2016 Annual Report - University of Wollongongweb/@pmcd/@smc/... · University of Wollongong 2016 Annual Report Controlled Entities. ... ACT. She has held senior positions in the Australian

2016 Annual ReportCONTROLLED ENTITIES

The University of Wollongong attempts to ensure the information contained in this publication is correct at the time of production (April 2017); however, sections may be amended without notice by the University in response to changing circumstances or for any other reason. Check with the University for any updated information. UNIVERSITY OF WOLLONGONG CRICOS: 00102E

CONTACT INFORMATIONuow.edu.au facebook.com/uow twitter.com/uow instagram.com/uow feedback.uow.edu.au

THE SWITCHBOARDTel: +61 2 4221 3555 Fax: +61 2 4221 4322 Switchboard 8.30am to 5.30pm Office hours Monday to Friday

WRITTEN ENQUIRIESChief Administrative Officer University Wollongong NSW 2522 Australia

University of W

ollongong 2016 Annual Report C

ontrolled Entities

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 Companiesa. UOWD Limitedb. UOWC Limitedc. 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

Financial Statements

UOW Enterprises Group of CompaniesUOWD LimitedUOWC LimitedCommunity College of City University LimitedCCCU 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

ABN 28 915 832 337 ACN 081 114 089

2016 ANNUAL REPORT

2UOW Pulse Ltd | 2016 Annual Report

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

2 3 uowpulse.com.au/aboutus/governance

DIRECTORS’ REPORTThrough 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 2016Sue 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 2013Melva 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.


Mary Youssif B.Com, M.Stud.Accy, FCPA, AGIA, RTA, MAMI, MAICD Non Executive Director Director Since August 2004Mary 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 2015Sarah 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 2015Completing 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.


Murray Reid Non Executive Director Director Since April 2016Murray 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 2016As 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 2016Jo 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 2016Sam 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


Tarrant Sewell Non Executive Director Director October 2013 - December 2016Tarrant 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 2016Thomas 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 2016Walter 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.


BOARD OF DIRECTORSThe 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;

• establishing goals for management;

• monitoring organisational performance; and

• ensuring that stewardship frameworks are in place.

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..

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.


INSURANCE OF DIRECTORS AND OFFICERSDuring 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 ACTIVITIESThe 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 non-commercial Student Engagement activities and provide high level social experiences within modern facilities.

AUDIT PROCESSAs 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:

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

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

• A procedure of absenting senior managers during Audit meetings.

INTERNAL CONTROL FRAMEWORKTo 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 AUTHORITYThe 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:

• Property, Plant and Equipment

• Authority to Enter Contracts

• Staff and Organisation

• Operating Expenditure

• Financial Administration

• Sponsorship and Donation

RISK MANAGEMENTThe 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.

• Review by the Board of the annual budget and regular financial performance reviews.

• A comprehensive Insurance Program.

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

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

BOARD COMMITTEESThe Board has the following advisory committees:

• Services Committee

• Audit and Risk Management Committee

• Children’s Services Consultative Committee

• Student Engagement Advisory Group

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

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


EVENTS SUBSEQUENT TO BALANCE DATE

There were no events subsequent to the balance date.

LIKELY DEVELOPMENTSOn 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 DECLARATIONA 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.






Statement of Comprehensive Income For the Year Ended 31 December 2016

2

Note2016

$2015

$Revenue from continuing operations 3 20,597,158 19,873,643 Gain/(loss) on disposal of assets 4 (72,652) (2,424) Raw materials and consumables used (6,472,859) (6,456,318) Employee related expenses 5(a) (10,714,861) (9,735,447) Depreciation and amortisation expense 5(b) (959,424) (1,024,245) Other expenses 5(c) (2,761,518) (2,876,062) Finance costs (1,600) (21,900)

Operating Result before income tax (385,756) (242,753) Income tax expense 1(d) - -

Operating Result for the year (385,756) (242,753)

Other comprehensive income for the year, net of tax - -

Total comprehensive income for the year (385,756) (242,753)


Statement of Financial Position As at 31 December 2016

3

Note2016

$2015

$

ASSETS

Current assets Cash and cash equivalents 6 2,140,414 2,382,694 Trade and other receivables 7 1,240,425 725,542 Inventories 8 2,069,036 2,019,364 Other non-financial assets 9 203,256 41,931 Total current assets 5,653,131 5,169,531

Non current assets Other non-financial assets 9 5,556 38,889 Property, plant and equipment 10 1,938,895 2,336,937 Intangible assets 11 5,057,549 5,385,029 Total non current assets 7,002,000 7,760,855 Total assets 12,655,131 12,930,386

LIABILITIES

Current liabilities Trade and other payables 12 2,675,823 2,477,397 Borrowings 13 - 126,672 Provisions 14 840,784 895,083 Other liabilities 15 304,977 214,234 Total current liabilities 3,821,584 3,713,386

Non current liabilities Provisions 14 179,373 169,570 Other liabilities 15 - 7,500 Total non current liabilities 179,373 177,070 Total liabilities 4,000,957 3,890,456 Net assets 8,654,174 9,039,930

EQUITY Retained earnings 16 8,654,174 9,039,930 Total equity 8,654,174 9,039,930


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

4

2015

Note

RetainedEarnings

$Balance at 1 January 2015 9,282,683 Total comprehensive income for the year 16 (242,753)

