2017 Annual Report Controlled Entities by University of Wollongong

2017 Annual Report CONTROLLED ENTITIES

Financial Statements UNIVERSITY OF WOLLONGONG’S CONTROLLED ENTITIES The Financial Statements of the University of Wollongong’s Controlled Entities are presented here to meet Section 7 (1)(a)(1a) of the Annual Reports (Statutory Bodies) Act 1984 (NSW). The 2017 University of Wollongong Annual Report is contained in a separate edition and can be viewed on the University’s website at: https://www.uow.edu.au/about/publications/index.html For more comprehensive information on each of the Controlled Entities we encourage you to view their individual annual reports as prepared and presented to the University of Wollongong Council and New South Wales Parliament in June of each year. Contents 1. UOW Enterprises Group of Companies a. UOWD Limited b. UOWC Limited c. UOW College Hong Kong Ltd (formerly Community College of City University Ltd) d. CCCU Deed of Trust 2. UOW Pulse Limited 3. University of Wollongong Recreation & Aquatic Centre Limited 4. The Sydney Business School Pty Limited 5. The University of Wollongong USA Foundation 6. UW Asset Trust

UOW Enterprises Group of Companies UOWD Limited UOWC Limited UOW College Hong Kong Ltd (formerly Community College of City University Ltd) CCCU Deed of Trust

Financial Statements For the Year Ended 31 December 2017

UOW Pulse Limited Financial Statements For the Year Ended 31 December 2017

Annual Report 2017

ABN 28 915 832 337

ACN 081 114 089

CONTENTS Directors’ Report

Independent Auditor’s Report

Auditor’s Independence Declaration

Directors’ Declaration

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Consolidated Financial Statements

UOW Pulse Ltd | 2017 Annual Report

DIRECTORS’ REPORT Through 2017 the new entity, UOW Pulse Ltd continued its transformation as the one delivery vehicle geared towards improving the quality of campus life services at the University of Wollongong. With a clear mission and purpose the core functions of Sport & Recreation, Retail, Food & Beverage, Children’s’ Services, Events & Catering and Student Engagement are well placed to continue to grow and enrich the on campus experience.

BOARD OF DIRECTORS Sue Chapman Chair of the UOW Pulse Ltd Board Since October 2016 Sue has had a long career as a senior executive in the ACT and NSW governments, the most recent being the Deputy Director- General of the Community Services Directorate in the ACT. She has held senior positions in the Australian Department of Human Services and the AttorneyGeneral’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. Sue is a graduate of UOW with a MBA as well as a BA as well as 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 had considerable board experience and is currently an independent member of the Audit and Risk Committee for the Education Directorate in the ACT.

Melva Crouch, CSM UOW Chief Administrative Officer Executive Chair to October 2016 Executive Director Since August 2013 Ms Melva Crouch 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. Ms Crouch 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. Ms Crouch 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. She is Secretary to the University of Wollongong Council.

uowpulse.com.au/aboutus/governance

Mary Youssif B.Com, M.Stud.Accy, FCPA, AGIA, RTA, MAMI, MAICD Non Executive Director Director Since August 2004 Mary has held various senior and executive positions within the Coal Mining and Chemical Manufacturing Industries for 15 years. She also worked for the University of Wollongong between 1993 and 2001 in Chief Accountant and Project Management positions. During that time she was the Vice-Chancellor’s representative on the former 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 26 years and served as Chair of the Board from 2008 to 2014 and is currently the Chair of the Risk Committee. During this time, she formed and Chaired the Audit Committee, was on their Strategic Planning Committee for 4 years (Chair for one year), and the Governance Committee for 6 years (Chair for 2 years). As a former student and employee of the University of Wollongong, Mary brings extensive financial and business knowledge together with an understanding of the UOW Pulse and the Environment in which it operates. Mary is a University of Wollongong appointed Director to UOW Pulse.

Sarah Lisle Non Executive Director Director Since October 2015 Sarah has extensive experience in the not-for-profit sector and government sector in both the UK and Australia. Sarah commenced at the University of Wollongong (UOW) in 2012. In her current role as Senior Community Engagement Coordinator within the Advancement Division, she is responsible for key strategic programmes, utilising her extensive skills drawing on a strong track record in program, event and relationship management to ensure the University’s strategic community engagement goals are achieved. As a Non-Executive Director Sarah sits on the Audit and Risk Compliance Committee for UOW Pulse. Sarah is a member of the Australia Institute of Company Directors and has completed the Foundations of Directorship course. Sarah is also a member of the Junior Chamber International (JCI) and holds the position of National Director of Finance and Governance. With a business head and intraprenurial mindset Sarah strives to implement continuous improvement and innovation to ensure clear communication, striking harmony in the workplace and developing business opportunities. Sarah graduated her Executive Masters Business Administration (EMBA) through UOW’s Sydney Business School in December 2016.

