2015: nil). Proceeding on behalf of the entity Nil.

2


University of Wollongong Recreation & Aquatic Centre Limited Directors' Report 31 December 2016 Review of operations The University of Wollongong Recreation and Aquatic Centre (URAC) operates to enhance the quality of life of our campus community through the provision of an extensive range of sporting, leisure, recreation, health and fitness opportunities through access to quality programs, services and facilities. URAC supports a membership base of approximately 2500 users. Of these approximately 60% are students, 30% university staff and 10% community members. An additional 1300 Fitness Passport holders from the community have registered to use the Recreation & Aquatic Centre and iChealth Club Facilities. Visitor numbers across all URAC managed areas were significantly less in 2016 with 590,000 visits recorded against 640,000 from 2015. This drop in visit numbers could be attributed to the disruptions caused whilst major refurbishment works were carried out to the foyer, sports hall of fame and main change room areas. URAC provided two team managers to assist with the operations of UOW teams at both the Australian University Games (AUG) and the Eastern University Games (EUG). A squad of 65 self-funded team members along with URAC staff Jaimie Hart and Chi Him Kong travelled to the AUG held in Perth in September with glowing reports on UOW team’s behavior and sportsmanship. URAC continued to be the preferred training facility for a number of elite sports teams and athletes, including St George Illawarra Dragons, South Coast Wolves FC and the Illawarra Cutters along with various elite triathletes and swimming coaches. A complete replacement of gym and cardio equipment at both URAC and iCHEALTH was finalized in October 2016. This represents an investment of approximately $600,000 in new state of the art training equipment. URAC continued the hosting of lectures and storage/office facilities for the School of Education, as well as a number of external groups, including the following regional sports groups:        

CIEE – Committee of International Student Exchange IAS – Illawarra Academy of Sport Indigo Wolf NSWRU - NSW Rugby Union Wollongong City Netball Triathlon Australia Wheelchair Sports NSW NSWIS

URAC continues to increase the level of community engagement on behalf of the University, across a range of sporting and non-sporting events throughout the year. URAC continues to play an integral part in the health and wellbeing of university students and staff as well as the Wollongong community at large. The University Council on the 22 April 2016 approved the restructure of University of Wollongong Recreation & Aquatic Centre Limited and Wollongong Unicentre Limited into a single entity UOW Pulse Limited effective from the 1 January 2017. The Council approved the transfer of URAC's existing activities and operations into UOW Pulse Limited on this restructure. On the 19 August 2016 the University Council approved a revised constitution of Unicentre in order to expand the objectives covering the range of services and activities offered by URAC. Wollongong Unicentre Limited changed its business name to UOW Pulse Limited on the 22 August 2016. On 1 January 2017 UOW Pulse received the net assets of the University of Wollongong Recreation and Aquatic Centre Limited less the debt forgiven by the parent entity.

3


University of Wollongong Recreation & Aquatic Centre Limited Beginning of audited financial statements Statement of Profit or Loss For the Year Ended 31 December 2016

Note Revenue from continuing operations

3

Other income Depreciation and amortisation expense Employee expenses Operating expenses Other expenses Finance costs Surplus/(Deficit) before income tax

3(a) 4 5

Income tax expense Surplus/(Deficit) after income tax

1(c)

4

2016

2015

$

$

3,591,382

3,553,280

38,914 (543,137) (2,641,276) (998,446) (27,485) (22,376) (602,424)

493 (531,112) (2,555,397) (995,668) (23,310) (27,017) (578,731)

(602,424)

(578,731)

The above statement of profit & loss should be read in conjunction with the accompanying notes.