Balance at 31 December 2015 9,039,930

2016

Note

RetainedEarnings

$Balance at 1 January 2016 9,039,930 Total comprehensive income for the year 16 (385,756)

Balance at 31 December 2016 8,654,174


Statement of Cash Flows For the Year Ended 31 December 2016

5

Note2016

$2015

$

CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers 21,364,944 20,952,138 Payments to suppliers and employees (21,225,934) (19,953,026) Interest received 71,536 79,737 Interest paid (1,600) (21,900) Net cash flows from operating activities 24 208,946 1,056,949

CASH FLOWS FROM INVESTING ACTIVITIES: Payments for property, plant and equipment (295,254) (647,351) Payments for intangibles (11,300) (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 (242,280) (134,208) Cash and cash equivalents at beginning of year 2,382,694 2,516,902 Cash and cash equivalents at the end of the year 6 2,140,414 2,382,694


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

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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 studentsincluding 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 AquaticCentre 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 CommissionThe financial statement have been prepared in accordance with the Australian Charities and Not-for-profits Commissions Act 2012.

Compliance with IFRSThe financial statements of the Company do not comply with IFRS because the Company has adopted the not for profitrequirements of the Australian Accounting Standards which are inconsistent with IFRS requirements.

Historical cost conventionThe 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 estimatesThe 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




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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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(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.




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(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 classifiedin 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 lossare 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.




10

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 2015

Building improvements 5 -10 years 5 -10 years Plant and equipment 3 -10 years 3 -10 years Computer equipment 3 - 5 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.




11

(ii) Computer SoftwareCosts 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 2015

Occupancy Contribution 30 - 40 Years 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.



12

(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.



13

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 liabilitiesThe 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.




14

31 December 2016 Average Interest

Rate %

VariableInterest

Rate $

FixedInterest

Rate $

NonInterest

$

Less than 1 Year

$

1 to 5 Years

$5+ Years

$Total

$

Financial assets Cash and cash equivalents 1.48 2,140,414 - - 2,140,414 - - 2,140,414 Receivables - - - 1,240,425 1,240,425 - - 1,240,425 Other financial assets 2.65 - 120,000 - 120,000 - - 120,000

Total Financial assets 2,140,414 120,000 1,240,425 3,500,839 - - 3,500,839

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 - - 2,683,323

31 December 2015 Average Interest

Rate %

VariableInterest

Rate $

FixedInterest

Rate $

NonInterest

$

Less than 1 Year

$

1 to 5 Years

$5+ Years

$Total

$

Financial assets Cash and cash equivalents 1.86 2,382,694 - - 2,382,694 - - 2,382,694 Receivables - - - 725,542 725,542 - - 725,542

Total Financial assets 2,382,694 - 725,542 3,108,236 - - 3,108,236

Financial liabilities Payables - - - - 2,477,397 - - 2,477,397 Borrowings- Uni of Wollongong 6.00 - 126,672 - 126,672 - - 126,672 Borrowings- Department of Social Services - - - 25,500 18,000 7,500 - 25,500

Total Financial libilities - 126,672 25,500 2,622,069 7,500 - 2,629,569

(c) 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.




15

(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 Price risk -1% +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 33,333 - - - - - - - - Other financial assets 120,000 - - - - - - - -

Financial liabilities Trade payables 2,675,823 - - - - - - - - Other financial liabilities 22,248 - - - - - - - - Total increase/(decrease) (21,404) (21,404) 21,404 21,404 - - - -



16

31 December 2015 Interest rate risk Price risk -1% +1% -1.304% +1.304%

Carrying amount

$Profit

$Equity

$Profit

$Equity

$Profit

$Equity

$Profit

$Equity

$

Financial assets Cash and Cash Equivalents 2,382,694 (23,827) (23,827) 23,827 23,827 - - - - Accounts receivable 725,542 - - - - - - - - Financial asset - Lease Incentive 33,333 - - - - - - - -

Financial liabilities Trade payables 2,477,397 - - - - - - - - Current borrowings 126,672 - - - - - - - - Other financial liabilities 38,620 - - - - - - - - Total increase/(decrease) (23,827) (23,827) 23,827 23,827 - - - -

3 Revenue

From continuing operations 2016

$2015

$

Sales revenue - Sale of goods 12,879,043 12,324,792 - Provision of services 6,171,767 5,854,689

19,050,810 18,179,481

Other revenue - Interest 71,536 79,737 - Rental income 1,288,034 1,254,425 - Grants received - related parties 185,000 185,000 - Other income 1,778 175,000

1,546,348 1,694,162

20,597,158 19,873,643

4 Gain/(loss) on disposal of assets

2016 $

2015 $

Gain/(loss) on disposal of assets (72,652) (2,424)

(72,652) (2,424)



17

5 Expenses

(a) Employee benefits expense 2016

$2015

$Wages and salaries 8,974,462 8,076,762 Annual leave expense 555,701 586,957 Long service leave expense 110,813 105,531 Superannuation expense 812,957 772,169 Workers compensation expense 178,710 119,957 Other employee benefits 82,218 74,071

10,714,861 9,735,447

Superannuation

The Company makes contributions to various third party defined contribution superannuation funds. Contributions areincluded in the income statement as employee benefit expense, as outlined in Note 5a. The Company does notcontribute to, or have any connection with, any defined benefit superannuation funds.