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

UOW Pulse Ltd | 2017 Annual Report

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

Kath McCollim Executive Director. Since January 2017 Kath is a strategic change agent who has honed her skills from employment experience in the steel manufacturing and health insurance sectors and from consultancy engagements in the transport and local government sectors. She is presently the Director, Business Improvement and Assurance Division for the University of Wollongong. In this role, Kath supports the University’s ability to deliver on its strategic plan and manage risks by resourcing prioritised strategic initiatives and enabling units to deliver efficient, effective and compliant business processes. Her Division tailors recommendations and solutions and provide tools to streamline business support activities. Responsibilities include; • Project managing key strategic initiatives that open up new markets via capital investment and the leveraging of key external partnerships • Project managing the review of organisational units and key activities to increase their ability to transform the University • Delivering business process improvement initiatives impacting enterprise-wide services • Embedding process improvement into the University’s operating culture and raising the capability of staff to identify and implement their own process improvement initiatives • Facilitating the University’s risk management framework • Implementing a revised Business Continuity Framework, supported by the Risk Management Planning Cycle • Ensuring legislative compliance obligations can be met via responsibility identification and reporting As Director, Kath also facilitates the University’s Risk, Audit and Compliance Committee; a sub-committee of the University Council. She has a Bachelor of Arts (Psyc. & Industrial Relations); a Master of Commerce (Management) and a Certificate in Industrial Mediation. Kath is a member of the Australian Institute of Company Directors.

uowpulse.com.au/aboutus/governance

Nieves Murray Non Executive Director Since January 2017 IRT Group is one of Australia’s largest community-owned seniors’ lifestyle and care providers. In her decade as CEO, Nieves led IRT to new heights, growing its asset base to over $1.1 billion, employing more than 2,300 people and supporting more than 8,000 customers. In 2016 Nieves was recognised for her community contribution by being named Wollongong Citizen of the Year. She also serves as Director of the Illawarra Credit Union and the South Eastern NSW Public Health Network (Coordinare), is a Member of the University of Wollongong Council, and volunteers with local charities. In 2013 Nieves was named one of Australia’s 100 Women of Influence. She is a University of Wollongong and Harvard Business School alumni.

Anita Mulrooney Non Executive Director Since January 2017 Anita has over two decades of experience in the not-for-profit, education, insurance and health sectors in Australia and South-East Asia across key business functions including operations, customer service, marketing, sales and human resources. She is Head of Customer Service & Marketing for national, not-for-profit health fund, Peoplecare, where she is responsible for the company’s operations, customer service delivery, marketing, communications and community relations. Anita’s other appointments include: • IRT Group – Director • Destination Wollongong – Director & Chair of the Board’s Performance & Remuneration Committee • HIRMAA Marketing Committee – Chair • Private Health Insurance Ombudsman’s Website Reference Group – Member

UOW Pulse Ltd | 2017 Annual Report

BOARD OF DIRECTORS This statement outlines the UOW Pulse Governance Practices that were in place throughout the financial year. There were six meetings of the Board during 2017. The number of Board meetings attended by directors is detailed below. The Board is responsible for the overall Corporate Governance of UOW Pulse Ltd, including: • strategic direction;

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

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

DIRECTORS MEETING ATTENDANCE Board

Audit, Risk Management & Compliance

Sue Chapman

Melva Crouch

Mary Youssif

Murray Reid

Sarah Lisle

Daniel Crameri

Nieves Murray

Kath McCollim

Anita Mulrooney

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

uowpulse.com.au/aboutus/governance

INSURANCE OF DIRECTORS AND OFFICERS During the financial year a premium to insure directors and officers of the company was paid by the University of Wollongong, to the amount of $70,235 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 2017 $

2016 $

Revenue

29,156,399

20,597,158

Operating result for the year

2,587,486

(385,756)

Retained earnings at the beginning of the financial year

8,654,486

9,039,930

Acquisition 1 January 2017

(1,178,894)

Retained earnings at the end of the financial year

10,062,766

8,654,174

PRINCIPLE ACTIVITIES

• Financial Administration

The Company’s principal activities are the operation of commercial activities on the University of Wollongong Campuses including Retail, Food and Beverage, Events and Catering, Sports and Fitness and Children Services to support non-commercial Student Engagement activities and provide high level social experiences within modern facilities.