6


University of Wollongong Recreation & Aquatic Centre Limited Statement of Comprehensive Income For the Year Ended 31 December 2016 2016

2015

$

$

Surplus/(Deficit) after income tax

(602,424)

(578,731)

Total comprehensive income for the year

(602,424)

(578,731)

Total comprehensive income for the year is attributable to: Owners of University of Wollongong Recreation & Aquatic Centre Limited

(602,424)

(578,731)

(602,424)

(578,731)

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

7


University of Wollongong Recreation & Aquatic Centre Limited Statement of Financial Position As at 31 December 2016

Note

2016

2015

$

$

ASSETS

CURRENT ASSETS

Cash and cash equivalents Trade and other receivables Other Inventories Property, plant and equipment Occupancy contribution

6 7 9 8 10(a) 11(a)

TOTAL CURRENT ASSETS

300,036 193,394 16,286 1,015,152 2,817,760 4,342,628

120,734 227,755 2,659 16,523 367,671

NON-CURRENT ASSETS

Property, plant and equipment Occupancy Contribution

10(b) 11(b)

TOTAL NON-CURRENT ASSETS

TOTAL ASSETS

-

645,623 3,040,869 3,686,492

4,342,628

4,054,163

4,438,666 584,437 497,215 1,204 5,521,522

3,964,019 122,962 515,062 4,602,043

LIABILITIES CURRENT LIABILITIES

Trade and other payables Borrowings Provisions Other

12 13(a) 14(a) 15(a)

TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES

Borrowings Provisions Other

13(b) 14(b) 15(b)

TOTAL NON-CURRENT LIABILITIES

TOTAL LIABILITIES NET ASSETS EQUITY Retained profit TOTAL EQUITY

16

-

27,386 1,204 28,590

5,521,522

4,630,633

(1,178,894)

(576,470)

(1,178,894)

(576,470)

(1,178,894)

(576,470)

The above statement of financial position should be read in conjunction with the accompanying notes.

8


University of Wollongong Recreation & Aquatic Centre Limited Statement of Changes in Equity For the Year Ended 31 December 2016

Note Total equity at the beginning of the financial year Total comprehensive income Total equity at 31 December 2016

16

Note Total equity at the beginning of the financial year Total comprehensive income Total equity at 31 December 2015

16

Retained Profits

Total

2016

2016

$

$

(576,470) (602,424) (1,178,894)

(576,470) (602,424) (1,178,894)

Retained Profits

Total

2015

2015

$

$

2,261 (578,731)

2,261 (578,731)

(576,470)

(576,470)

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

9


University of Wollongong Recreation & Aquatic Centre Limited Statement of Cash Flows For the Year Ended 31 December 2016

Note CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers Payments to suppliers and employees

Interest received Finance costs Net cash (outflow) inflow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES:

Payments for property, plant and equipment and occupancy Proceeds on disposal of non-current assets Net cash (outflow) inflow from investing activities

22

10

CASH FLOWS FROM FINANCING ACTIVITIES

Inflows from financing activities Repayment of finance lease Net cash inflow (outflow) from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at end of year

6

2016

2015

$

$

3,708,438 (3,322,879) 385,559 5,287 (22,376) 368,470

3,590,530 (3,480,233) 110,297 5,203 (27,017) 88,483

(689,557) 38,914 (650,643)

(41,663) 493 (41,170)

668,404 (206,929) 461,475

(153,987) (153,987)

179,302 120,734 300,036

(106,674) 227,408 120,734

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

10


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

1

Significant Accounting Policies

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (a)