(b) Depreciation and Amortisation 2016

$2015

$

Depreciation Building improvements 350,864 416,860 Plant and equipment 240,297 250,197 Computer equipment 29,483 26,004

Total Depreciation 620,644 693,061

Amortisation Occupancy contribution 308,784 308,784 Establishment costs 2,968 2,686 Computer software 27,028 19,714

Total amortisation 338,780 331,184

Total depreciation and amortisation 959,424 1,024,245

(c) Other Expenses 2016

$2015

$

Consultant fees 216,911 268,341 Maintenance 276,729 316,041 Advertising & Promotional 85,723 78,539 Computer rental 66,836 62,844 Auditor's remuneration - audit of financial statements 59,900 57,200 Security 77,971 62,949 Activity Expenses 133,942 86,782



5 Expenses

(c) Other Expenses continued

18

2016 $

2015 $

Cleaning 73,722 72,023 Kids Uni Catering 110,322 109,319 Bank charges 127,921 132,146 Laundry 66,569 62,754 Nappy Services 49,362 52,529 Waste disposal 140,049 133,389 Leasing cost 47,014 52,418 Small Equipment 55,229 57,356 Legal expenses 28,206 86,217 Materials and Consumables 48,210 61,453 Evening Entertainment 65,921 65,467 Lunch Entertainment 69,942 62,095 Other 961,039 996,200

2,761,518 2,876,062

6 Current assets - Cash and cash equivalents

2016 $

2015 $

Cash at bank and on hand 2,140,414 2,382,694

7 Current assets - Trade and other receivables2016

$2015

$Trade receivables 1,246,162 734,295 Provision for impairment (a) (5,737) (8,753)

Sub - Total 1,240,425 725,542

Total current trade and other receivables 1,240,425 725,542

(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.



7 Current assets - Trade and other receivables continued

(a) Impaired trade receivables continued

19

The ageing of these receivables is as follows: 2016

$2015

$Over 6 months 5,737 8,753

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

2016 $

2015 $

At 1 January (8,753) (5,795) Provision for impairment recognised during the year (4,228) (2,958) Receivables written off during the year as uncollectible 7,244 -

At 31 December (5,737) (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 anumber of independent customers for whom there is no recent history of default. The ageing analysis of these tradereceivables is as follows:

2016 $

2015 $

1 to 3 months 577,882 71,997 3 to 6 months 40,366 22,319 Over 6 months 230,630 221,541

At 31 December 848,878 315,857



20

8 Current assets - Inventories2016

$2015

$Inventories - at cost 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 assets2016

$2015

$

CURRENT Bank Guarantee 120,000 - Lease Incentive 33,333 33,333 Prepayments 49,923 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 equipment2016

$2015

$

Building improvements Cost or fair value 3,507,188 4,676,192 Accumulated depreciation (2,458,014) (3,304,478)

Total building improvements 1,049,174 1,371,714

Plant and equipment Cost or fair value 2,323,962 2,730,107 Accumulated depreciation (1,506,522) (1,844,695)

Total plant and equipment 817,440 885,412



10 Non current assets - Property, plant and equipment continued

21

2016 $

2015 $

Computer equipment Cost or fair value 181,587 159,635 Accumulated depreciation (109,306) (79,824)

Total computer equipment 72,281 79,811

Total property, plant and equipment 1,938,895 2,336,937

(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 improvements

$

Plant and equipment

$

Computer equipment

$Total

$

Year ended at 31 December 2016 Balance at the beginning of year 1,371,714 885,412 79,811 2,336,937 Additions 85,026 188,275 21,953 295,252 Disposals - written down value (56,702) (15,950) - (72,652) Depreciation expense (350,864) (240,297) (29,483) (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 1,463,839 848,520 72,712 2,385,071 Additions 326,777 287,471 33,104 647,352 Disposals - written down value (2,042) (382) - (2,424) Depreciation expense (416,860) (250,197) (26,004) (693,061)

Year ended at 31 December 2015 1,371,714 885,412 79,811 2,336,937

11 Non current assets - Intangible Assets2016

$2015

$Computer software Cost 127,461 116,161 Accumulated amortisation and impairment (76,570) (49,542)

Net carrying value 50,891 66,619



11 Non current assets - Intangible Assets continued

22

Goodwill Cost 225,225 231,731 Accumulated amortisation and impairment (115,847) (119,385)

Net carrying value 109,378 112,346

Occupancy contribution Cost 9,821,137 9,821,137 Accumulated amortisation and impairment (4,923,857) (4,615,073)

Net carrying value 4,897,280 5,206,064

Total Intangibles 5,057,549 5,385,029

(a) Movements in Carrying Amounts

Computer software

$Goodwill

$

Occupancy contribution

$Total

$

Year ended 31 December 2016 Net carrying amount at start of year 66,619 112,346 5,206,064 5,385,029 Additions 11,300 - - 11,300 Amortisation (27,028) (2,968) (308,784) (338,780)

Closing value at 31 December 2016 50,891 109,378 4,897,280 5,057,549

Year ended 31 December 2015 Net carrying amount at start of year 45,560 69,999 5,514,848 5,630,407 Additions 40,773 45,033 - 85,806 Amortisation (19,714) (2,686) (308,784) (331,184)

Closing value at 31 December 2015 66,619 112,346 5,206,064 5,385,029



23

12 Current liabilities - Trade and other payables2016

$2015

$Sundry creditors 165,381 611,694 GST payable 26,738 36,690 Accrued expenses 2,483,704 1,829,013

Total Trade and other payables 2,675,823 2,477,397

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

13 Borrowings

(a) Current liabilities 2016

$2015

$

Unsecured Loans from related parties - 126,672

Total current borrowings - 126,672

Total borrowings - 126,672

14 Provisions

(a) Current liabilities 2016

$2015

$Employee benefits - long service leave 397,726 402,243 Employee benefits - annual leave 443,058 492,840

Total current provisions 840,784 895,083

(b) 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.