• Sponsorship and Donation

AUDIT PROCESS As a controlled entity of the University of Wollongong, the external auditors are The Audit Office of NSW and their agents. The Audit, Risk Management & Compliance 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.

RISK MANAGEMENT The CEO oversees a range of risk management strategies on behalf of the Board of Directors. A Risk Assessment Program, conducted in 2015, and reviewed in 2017, 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. • A comprehensive Insurance Program.

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

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

• A procedure of absenting senior managers during Audit meetings.

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

INTERNAL CONTROL FRAMEWORK

BOARD COMMITTEES

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

The Board has the following advisory committees:

DELEGATION OF AUTHORITY

DIVIDENDS

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

Dividends are not payable by companies limited by guarantee, such as the UOW Pulse Limited as a company limited by guarantee.

• Property, Plant and Equipment • Authority to Enter Contracts • Staff and Organisation • Operating Expenditure

UOW Pulse Ltd | 2017 Annual Report

• Audit, Risk Management & Compliance Committee • Student Advisory Committee (SAC)

STATE OF AFFAIRS There were no significant changes to the scope of operating activities of UOW Pulse during 2017. A range of service initiatives is discussed in the Review of Operations.

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

LIKELY DEVELOPMENTS Currently no likely developments to report.

Please note that for comparative purposes the 2017 Financial Statements include UniActive (Formerly URAC) in the 2017 financial information and exclude UniActive in the 2016 financial information as it traded as another entity in the previous year, being URAC.

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

FINANCIAL OUTCOMES The financial result for 2017 is an operating surplus of $2,587,486, which includes the operations of the former entity University of Wollongong Recreation & Aquatic Centre Limited (URAC). On 1 January 2017, UOW Pulse Ltd received the net assets of URAC less the debt forgiven by the parent entity which totalled $4,236,623. Revenue increased materially to $29,156,399, which represents an increase of 42%. This increase is mainly due to the inclusion of the URAC debt forgiveness and the revenue of the trading unit totalling $3,856,300. The operations of URAC trade under the name of UniActive within UOW Pulse. UOW Pulse total revenue increased by $8,559,241 during 2017, with UniActive’s revenue totalling $8,092,923. UniActive revenue includes trading revenue of $3,856,300 and debt forgiveness of $4,236,623. Year on year increases in revenue were experienced within the IGA Supermarket, UniBar, Aspire, Kids Uni, Tenancy and Sponsorship and Advertising. Trading revenue from other retail outlets including the Rush Cafes and UniShop experienced reduced revenue from the previous year. UniShop is facing increased competition in the sale of text books which materially impacts the reduction in unit revenue. The UniLife unit continued to provide interactive student engagement programs across the various UOW campuses with 282 events facilitated involving 47,972 participants. The reduction in events of 23% and reduction in participants of 8% directly relates to the Leadership Program, which is no longer facilitated by UniLife and is now managed by the parent entity. There was an increase in the support units within General Overheads which reflected the successful migration of UniActive’s operations into UOW Pulse. Whilst the year was challenging with the migration of UniActive into UOW Pulse and revenue reductions in traditional core units such as UniShop, there are opportunities for growth within emerging units such as the IGA supermarket, Aspire, UniBar and Kids Uni. UOW Pulse is focused on meeting the future needs of the campus both from a student engagement and retail perspective.

uowpulse.com.au/aboutus/governance

UOW Pulse Ltd | 2017 Annual Report

uowpulse.com.au/aboutus/governance

To the Directors UOW Pulse Ltd

Auditor's Independence Declaration As auditor for the audit of the financial statements of UOW Pulse Ltd for the year ended 31 December 2017, I declare, to the best of my knowledge and belief, there have been no contraventions of: the auditor independence requirements of the Corporations Act 2001 in relation to the audit any applicable code of professional conduct in relation to the audit.