Basis of Preparation (i) Statement of compliance The general purpose financial statement has been prepared in accordance with Australian Accounting Standards (which includes Australian Accounting Interpretations), the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation 2015 and the Corporations Act 2001. They have been prepared on an accrual basis and comply with the Australian Accounting Standards. The entity is a not-for-profit entity and these statements have been prepared on that basis. Some of the requirements for not-for-profit entities are inconsistent with the IFRS requirements. The financial statements of the Company for the year ended 31 December 2016 were authorised for issue on 20 April 2017. The financial statements are presented in Australian dollars. (ii) Basis of measurement The financial statements are prepared on a non-going concern basis and on the historical cost basis based on the letter of support from the Controling Entity. The preparation of the financial statements in conformity with Australian Accounting Standards (which includes Australian Accounting Interpretations) requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimated and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgements made by management in the application of Australian Accounting Standards (which includes Australian Accounting Interpretations) that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note (n). The liability for long service leave is adjusted to net present value. (iii) Deficiencies in Net assets The Statement of Financial Position shows a deficiency of $1,178,894 for Net Assets (2015 $576,470). The company has considered the deficiency when preparing the financial statements and has been provided a letter of support from the parent entity. On the 22 April 2016, University Council approved the restructure of the company and its existing activities and operations will be transferred into UOW Pulse Limited from the 1 January 2017. Upon the transfer, UOW Pulse will receive the net assets of the University of Wollongong Recreation and Aquatic Centre Limited less the debt forgiven by the parent entity. These events necessitated changes being made to the company’s financial statements which were amended to reflect the non-going concern basis of preparation. This resulted in the reclassification of its non-current assets and liabilities to current assets and liabilities. In December 2016, the Board of URAC resolved to move forward with voluntary deregistration.

(b)

Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties. Revenue is recognised for the major business activities as follows:

11


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

1

Significant Accounting Policies

(b)

Revenue recognition (i) Goods and Services Rendered Revenue from the sale of goods is recognised in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer. Revenue from rendering of services is recognised when that service has been fully provided. Revenue from memberships is accounted for on a cash basis in that it is recognised when a membership is signed up and income is not apportioned over the term of the membership. (ii) Rental income Rental income is recognised in the Statement of Profit or Loss on a straight-line basis as it is charged to tenants in accordance with individual leases. (iii) Interest Income Interest income is recognised in the Statement of Profit or Loss as it accrues.

(c)

Income Tax The operations of the Company are exempt from income tax under Sections 50-45 and 50-5 of the Income Tax Assessment Act (1997). The operations of the Company are exempt from payroll tax under Section 48(2) of the Payroll Tax Act 2007.

(d)

Leases Leases of property, plant and equipment where the Company, as lessee, have substantially all the risks and rewards of ownership are classified as finance leases (note 13). Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding borrowings, net of finance charges, are included in borrowings. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the asset’s useful life and the lease term. Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases (note 19). Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight line basis over the period of the lease.

(e)

Impairment of assets Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

(f)

Cash and cash equivalents For statement of cashflows presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

12


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

1

Significant Accounting Policies

(g)

Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days. Short term receivables are recognised at original invoice amount because the impact of discounting is immaterial. The amount of the impairment loss is recognised in the income statement within ‘other expenses’. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the income statement. Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off. A provision for impairment of receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables.

(h)

Property, plant and equipment Items of property, plant & equipment are stated at cost less accumulated depreciation. The cost of self-constructed assets includes the cost of materials and direct labour. Where parts of an item of property, plant & equipment have different useful lives, they are accounted for as separate items of property, plant & equipment. From time to time the Company contributes to the cost of construction of buildings, their improvements and landscaping on land over which it has no security. These amounts are accounted for in the statement of financial position as Occupancy Contribution, pursuant to an agreement reached with the University of Wollongong. The Occupancy Contribution is recognised as an asset as it gives the Company the right to occupy and use the buildings, and is amortised at a rate which the Company believes best reflects the expected useful life of such contribution. The Company recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when the cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the Company and the cost of the item can be measured reliably. All other costs are recognised in the income statement as an expense as incurred. Depreciation on other assets is calculated using the straight line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows: 2016 2015 - Building Improvements 10 years 10 years - Occupancy Contribution 13-36 years 13-36 years - Computer Equipment 3 years 3 years - Plant & Equipment** 4-10 years 4-10 years **Plant & equipment includes the following sub categories: general equipment, unigym/unicircuit equipment, leased equipment, furniture & fittings, motor vehicles, pool equipment, hockey equipment and sports hub equipment. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. All assets acquired including property, plant and equipment and intangibles other than goodwill are initially recorded at their cost of acquisition at the date of acquisition, being the fair value of consideration provided plus incidental costs directly attributable to the acquisition. Expenditure, including that on internally generated assets other than research and development costs is only recognised as an asset when the entity controls future economic benefits as a result of the costs incurred, it is probable that those future economic benefits will eventuate, and the costs can be measured reliably. Costs attributable to feasibility and alternative approach assessments are expensed as incurred. Items of plant and equipment less than $5,000 are expensed as incurred.