24

2016 $

2015 $

Long service leave obligation expected to be settled after 12 months 292,941 289,511 Annual leave obligation expected to be settled after 12 months 58,603 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 liabilities2016

$2015

$

CURRENT Department of Social Services Loan 7,500 18,000 Deposits held 14,748 13,120 Income in advance 282,729 183,114

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 Earnings2016

$2015

$Balance 1 January 9,039,930 9,282,683 Operating Result for the year (385,756) (242,753)

Retained earnings at 31 December 8,654,174 9,039,930



25

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

2016 $

2015 $

Remuneration payments made to Executive Officers Short term employee benefits 262,061 221,503 Post employment benefits 28,471 31,874

Total Remuneration 290,532 253,377



26

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) Lease commitments

(i) 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 58,974 48,513 Later than one year but not later than five years 65,266 32,776 Total Operating lease commitments 124,240 81,289

(ii) 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:



19 Commitments

(ii) Operating lease commitments receivable

27

2016 $

2015 $

Receivable - minimum lease payments:

Within one year 638,515 668,778 Later than one year but not later than five years 729,415 552,325

Total Operating lease commitments receivable 1,367,930 1,221,103

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



20 Related Parties

28

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

2016 $

2015 $

Sales of goods and services - Sales 1,944,218 1,807,031 - Rent received 169,264 165,572 - Commissions 62,850 68,915 - Grants for specific purposes 185,000 185,000

Total 2,361,332 2,226,518

2016 $

2015 $

Purchases of goods - Goods and services 797,394 994,918 - Contribution to General Manager's salary 122,609 113,189

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 services2016 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

Payables (loans) Current portion loan from University of Wollongong - 126,672

21 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.



29

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 $

Operating result for the year (385,756) (242,753) Non-cash flows in profit:

Amortisation 338,780 331,184 Depreciation 620,644 693,061 Net (gain)/loss on sale of non current assets 72,652 2,424

Changes in assets and liabilities (Increase)/decrease in trade/term debtors (598,534) (158,999) Decrease/(increase) in prepayments/other debtors (41,325) 55,953 (Increase)/decrease in inventories (49,672) 46,828 (Increase)/decrease in bad debts allowance (3,016) 2,958 (Decrease)/increase in income in advance 99,615 (601) Increase/(decrease) in trade creditors/accruals 198,426 328,523 Increase/(decrease) in other operating liabilities 1,628 (452) Increase/(decrease) in other provisions (44,496) (1,177)

Net cash inflow/(outflow) from operating activities 208,946 1,056,949

END OF AUDITED FINANCIAL REPORT.

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

University of Wollongong Recreation & Aquatic Centre LimitedABN 99 082 907 382


For the Year Ended 31 December 2016

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

Page


Directors' Report 1

Directors' Declaration 5

Income Statement 6

Statement of Comprehensive Income 7

Statement of Financial Position 8

Statement of Changes in Equity 9

Statement of Cash Flows 10

Notes to the Financial Statements 11

Independent Audit Report 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 isincorporated and domiciled in Australia. The registered office and principal place of business is:

University of Wollongong Recreation & Aquatic Centre LimitedNorthfields AvenueNorth Wollongong NSW 2522

University of Wollongong Recreation & Aquatic Centre LimitedDirectors' Report

31 December 2016

Directors' report

The Directors present their report together with the financial statements of University of Wollongong Recreation and AquaticCentre 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 ofthe 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 Appointed Director in June 1998 MSc Oregon, MEd Syd, EdD N Colorado, FAICD, FACHPERMSc Oregon, MEd Syd, EdD N Colorado, FAICD, FACHPER

Experience and ExpertiseExperience and ExpertiseExecutive Chair, URAC, since November 1998.Executive Chair, URAC, since November 1998.Former Senior Deputy Vice Chancellor, University of Wollongong (Retired, December, 2014)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 Appointed Director in October 2001 B CommB Comm

Experience and ExpertiseExperience and ExpertiseDirector, Government Relations at University of WollongongDirector, Government Relations at University of Wollongong

Murray Reid Appointed Director in June 1998FCA, B. Comm

Experience and ExpertisePartner of O'Donnell Hennessy & Co Chartered Accountants & Auditors, Fellow of the Institute of Chartered Accountants.

Other Current DirectorshipsDirector Wollongong Golf Club

Dr Diane Harland Appointed Director in June 1998 Appointed Director in June 1998B.ED (TSIT), M.Sc(Hons), Ph.DB.ED (TSIT), M.Sc(Hons), Ph.D

Experience and ExpertiseExperience and ExpertiseLecturer, Faculty of Science, Medicine and Health at University of Wollongong. Lecturer, Faculty of Science, Medicine and Health at University of Wollongong.

Michael Kelly Appointed Director in May 2002BA LLB GDLP LLM

Experience and ExpertisePrincipal Lawyer, Insurance and Care NSW.

1


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 thenumber 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 tothe University, community and the general public. There were no significant changes in the nature of the activities of theCompany 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 theyear. (2015: nil).