Dominika Ryan Director, Financial Audit Services

13 April 2018 SYDNEY

UOW Pulse Ltd I 2017 Annual Report

DIRECTOR'S DECLARATION

In the opinion of the Directors of UOW Pulse Ltd ("the Company"):

The financial statements and notes, are in accordance with the provisions of the Public Finance and Audit Act 1983 and the Corporations Act 2001, including: a. Giving a true and fair view of the financial position of the Company as at 31 December 2017 and of their performance, as represented by the results of its operations and their cash flows, for the year ended on that date; and b.

Complying with Australian Accounting Standards and the Corporations Regulations 2001;

and 2.

There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

We are not aware of any circumstances that would render any particulars included in the financial reports to be misleading or inaccurate.

Dated at Wollongong, 17 April 2018.

Signed in accordance with a resolution of the Directors.

SIGNATURES

Sue Chapman

Alf Maccioni

Chair

Chief Executive Officer

Statement of Comprehensive Income For the Year Ended 31 December 2017

2017 Revenue from continuing operations Gain/(loss) on disposal of assets Raw materials and consumables used Employee related expenses Depreciation and amortisation expense Other expenses Finance costs Operating Result before income tax Income tax expense

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

1(d)

Operating Result for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year

$ 29,156,399 (259,154) (6,584,989) (14,322,889) (1,438,681) (3,938,729) (24,471)

2016 $ 20,597,158 (72,652) (6,472,859) (10,714,861) (959,424) (2,761,518) (1,600)

2,587,486 -

(385,756) -

2,587,486

(385,756)

2,587,486

(385,756)

The accompanying notes form part of these financial statements.

UOW Pulse Ltd | 2017 Annual Report

Statement of Financial Position As at 31 December 2017

Note

2017

2016

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

6 7 8 9

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

9 10 11

Total assets

4,356,586 1,609,746 1,886,729 392,991

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

8,246,052

5,653,131

2,554,055 7,295,893

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

9,849,948

7,002,000

18,096,000

12,655,131

5,780,640 159,475 1,354,427 223,981

2,675,823 840,784 304,977

7,518,523

3,821,584

318,380 196,331

179,373

514,711

179,373

8,033,234

4,000,957

10,062,766

8,654,174

10,062,766

8,654,174

10,062,766

8,654,174

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

12 13 14 15

Non current liabilities Borrowings Provisions Total non current liabilities

13 14

Total liabilities Net assets

EQUITY Retained earnings

Total equity

The accompanying notes form part of these financial statements.

uowpulse.com.au/aboutus/governance

Statement of Changes in Equity For the Year Ended 31 December 2017 2017 Retained Earnings $

Note Balance at 1 January 2017

Acquisition 1 January 2017 Total comprehensive income for the year

16 16

Balance at 31 December 2017

8,654,174 (1,178,894) 2,587,486 10,062,766

2016 Retained Earnings $

Note Balance at 1 January 2016

Total comprehensive income for the year

Balance at 31 December 2016

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

The accompanying notes form part of these financial statements.

UOW Pulse Ltd | 2017 Annual Report

Statement of Cash Flows

For the Year Ended 31 December 2017

Note CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers Payments to suppliers and employees Interest received Interest paid Net cash flows from operating activities

2017

2016

29,949,505 (27,505,880) 79,668 (24,471) 24

2,498,822

21,364,944 (21,225,934) 71,536 (1,600) 208,946

CASH FLOWS FROM INVESTING ACTIVITIES: Payments for property, plant and equipment Payments for intangibles Proceeds from sale of non-current assets

(705,436) (12,991) 249,823

(295,254) (11,300) -

Net cash used in investing activities

(468,604)

(306,554)

CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings Repayment of borrowings

41,949 (156,031)

(144,672)

Net cash used in financing activities

(114,082)

(144,672)

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

1,916,136 2,140,414 300,036

(242,280) 2,382,694 -

4,356,586

2,140,414

The accompanying notes form part of these financial statements.

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017

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 2017. The nature of the operations and principal activities of the Company are providing services primarily to students including childcare, entertainment, student engagement activities, retail and food, sporting, leisure, recreation and health and fitness. On 1 January 2017, UOW Pulse received the net assets of the University of Wollongong Recreation and Aquatic Centre Limited(URAC), less the debt forgiven by the parent entity. The debt forgiven totalled $4,236,603. (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 17th of April, 2018. The financial statements are presented in Australian dollars. Compliance with Australian Charities and Not-for-profit Commission The financial statement have been prepared in accordance with the Australian Charities and Not-for-profits Commissions Act 2012. Compliance with IFRS The financial statements of the Company do not comply with IFRS because the Company has adopted the not for profit requirements of the Australian Accounting Standards which are inconsistent with IFRS requirements. Historical cost convention The financial statements have been prepared under the historical cost convention except that the liability for long service leave is adjusted to net present value. Critical accounting estimates The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may 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.