(i)

Trade and other payables Trade and other payables are stated at cost, which is considered to approximate amortised cost due to their short term nature. Recognition of trade and other payables occurs when goods and services have been received and obligation to make future payments arises. 13


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

1

Significant Accounting Policies

(i)

Trade and other payables Trade and other payables are due for settlement no more than 120 days from the date of recognition for related parties as per University of Wollongong's policy.

(j)

Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to that liability.

(k)

Employee benefits (i) Short term obligations Liabilities for short-term employee benefits including wages and salaries and non-monetary benefits are measured at the amount expected to be paid when the liability is settled, if it is expected to be settled wholly before twelve months after the end of the reporting period, and is recognised in other payables. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates payable. (ii) Other long-term employee benefit obligations The liability for other long-term employee benefits such as annual leave, accumulating sick leave and long service leave is recognised in current provisions for employee benefits if it is not expected to be settled wholly before twelve months after the end of the reporting period. It is measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Regardless of the expected timing of settlements, provisions made in respect of employee benefits are classified as a current liability, unless there is an unconditional right to defer the settlement of the liability for at least 12 months after the reporting date, in which case it would be classified as a non-current liability. (iii) Superannuation Entitlements Contributions to employee superannuation funds are charged against income as incurred. The Company is under no legal obligation to make up any shortfall in the funds assets to meet payments due to employees.

(l)

Goods and Services Tax (GST) Revenues, 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 statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(m)

Borrowings Borrowings are initially recognised at fair value. They are subsequently measured at amortised cost using the effective interest method. Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period 14


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

1

Significant Accounting Policies

(n)

New Accounting Standards and Interpretations Certain new Accounting Standards and Interpretations have been published that are not mandatory for 31 December 2016 reporting period. The company has not early adopted any new account Accounting Standards and Interpretations that are not yet effective, as there are no Accounting Standards and Interpretations that will have a material effect on the company’s financial statements. The Company has assessed the impact of these new Accounting Standards and Interpretations and considers the impact to be insignificant.

15


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

2

Financial Risk Management

(a) Market risk (i) Foreign exchange risk Foreign exchange risk arises when commercial transactions and recognised financial assets and liabilities are denominated in a currency that is not in the Company's functional currency. The Company does not operate internationally and is therefore not exposed to foreign exchange risk arising from various currency exposures. (ii) Price risk The Company is not exposed to equity securities price risk and commodity price risk. (iii) Cash flow and fair value interest rate risk The Company has minimal interest rate risk, its borrowings are issued at fixed rates, and ultimate controlling entity does not charge interest to the Company. (iv) Summarised sensitivity analysis The following tables summarise the sensitivity of the Company's financial assets and financial liabilities to interest rate risk, foreign exchange risk and other price risk.

31 December 2016

Interest rate risk -1%

Financial assets Cash and cash equivalents Trade and other receivables Financial liabilities Trade payables Finance lease liability

+1%

Carrying amount

Result

Equity

Result

Equity

$

$

$

$

$

300,036

(3,004)

(3,004)

3,004

3,004

193,394

-

-

-

-

-

-

-

-

-

4,400,316

-

-

-

-

584,437

-

-

-

-

3,004

3,004

Total increase/(decrease)

(3,004)

31 December 2015

(3,004)

Interest rate risk -1%

+1%

Carrying amount

Result

Equity

Result

Equity

$

$

$

$

$

Cash and cash equivalents

120,734

(1,207)

1,207

1,207

Trade and other receivables

227,755

-

-

-

-

3,964,019

-

-

-

-

122,962

-

-

-

-

1,207

1,207

Financial assets

Trade payables Finance lease liability Total increase/(decrease)

(1,207)

(1,207)

(1,207)

16


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

2 (b)

Financial Risk Management Credit risk Credit risk arises from cash and cash equivalents as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. Credit risk represents the loss that would be recognised if counterparts failed to perform as contracted. The credit risk on the Company's financial assets is the carrying amount shown on the statement of financial position. Receivable balances are monitored on an ongoing basis with the net result that the Company's' exposure to bad debts is not significant. All outstanding amounts past 90 days are followed up on a monthly basis. The Company is not materially exposed to concentrations of credit risk to a single trade debtor or group of debtors.