Proceeding on behalf of the entity

Nil.

2


31 December 2016

Review of operations

The University of Wollongong Recreation and Aquatic Centre (URAC) operates to enhance the quality of life of our campuscommunity through the provision of an extensive range of sporting, leisure, recreation, health and fitness opportunitiesthrough 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 haveregistered 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 against640,000 from 2015. This drop in visit numbers could be attributed to the disruptions caused whilst major refurbishmentworks 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 JaimieHart and Chi Him Kong travelled to the AUG held in Perth in September with glowing reports on UOW team’s behavior andsportsmanship.

URAC continued to be the preferred training facility for a number of elite sports teams and athletes, including St GeorgeIllawarra Dragons, South Coast Wolves FC and the Illawarra Cutters along with various elite triathletes and swimmingcoaches.

A complete replacement of gym and cardio equipment at both URAC and iCHEALTH was finalized in October 2016. Thisrepresents 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 ofexternal 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 andnon-sporting events throughout the year. URAC continues to play an integral part in the health and wellbeing of universitystudents 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 & AquaticCentre Limited and Wollongong Unicentre Limited into a single entity UOW Pulse Limited effective from the 1 January2017. The Council approved the transfer of URAC's existing activities and operations into UOW Pulse Limited on thisrestructure. On the 19 August 2016 the University Council approved a revised constitution of Unicentre in order to expandthe objectives covering the range of services and activities offered by URAC. Wollongong Unicentre Limited changed itsbusiness 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 CentreLimited less the debt forgiven by the parent entity.

3

University of Wollongong Recreation & Aquatic Centre LimitedBeginning of audited financial statements

Statement of Profit or LossFor the Year Ended 31 December 2016

Note

2016

$

2015

$

Revenue from continuing operations 3 3,591,382 3,553,280

Other income 3(a) 38,914 493

Depreciation and amortisation expense 4 (543,137) (531,112)

Employee expenses 5 (2,641,276) (2,555,397)

Operating expenses (998,446) (995,668)

Other expenses (27,485) (23,310)

Finance costs 4 (22,376) (27,017)

Surplus/(Deficit) before income tax (602,424) (578,731)

Income tax expense 1(c) - -

Surplus/(Deficit) after income tax (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 LimitedStatement of Comprehensive Income


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 LimitedStatement of Financial Position

As at 31 December 2016

Note

2016

$

2015

$

ASSETSCURRENT ASSETS

Cash and cash equivalents 6 300,036 120,734

Trade and other receivables 7 193,394 227,755

Other 9 - 2,659

Inventories 8 16,286 16,523

Property, plant and equipment 10(a) 1,015,152 -

Occupancy contribution 11(a) 2,817,760 -

TOTAL CURRENT ASSETS 4,342,628 367,671

NON-CURRENT ASSETS

Property, plant and equipment 10(b) - 645,623

Occupancy Contribution 11(b) - 3,040,869

TOTAL NON-CURRENT ASSETS - 3,686,492

TOTAL ASSETS 4,342,628 4,054,163

LIABILITIES

CURRENT LIABILITIES

Trade and other payables 12 4,438,666 3,964,019

Borrowings 13(a) 584,437 122,962

Provisions 14(a) 497,215 515,062

Other 15(a) 1,204 -

TOTAL CURRENT LIABILITIES 5,521,522 4,602,043

NON-CURRENT LIABILITIES

Borrowings 13(b) - -

Provisions 14(b) - 27,386

Other 15(b) - 1,204

TOTAL NON-CURRENT LIABILITIES - 28,590

TOTAL LIABILITIES 5,521,522 4,630,633

NET ASSETS (1,178,894) (576,470)

EQUITY

Retained profit 16 (1,178,894) (576,470)

TOTAL EQUITY (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 LimitedStatement of Changes in Equity


Note

RetainedProfits

2016

$

Total

2016

$

Total equity at the beginning of the financial year (576,470) (576,470)

Total comprehensive income 16 (602,424) (602,424)

Total equity at 31 December 2016 (1,178,894) (1,178,894)

Note

RetainedProfits

2015

$

Total

2015

$

Total equity at the beginning of the financial year 2,261 2,261

Total comprehensive income 16 (578,731) (578,731)

Total equity at 31 December 2015 (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 LimitedStatement of Cash Flows


Note

2016

$

2015

$

CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers 3,708,438 3,590,530

Payments to suppliers and employees (3,322,879) (3,480,233)

385,559 110,297

Interest received 5,287 5,203

Finance costs (22,376) (27,017)

Net cash (outflow) inflow from operating activities 22 368,470 88,483

CASH FLOWS FROM INVESTING ACTIVITIES:

Payments for property, plant and equipment and occupancy 10 (689,557) (41,663)

Proceeds on disposal of non-current assets 38,914 493

Net cash (outflow) inflow from investing activities (650,643) (41,170)

CASH FLOWS FROM FINANCING ACTIVITIES

Inflows from financing activities 668,404 -

Repayment of finance lease (206,929) (153,987)

Net cash inflow (outflow) from financing activities 461,475 (153,987)

Net increase (decrease) in cash and cash equivalents 179,302 (106,674)

Cash and cash equivalents at the beginning of the financial year 120,734 227,408

Cash and cash equivalents at end of year 6 300,036 120,734

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

10

University of Wollongong Recreation & Aquatic Centre LimitedNotes to the Financial Statements


1 Significant Accounting Policies

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policieshave 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 andAudit Regulation 2015 and the Corporations Act 2001. They have been prepared on an accrual basis and comply withthe Australian Accounting Standards. The entity is a not-for-profit entity and these statements have been prepared onthat 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 April2017.