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017

Summary of Significant Accounting Policies (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 Companyâ&#x20AC;&#x2122;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.

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017

Summary of Significant Accounting Policies (e) Leases Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases (note 10). Finance leases are capitalised at the leaseâ&#x20AC;&#x2122;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 assetâ&#x20AC;&#x2122;s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assetâ&#x20AC;&#x2122;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. 7

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017

Summary of Significant Accounting Policies (j) Investments and other financial assets Classification Investments and financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are categorised as either financial assets at fair value through profit or loss, loans and receivables, held to maturity investments, or available for sale financial assets. The classification depends on the purpose for which the investments were acquired. Designation is re evaluated at each reporting date, but there are restrictions on reclassifying to other categories. (i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading unless they are designated as hedges. Assets in this category are classified as current assets. (ii) Loans and receivables Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after reporting date which are classified as non current assets. Loans and receivables are included in receivables in the statement of financial position. (iii) Held to maturity investments Held to maturity investments are non derivative financial assets with fixed or determinable payments and fixed maturities that the Companyâ&#x20AC;&#x2122;s management has the positive intention and ability to hold to maturity. (iv) Available for sale financial assets Available for sale financial assets, comprising principally marketable equity securities, are non derivatives that are either designated in this category or not classified in any of the other categories. They are included in non current assets unless management intends to dispose of the investment within 12 months of reporting date. Regular purchases and sales of financial assets are recognised on trade date - the date on which the Company commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership. When securities classified as available for sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are included in the statement of comprehensive income as gains and losses from investment securities. Subsequent measurement Available for sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the statement of comprehensive income within other income or other expenses in the period in which they arise. Dividend income from financial assets at fair value through profit and loss is recognised in the statement of comprehensive income as part of revenue from continuing operations when the Company's right to receive payment is established. Fair value The fair values of investments and other financial assets are based on quoted prices in an active market. If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using valuation techniques, that maximise the use of relevant data. These include reference to the estimated price in an orderly transaction that would take place between market participants at the measurement date. Other valuation techniques used are the cost approach and the income approach based on the characteristics of the asset and the assumptions made by market participants. 8

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017

Summary of Significant Accounting Policies Impairment The Company assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available for sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss, is removed from equity and recognised in the statement of comprehensive income. Impairment losses recognised in the statement of comprehensive income on equity instruments are not reversed through the statement of comprehensive income in a subsequent period. (k) Property, plant and equipment (i) Owned Assets Property, plant and equipment is stated at historical cost less depreciation. Subsequent costs are included in the assetâ&#x20AC;&#x2122;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: 2017 Building improvements Plant and equipment Computer equipment Motor vehicles

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

2016 5 -10 years 3 -10 years 3 - 5 years 5 -10 years

The assetsâ&#x20AC;&#x2122; 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.

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017

Summary of Significant Accounting Policies (ii) Computer Software Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. Amortisation is calculated on a straight line basis over periods generally ranging from 3 to 5 years. (iii) Occupancy Contribution The Company contributes to the cost of construction of buildings, their improvements and landscaping on land over which it has no security or tenure. These amounts are accounted for in the statement of financial position as Occupancy Contribution, pursuant to an agreement reached with the University of Wollongong. The Company has the right to occupy these buildings for the life of the asset. 2017 Occupancy Contribution

30 - 40 Years

2016 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 managementâ&#x20AC;&#x2122;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.

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017

Summary of Significant Accounting Policies (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 employeesâ&#x20AC;&#x2122; 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 2017 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% (2016: 3%) - Discount rate 2.34% (2016: 2.24%) - Proportion of leave taken in service 18% (2016: 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 2017 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. 11

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017 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 1.25% (2016: 1.48%). At reporting date there were no significant concentrations of credit risk. The maximum exposure to credit risk by class of recognised financial assets is equivalent to the carrying value and classification of those financial assets (net of any provisions) as presented in the statement of financial position. Details with respect to credit risk of trade and other receivables are provided in Note 7.