(c)

Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities. The Company manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Due to the dynamic nature of the underlying businesses, management aims at maintaining flexibility in funding by keeping committed credit lines available with a variety of counterparties and flexibility in payment terms provided by the University of Wollongong. The board of directors have overall responsibility for the establishment and oversight of risk management and reviews and agrees policies for managing each of these risks. Risk management policies are established to identify and analyse the risks faced by the Company, to set risk limits and control and to monitor risks. Compliance with policies is reviewed by internal audits on a continuous basis. The following tables summarise the maturity of the Company’s financial assets and financial liabilities:

Average Interest rate 2016 2015 % Financial Assets: Cash at bank Trade and other receivables

%

Financial liabilities Total Financial Liabilities

Within 1 year

1 to 5 years

2016

2015

2016

2015

2016

$

$

$

$

$

$

$

$

-

-

-

-

-

-

5,600

5,600

300,036 120,734

-

-

-

-

-

-

193,394

227,755

193,394 227,755

-

-

-

-

-

-

198,994

233,355

493,430 348,489

-

-

-

1.50 1.75 294,436 115,134 -

-

-

-

294,436 115,134

Total Financial Assets Financial Liabilities: Trade and other payables

Variable interest rate

-

-

4.49 7.13

5+ years

2015 2016 2015

-

-

-

-

-

-

-

142,919122,962 441,518

-

-

-

-

-

142,919122,962 441,518

-

-

-

Non-Interest

Total

2016

2015

2016

2015

$

$

$

$

4,400,316 3,964,019 4,400,3163,964,019 -

-

584,437 122,962

4,400,316 3,964,019 4,984,7534,086,981

17


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

3

Revenue

Trading income - revenue from rendering of services Interest Rents

(a)

2016

2015

$

$

3,426,106 5,287 159,989 3,591,382

3,379,775 5,203 168,302 3,553,280

2016

2015

$

$

Other Income

38,914

Net gain/(loss) on disposal of property, plant and equipment

4

493

Expenses

Profit before income tax includes the following specific expenses:

2016

2015

$

$

Depreciation and amortisation Building improvements Computer equipment Motor vehicles Other equipment Occupancy contribution Leased plant and equipment

30,845 22,569 17,353 97,801 223,108 151,461

37,147 1,356 18,681 97,797 223,108 153,023

Total depreciation and amortisation

543,137

531,112

14,774 7,602 22,376

12,989 14,028 27,017

Finance costs Interest expense and bank charges Finance charges on capitalised leases

5

Employee related expenses

Wages and salaries (including annual leave and long service leave expenses) Superannuation expense - defined contribution plans

2016

2015

$ 2,401,594 239,682

$ 2,330,057 225,340

2,641,276

2,555,397

18


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

6

Current assets - Cash and cash equivalents

2016

2015

$

$

5,600 294,436 300,036

5,600 115,134 120,734

Cash on hand Cash at bank

7

Current assets - Trade and other receivables

2016

2015

$

$

193,394 193,394

238,504 (10,749) 227,755

Net trade receivables Trade receivables Allowance for impairment

(a)

Impaired receivables

As at 31 December 2016 trade receivables of $31,220 (2015: $106,000) were past due.

20,464 10,756 31,220

76,541 29,459 106,000

Opening balance Write off

(10,749) 7,192

(11,156) 407

Recovered Closing balance

3,557 -

(10,749)

1 to 6 months Over 6 months

(b) Movements in the provision for impaired receivables are as follows:

The creation and release of the provision for the impaired receivables has been included in 'other expenses' in the income statement. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.