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 theletter of support from the Controling Entity.

The preparation of the financial statements in conformity with Australian Accounting Standards (which includesAustralian Accounting Interpretations) requires management to make judgements, estimates and assumptions thataffect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimatesand associated assumptions are based on historical experience and various other factors that are believed to bereasonable under the circumstances, the results of which form the basis of making the judgements about carryingvalues of assets and liabilities that are not readily apparent from other sources. Actual results may differ from theseestimates.

The estimated and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognised in the period in which the estimate is revised if the revision affects only that period, or in the period of therevision 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 AustralianAccounting Interpretations) that have a significant effect on the financial statements and estimates with a significantrisk 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 companyhas considered the deficiency when preparing the financial statements and has been provided a letter of support fromthe parent entity.

On the 22 April 2016, University Council approved the restructure of the company and its existing activities andoperations will be transferred into UOW Pulse Limited from the 1 January 2017. Upon the transfer, UOW Pulse willreceive the net assets of the University of Wollongong Recreation and Aquatic Centre Limited less the debt forgiven bythe parent entity.

These events necessitated changes being made to the company’s financial statements which were amended to reflectthe non-going concern basis of preparation. This resulted in the reclassification of its non-current assets and liabilitiesto current assets and liabilities.

In December 2016, the Board of URAC resolved to move forward with voluntary deregistration.


Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue arenet of returns, trade allowances, rebates and amounts collected on behalf of third parties.

Revenue is recognised for the major business activities as follows:

11





(i) Goods and Services Rendered

Revenue from the sale of goods is recognised in the Statement of Profit and Loss when the significant risks andrewards of ownership have been transferred to the buyer. Revenue from rendering of services is recognised when thatservice has been fully provided.

Revenue from memberships is accounted for on a cash basis in that it is recognised when a membership is signed upand 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 inaccordance 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 TaxAssessment 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 rewardsof ownership are classified as finance leases (note 13). Finance leases are capitalised at the lease’s inception at thefair value of the leased property or, if lower, the present value of the minimum lease payments. The correspondingborrowings, net of finance charges, are included in borrowings. Each lease payment is allocated between the liabilityand finance cost. The finance cost is charged to the income statement over the lease period so as to produce aconstant periodic rate of interest on the remaining balance of the liability for each period. The property, plant andequipment 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 aslessee are classified as operating leases (note 19). Payments made under operating leases (net of any incentivesreceived 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 annuallyfor impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Otherassets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount maynot be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds itsrecoverable 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 separatelyidentifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cashgenerating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversalof 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 atcall with financial institutions, other short term, highly liquid investments with original maturities of three months or lessthat are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes invalue, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement offinancial position.

12




(g) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using theeffective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30days. Short term receivables are recognised at original invoice amount because the impact of discounting isimmaterial.

The amount of the impairment loss is recognised in the income statement within ‘other expenses’. When a tradereceivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it iswritten off against the allowance account. Subsequent recoveries of amounts previously written off are credited againstother expenses in the income statement.

Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are writtenoff. A provision for impairment of receivables is established when there is objective evidence that the Company will notbe 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-constructedassets 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 separateitems of property, plant & equipment.

From time to time the Company contributes to the cost of construction of buildings, their improvements andlandscaping on land over which it has no security. These amounts are accounted for in the statement of financialposition as Occupancy Contribution, pursuant to an agreement reached with the University of Wollongong. TheOccupancy 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 partof such an item when the cost is incurred if it is probable that the future economic benefits embodied with the item willflow to the Company and the cost of the item can be measured reliably. All other costs are recognised in the incomestatement as an expense as incurred.

Depreciation on other assets is calculated using the straight line method to allocate their cost, net of their residualvalues, 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, leasedequipment, 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 attheir cost of acquisition at the date of acquisition, being the fair value of consideration provided plus incidental costsdirectly attributable to the acquisition.

Expenditure, including that on internally generated assets other than research and development costs is onlyrecognised as an asset when the entity controls future economic benefits as a result of the costs incurred, it isprobable that those future economic benefits will eventuate, and the costs can be measured reliably. Costs attributableto 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 termnature. Recognition of trade and other payables occurs when goods and services have been received and obligation tomake future payments arises.

13




(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 partiesas 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 reliablyestimated. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-taxrate 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 atthe amount expected to be paid when the liability is settled, if it is expected to be settled wholly before twelve monthsafter the end of the reporting period, and is recognised in other payables. Liabilities for non-accumulating sick leaveare 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 serviceleave is recognised in current provisions for employee benefits if it is not expected to be settled wholly before twelvemonths after the end of the reporting period. It is measured at the present value of expected future payments to bemade 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 ofservice. Expected future payments are discounted using market yields at the reporting date on national governmentbonds 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 acurrent liability, unless there is an unconditional right to defer the settlement of the liability for at least 12 months afterthe 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 nolegal 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 notrecoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or aspart of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GSTrecoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement offinancial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financingactivities 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 effectiveinterest method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelledor expired. The difference between the carrying amount of a financial liability that has been extinguished or transferredto another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, isrecognised in profit or loss as other income or finance costs. Borrowings are classified as current liabilities unless theCompany has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period

14




(n) New Accounting Standards and Interpretations

Certain new Accounting Standards and Interpretations have been published that are not mandatory for 31 December2016 reporting period. The company has not early adopted any new account Accounting Standards and Interpretationsthat are not yet effective, as there are no Accounting Standards and Interpretations that will have a material effect onthe company’s financial statements.