8

Inventories

2016

2015

$

$

At cost: Inventories

9

Current assets - Other

Prepayment

16,286

16,523

2016

2015

$ -

$ 2,659

19


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

At 31 December 2015 Cost Accumulated depreciation

Closing net book amount

Year ended 31 December 2015 Opening net book amount Depreciation charge

Net book amount

At 1 January 2015 Cost Accumulated depreciation

-

-

-

-

-

-

$

-

-

-

-

-

-

-

$

-

-

-

-

-

-

-

-

$

101,338

-

-

-

-

-

-

-

-

$

1,658

1,658

-

-

-

-

-

-

-

-

$

46,631

46,631

-

-

-

-

-

-

-

-

$

568,878

568,878

-

-

-

-

-

-

-

-

$

141,215

141,215

-

-

-

-

-

-

-

-

$

-

-

-

-

-

-

-

-

$

52,675

52,675

43,788

43,788

-

-

-

-

-

-

-

-

$

1,015,152

1,015,152

-

-

-

-

-

-

-

-

$

Property, plant and equipment

Net book amount

-

-

4,966

101,338

10

Year ended 31 December 2016 Opening net book amount

-

44,434

4,966

(a)

Closing net book amount

9,569

44,434

Total

At 31 December 2016 Reclassification from non-current assets

9,569

Current assets - property, plant and equipment Unigym / Fixtures Leased Pool Hockey Plant and Motor Sports hub Building Computer unicircuit and plant & equipment equipment equipment equipment fittings vehicles equipment equipment improvements equipment

Net book amount

20


$

$

$

$

$

$

Total

46,292 2,982,557 (39,512) (2,336,934)

$

Leased plant Sports hub Building Computer & equipment equipment improvements equipment

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

$

Property, plant and equipment

$

10

$

(b)

$

Non-current assets - property, plant and equipment Unigym / unicircuit Pool Hockey Plant and Fixtures Motor equipment equipment equipment equipment and fittings vehicles

At 1 January 2015 Cost Accumulated depreciation

77,920

787,900 (709,980)

645,623

191,344

501,290 (309,946)

6,780

113,535

911,963 73,837 (32,173) (308,004)

757,648 (644,113)

8,136 (1,356)

645,623

63,984

115,067 (37,147)

6,780

91,955 (27,971)

235,135 5,763 (49,554)

77,920

645,623

3,867

266,558 (153,023)

191,344

787,900 (709,980)

6,780

645,623 695,371 (5,812) (320,030)

103,837 (99,970)

64,560 50,278 (32,173) (18,681)

113,535

501,290 (309,946)

77,920

6,780 59,577 (22,569)

1,015,152

134,360

6,075 (2,208)

63,984

757,648 (644,113)

191,344

77,920 5,600 (30,845)

43,788

496,550 (362,190)

158,832 9,660 (34,132)

3,867

91,955 (27,971)

113,535

191,344 (50,129)

52,675

6,103 7,238 (1,135)

134,360

103,837 (99,970)

63,984

113,535 606,804 (151,461)

141,215

11,363 (5,260)

36,877 (6,917) 6,103

496,550 (362,190)

3,867

63,984 (17,353)

568,878

29,960

21,621 (3,851) 29,960

11,363 (5,260)

134,360

3,867 (2,209)

46,631

135,234 (105,274)

17,770

135,234 (105,274)

6,103

134,360 (58) (32,964)

1,658

17,770

50,488 (32,718)

29,960

6,103 (1,137)

101,338

50,488 (32,718)

17,770

29,960 23,390 (1,219) (7,697)

4,966

Net book amount

17,770 (4,535) (3,666)

44,434

Net book amount

At 31 December 2015 Cost Accumulated depreciation

Year ended 31 December 2015 Opening net book amount Additions Disposals Depreciation charge Closing net book amount

9,569

At

-

-

76,483 3,001,866 (32,695) (1,986,714) (43,788) (1,015,152)

46,292 2,982,557 (39,512) (2,336,934)

Year ended 31 December 2016 Opening net book amount Additions Disposals Depreciation charge Closing net book amount

733,554 (680,879) (52,675)

-

501,290 (360,075) (141,215) -

957,049 (388,171) (568,878) -

91,955 (45,324) (46,631) -

89,557 (87,899) (1,658) -

424,609 (323,271) (101,338) -

11,363 (6,397) (4,966) -

91,476 (47,042) (44,434) -

24,530 (14,961) (9,569) -

31 December 2016 Cost Accumulated depreciation Reclassification to current assets Net book amount

21


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

11

Occupancy contribution

(a)

Current

2016

2015

Reclassification from non-current assets

$ 2,817,760

$ -

Net book amount

2,817,760

-

Opening balance Accumulated amortisation

(b)

Non-current Assets

Occupancy Contribution

7,469,127

7,469,127

Accumulated amortisation Opening balance Amortisation for the year Closing balance

(4,428,258) (223,109) (4,651,367)

(4,205,150) (223,108) (4,428,258)

Reclassification to current assets

2,817,760 (2,817,760)

3,040,869 -

Net book value of occupancy contribution

12

Current Liabilities - Trade and other payables

University of Wollongong - Intercompany payable (note 20) Other creditors

13

Financial Liabilities - Secured

(a)

Current financial liabilities

Finance lease liability

-

3,040,869

2016

2015

$ 4,236,623 202,043 4,438,666

$ 3,778,100 185,919 3,964,019

2016

2015

$ 584,437

$ 122,962

584,437

122,962

The Company has access to the following facilities. As at 31 December 2016 the Company had access to leasing facility of $770,000 (2015: $770,000) and business credit card facility of $50,000 (2015: $50,000). Facilities that were utilised at balance date were leasing facility $584,437 (2015: $122,698). Business credit card facility $5,995 (2015: $1,804).

22


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

13

Financial Liabilities - Secured

(b)

Non-current financial liabilities

Finance lease liability Reclassification to current liabilities

14

Provisions

(a)

Current-liabilities - Provisions

Long Service Leave Annual Leave

2016

2015

$ 441,518

$ -

(441,518)

-

-

-

2016

2015

$ 391,562 105,653 497,215

$ 372,209 142,853 515,062

Amounts expected to be settled within the next 12 months: The current provision for long service leave and annual leave includes all unconditional entitlements where employees have completed the required period of service. The entire amount is represented as current. Based on past experience, the following amounts reflected leave that is expected to be settled within the next 12 months: Annual Leave: $65,000 (2015: $81,000) Long Service Leave: $20,000 (2015: $24,000) (b)

Non-current liabilities - Provisions

Long Service Leave Reclassification to current liabilities

2016

2015

$

$

36,119 (36,119) -

-

27,386 27,386

23


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

15

Current liabilities - Other

(a)

Current

2016

2015

$ 1,204

$ -

1,204 (1,204)

-

Unclaimed money (b)

Non-Current

Unclaimed money Reclassification to current liabilities

1,204

-

16

Retained profits

Opening retained profits Surplus/(deficit) for the year Balance at 31 December

17

Remuneration of Auditors

Audit of financial statements

1,204

2016 $ (576,470) (602,424) (1,178,894)

2015 $ 2,261 (578,731) (576,470)

2016

2015

$

$ 22,473

16,900

18 Contingencies (a) Contingent Liabilities There are no known contingent liabilities existing at balance date (nil at 31 December 2015). (b) Contingent Assets There are no known contingent assets existing at balance date (nil at 31 December 2015).