The Company has assessed the impact of these new Accounting Standards and Interpretations and considers theimpact to be insignificant.

15



2 Financial Risk Management

(a) Market risk

(i) Foreign exchange risk

Foreign exchange risk arises when commercial transactions and recognised financial assets and liabilities aredenominated in a currency that is not in the Company's functional currency. The Company does not operateinternationally 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 doesnot 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 raterisk, foreign exchange risk and other price risk.

31 December 2016 Interest rate risk

-1% +1%

Carryingamount

$

Result

$

Equity

$

Result

$

Equity

$

Financial assets

Cash and cash equivalents 300,036 (3,004) (3,004) 3,004 3,004

Trade and other receivables 193,394 - - - -

Financial liabilities - - - - -

Trade payables 4,400,316 - - - -

Finance lease liability 584,437 - - - -

Total increase/(decrease) (3,004) (3,004) 3,004 3,004

31 December 2015 Interest rate risk

-1% +1%

Carryingamount

$

Result

$

Equity

$

Result

$

Equity

$

Financial assetsCash and cash equivalents 120,734 (1,207) (1,207) 1,207 1,207

Trade and other receivables 227,755 - - - -

Trade payables 3,964,019 - - - -

Finance lease liability 122,962 - - - -

Total increase/(decrease) (1,207) (1,207) 1,207 1,207

16



2 Financial Risk Management

(b) 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 recognisedif counterparts failed to perform as contracted. The credit risk on the Company's financial assets is the carrying amountshown 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 debtsis 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 offunding through an adequate amount of committed credit facilities. The Company manages liquidity risk bycontinuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets andliabilities. Due to the dynamic nature of the underlying businesses, management aims at maintaining flexibility infunding by keeping committed credit lines available with a variety of counterparties and flexibility in payment termsprovided by the University of Wollongong.

The board of directors have overall responsibility for the establishment and oversight of risk management and reviewsand agrees policies for managing each of these risks. Risk management policies are established to identify andanalyse the risks faced by the Company, to set risk limits and control and to monitor risks. Compliance with policies isreviewed by internal audits on a continuous basis.

The following tables summarise the maturity of the Company’s financial assets and financial liabilities:

AverageInterest

rateVariable interest

rate Within 1 year 1 to 5 years 5+ years Non-Interest Total

2016

%

2015

%

2016

$

2015

$

2016

$

2015

$

2016

$

2015

$

2016

$

2015

$

2016

$

2015

$

2016

$

2015

$

Financial Assets:

Cash at bank 1.50 1.75 294,436115,134 - - - - - - 5,600 5,600 300,036 120,734

Trade and other receivables - - - - - - - - - - 193,394 227,755 193,394 227,755

Total Financial Assets 294,436115,134 - - - - - - 198,994 233,355 493,430 348,489

Financial Liabilities:

Trade and other payables - - - - - - - - - - 4,400,316 3,964,019 4,400,3163,964,019

Financial liabilities 4.49 7.13 - - 142,919122,962 441,518 - - - - - 584,437 122,962

Total Financial Liabilities-

- 142,919122,962 441,518 - - - 4,400,316 3,964,019 4,984,7534,086,981

17



3 Revenue2016

$

2015

$

Trading income - revenue from rendering of services 3,426,106 3,379,775

Interest 5,287 5,203

Rents 159,989 168,302

3,591,382 3,553,280

(a) Other Income

2016

$

2015

$

Net gain/(loss) on disposal of property, plant and equipment 38,914 493

4 Expenses

Profit before income tax includes the following specific expenses:

2016

$

2015

$

Depreciation and amortisation

Building improvements 30,845 37,147

Computer equipment 22,569 1,356

Motor vehicles 17,353 18,681

Other equipment 97,801 97,797

Occupancy contribution 223,108 223,108

Leased plant and equipment 151,461 153,023

Total depreciation and amortisation 543,137 531,112

Finance costs

Interest expense and bank charges 14,774 12,989

Finance charges on capitalised leases 7,602 14,028

22,376 27,017

5 Employee related expenses2016

$

2015

$

Wages and salaries (including annual leave and long service leave expenses) 2,401,594 2,330,057

Superannuation expense - defined contribution plans 239,682 225,340

2,641,276 2,555,397

18



6 Current assets - Cash and cash equivalents2016

$

2015

$

Cash on hand 5,600 5,600

Cash at bank 294,436 115,134

300,036 120,734

7 Current assets - Trade and other receivables2016

$

2015

$

Net trade receivables

Trade receivables 193,394 238,504

Allowance for impairment - (10,749)

193,394 227,755

(a) Impaired receivables

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

1 to 6 months 20,464 76,541

Over 6 months 10,756 29,459

31,220 106,000

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

Opening balance (10,749) (11,156)

Write off 7,192 407

Recovered 3,557 -

Closing balance - (10,749)

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

8 Inventories

2016

$

2015

$

At cost:

Inventories 16,286 16,523

9 Current assets - Other2016

$

2015

$

Prepayment - 2,659

19

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21



11 Occupancy contribution

(a) Current

2016

$

2015

$

Opening balance - -

Accumulated amortisation - -

- -

Reclassification from non-current assets 2,817,760 -

Net book amount 2,817,760 -

(b) Non-current Assets

Occupancy Contribution 7,469,127 7,469,127

Accumulated amortisation

Opening balance (4,428,258) (4,205,150)

Amortisation for the year (223,109) (223,108)

Closing balance (4,651,367) (4,428,258)

2,817,760 3,040,869

Reclassification to current assets (2,817,760) -

Net book value of occupancy contribution - 3,040,869

12 Current Liabilities - Trade and other payables2016

$

2015

$

University of Wollongong - Intercompany payable (note 20) 4,236,623 3,778,100

Other creditors 202,043 185,919

4,438,666 3,964,019

13 Financial Liabilities - Secured

(a) Current financial liabilities

2016

$

2015

$

Finance lease liability 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 creditcard 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



13 Financial Liabilities - Secured

(b) Non-current financial liabilities

2016

$

2015

$

Finance lease liability 441,518 -

Reclassification to current liabilities (441,518) -

- -

14 Provisions

(a) Current-liabilities - Provisions

2016

$

2015

$

Long Service Leave 391,562 372,209

Annual Leave 105,653 142,853

497,215 515,062

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 havecompleted the required period of service. The entire amount is represented as current. Based on past experience, thefollowing 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

2016

$

2015

$

Long Service Leave 36,119 27,386


- 27,386

23



15 Current liabilities - Other

(a) Current

2016

$

2015

$

Unclaimed money 1,204 -

(b) Non-Current

Unclaimed money 1,204 1,204


- 1,204

16 Retained profits2016

$

2015

$

Opening retained profits (576,470) 2,261

Surplus/(deficit) for the year (602,424) (578,731)

Balance at 31 December (1,178,894) (576,470)

17 Remuneration of Auditors2016

$

2015

$

Audit of financial statements 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



19 Commitments

(a) Capital expenditure commitments

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

(b) Lease commitments

2016

$

2015

$

(i) Finance lease commitments

Commitments in relation to finance leases are payable as follows:

Within one year 166,243 126,370

Later than five years 471,021 -

Minimum lease payments 637,264 126,370

Less: Future lease finance charges (52,827) (3,408)

Recognised as a liability 584,437 122,962

Representing lease liabilities:

Current (note 13(a)) 142,919 122,962

Non-current (note 13(b)) 441,518 -

584,437 122,962

(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:

2016

$

2015

$

No later than 1 year 55,000 13,750

Between 1 year and 5 years 174,519 -

Total minimum lease payments 229,519 13,750

25



20 Related party transactions

(a) Directors

The names of each person holding the position of director of University of Wollongong Recreation & Aquatic CentreLimited 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

Balances with the controlling entity:

Receivables 105,376 51,596

Intercompany balance 4,236,623 3,778,100

Payables 96,782 63,611

4,333,405 3,841,711

From time to time, the Company may enter into transactions with the ultimate controlling entity. These transactions are onthe 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 andpayment for utilities and maintenance.

(e) Other related parties

The Company enters into transactions with other entities controlled by the University of Wollongong: UOW PulseLimited and UOWD Ltd and its controlled entities (UOWC Ltd and the Community College of City University Ltd). Nomaterial transactions which were outside the company's normal operating activities were entered into for the yearended 31 December 2016.

26



21 Economic dependency

The Company's trading activities do not depend upon a major customer or supplier. However, the Company iseconomically dependent upon the continued existence of the operating and financial arrangements it has with theUniversity 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 activities2016

$

2015

$

Surplus/(deficit) after income tax (602,424) (578,731)

Depreciation and amortisation 543,137 531,111

Net (gain)/loss on sale of non-current assets (38,914) (493)

(Increase)/decrease in receivables 34,361 (51,473)

(Increase)/decrease in accrued income - 3,332

(Increase)/decrease in prepayments 2,659 20,004

Increase/(decrease) in income received in advance - (1,310)

(Increase)/decrease in other assets 237 (2,352)

Increase/(decrease) in other liabilities - (160)

Increase/(decrease) in trade creditors 474,647 108,024

Increase/(decrease) in other provisions (45,233) 60,531

Net cash inflow (outflow) from operating activities 368,470 88,483

23 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 1January 2017. The Council approved the transfer of URAC's existing activities and operations into UOW PulseLimited on this restructure. On the 19 August 2016 the University Council approved a revised constitution ofUnicentre 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 AquaticCentre 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

2016 Annual ReportCONTROLLED ENTITIES

The University of Wollongong attempts to ensure the information contained in this publication is correct at the time of production (April 2017); however, sections may be amended without notice by the University in response to changing circumstances or for any other reason. Check with the University for any updated information. UNIVERSITY OF WOLLONGONG CRICOS: 00102E

CONTACT INFORMATIONuow.edu.au facebook.com/uow twitter.com/uow instagram.com/uow feedback.uow.edu.au

THE SWITCHBOARDTel: +61 2 4221 3555 Fax: +61 2 4221 4322 Switchboard 8.30am to 5.30pm Office hours Monday to Friday

WRITTEN ENQUIRIESChief Administrative Officer University Wollongong NSW 2522 Australia

University of W

ollongong 2016 Annual Report C

ontrolled Entities

Documents

2016 Annual Report - University of Wollongongweb/@pmcd/@smc/... · University of Wollongong 2016 Annual Report Controlled Entities. ... ACT. She has held senior positions in the Australian