24


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

19

Commitments

(a)

Capital expenditure commitments

No Capital commitments at balance date (nil at 31 December 2015). (b) Lease commitments

2016

2015

$

$

Commitments in relation to finance leases are payable as follows: Within one year Later than five years Minimum lease payments

166,243 471,021 637,264

126,370 126,370

Less: Future lease finance charges Recognised as a liability

(52,827) 584,437

(3,408) 122,962

142,919 441,518 584,437

122,962 122,962

(i) Finance lease commitments

Representing lease liabilities: Current (note 13(a)) Non-current (note 13(b))

(ii) Operating lease commitments There are no operating lease commitments. (c) Lease commitments: where the Company is the lessor The future minimum lease payments receivable under non-cancellable operating leases are as follows:

No later than 1 year Between 1 year and 5 years Total minimum lease payments

2016

2015

$

$

55,000 174,519

-

229,519

13,750 13,750

25


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

20 (a)

Related party transactions Directors The names of each person holding the position of director of University of Wollongong Recreation & Aquatic Centre Limited during the financial year are: Prof. John Patterson, Paul Manning, Canio Fierravanti, Murray Reid, Dr. Diane Harland, Michael Kelly. Paul Manning resigned on 31 January 2017.

(b)

Ultimate controlling entity The ultimate controlling entity of the Company is the University of Wollongong.

(c)

Non-director related parties The classes of non-director related parties are:  controlling entity of the Company: and  commonly controlled entities

(d)

Controlling entity disclosures - University of Wollongong

Other transactions with the controlling entity:

2016

2015

$

$

Sales

930,886

999,594

Goods and services

747,273

769,111

105,376 4,236,623 96,782 4,333,405

51,596 3,778,100 63,611 3,841,711

Balances with the controlling entity:

Receivables Intercompany balance Payables

From time to time, the Company may enter into transactions with the ultimate controlling entity. These transactions are on the same terms and conditions as those entered into by the Company's customers or suppliers. The main transactions that occur between the Company and the ultimate controlling entity are sales of memberships and payment for utilities and maintenance. (e)

Other related parties The Company enters into transactions with other entities controlled by the University of Wollongong: UOW Pulse Limited and UOWD Ltd and its controlled entities (UOWC Ltd and the Community College of City University Ltd). No material transactions which were outside the company's normal operating activities were entered into for the year ended 31 December 2016.

26


University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2016

21

Economic dependency The Company's trading activities do not depend upon a major customer or supplier. However, the Company is economically dependent upon the continued existence of the operating and financial arrangements it has with the University of Wollongong. These include:  Free use of buildings and land used for sporting facilities  Short term cash flow relief for payments made on the Company's behalf.

22

Reconciliation of surplus/(deficit) after income tax to net cash inflow from operating activities 2016

Surplus/(deficit) after income tax Depreciation and amortisation Net (gain)/loss on sale of non-current assets (Increase)/decrease in receivables (Increase)/decrease in accrued income (Increase)/decrease in prepayments Increase/(decrease) in income received in advance (Increase)/decrease in other assets Increase/(decrease) in other liabilities Increase/(decrease) in trade creditors Increase/(decrease) in other provisions Net cash inflow (outflow) from operating activities

23

$ (602,424) 543,137 (38,914) 34,361 2,659 237 474,647 (45,233) 368,470

2015 $ (578,731) 531,111 (493) (51,473) 3,332 20,004 (1,310) (2,352) (160) 108,024 60,531 88,483

Events Occurring After the Reporting Date The University Council on the 22 April 2016 approved the restructure of University of Wollongong Recreation & Aquatic Centre Limited and Wollongong Unicentre Limited into a single entity UOW Pulse Limited effective from the 1 January 2017. The Council approved the transfer of URAC's existing activities and operations into UOW Pulse Limited on this restructure. On the 19 August 2016 the University Council approved a revised constitution of Unicentre in order to expand the objectives covering the range of services and activities offered by URAC. Wollongong Unicentre Limited changed its business name to UOW Pulse Limited on the 22 August 2016. On 1 January 2017 UOW Pulse received the net assets of the University of Wollongong Recreation and Aquatic Centre Limited less the debt forgiven by the parent entity.

End of audited financial statements.

27


Sydney Business School Limited Financial Statements For the Year Ended 31 December 2016


University of Wollongong USA Foundation Financial Statements For the Year Ended 31 December 2016


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UOW Controlled Entities 2016 Annual Report