(b)

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

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017

Financial risk management objectives and policies 31 December 2017

Average Interest Rate

Variable Interest Rate

Fixed Interest Rate

Non Interest

Less than 1 Year

1 to 5 Years

5+ Years

Total

4,356,586

1,609,746

120,000

6,086,332

Financial assets Cash and cash equivalents Receivables

1.25 2.60

Other financial assets Total Financial assets

Financial liabilities Payables

120,000

4,356,586

120,000

1,609,746

6,086,332

5,611,786

Borrowings- NAB

4.49

441,518

149,470

292,048

441,518

Borrowings- NAB

4.97

36,338

10,006

26,332

36,338

477,856

5,771,262

318,380

6,089,642

Average Interest Rate

Variable Interest Rate

Fixed Interest Rate

Non Interest

Less than 1 Year

1 to 5 Years

5+ Years

Total

2,140,414

1,240,425

120,000

Total financial liabilities

31 December 2016

Financial assets Cash and cash equivalents Receivables

1.48 2.65

120,000

2,140,414

120,000

1,240,425

3,500,839

2,649,085

Other financial assets Total Financial assets

Financial liabilities Payables Borrowings- Department of Social Services

7,500

Total Financial libilities

7,500

2,656,585

(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. (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 (2016: $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.

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017

Financial risk management objectives and policies (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 2017 is an increase or decrease of 1% based on the current Reserve Bank of Australia cash rate of 1.25%. 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 Companyâ&#x20AC;&#x2122;s financial assets and financial liabilities to interest rate risk and price risk.

Interest rate risk

31 December 2017

-1%

Price risk

+1%

Carrying amount

Profit

Equity

Profit

-1.304%

+1.304%

Equity Profit Equity Profit

Equity

Financial assets Cash and Cash Equivalents

4,356,586

43,566

Accounts receivable

1,609,746

Financial liabilities Trade payables

(43,566) (43,566) 43,566

5,611,786

Current borrowings

159,475

Non-current borrowings

318,380

Other financial liabilities

14,243

43,566

(43,566) (43,566) 43,566

Total increase/(decrease)

31 December 2016

Interest rate risk -1%

Price risk

+1%

Carrying amount

Profit

Equity

Profit

-1.304%

+1.304%

Equity Profit Equity Profit

Equity

Financial assets Cash and Cash Equivalents

2,140,414

21,404

Accounts receivable

1,240,425

Financial liabilities Trade payables

2,649,085

22,248

21,404

Other financial liabilities Total increase/(decrease)

(21,404) (21,404) 21,404

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017 3

Revenue From continuing operations

Sales revenue - Sale of goods - Provision of services

Other revenue - Interest - URAC debt forgiven - Rental income - Grants received - related parties - Other income

2017

2016

12,718,335 10,048,043

12,879,043 6,171,767

22,766,378

19,050,810

79,668 4,236,603 1,638,927 185,000 249,823

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

6,390,021

1,546,348

29,156,399

20,597,158

4 Gain/(loss) on disposal of assets 2017 Gain/(loss) on disposal of assets

2016

$ (259,154)

$ (72,652)

(259,154)

(72,652)

Expenses (a)

Employee benefits expense 2017 Wages and salaries Annual leave expense Long service leave expense Superannuation expense Workers compensation expense Other employee benefits

2016

$ 12,192,478 670,746 181,352 1,011,383 166,872 100,058

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

14,322,889

10,714,861

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017

Expenses

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

(b) Depreciation and Amortisation 2017

2016

Depreciation Building improvements Depreciation - motor vehicles Leased plant & equipment Plant and equipment Computer equipment

362,539 4,183 158,118 307,821 55,833

350,864 240,297 29,483

Total Depreciation

888,494

620,644

Amortisation Occupancy contribution Establishment costs Computer software

531,893 2,742 15,552

308,784 2,968 27,028

Total amortisation

550,187

338,780

1,438,681

959,424

Total depreciation and amortisation (c)

Other Expenses

Consultant fees Maintenance Advertising & Promotional Computer rental Auditor's remuneration - audit of financial statements Security Activity Expenses Cleaning Kids Uni Catering Bank charges Laundry Nappy Services Waste disposal Leasing cost Small Equipment Legal expenses

2017

2016

246,107 554,356 120,893 75,454 73,100 94,359 118,894 123,870 109,872 133,378 71,346 36,950 161,372 40,051 46,233 39,227

216,911 276,729 85,723 66,836 59,900 77,971 133,942 73,722 110,322 127,921 66,569 49,362 140,049 47,014 55,229 28,206 16

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017

Expenses (c)

Other Expenses 2017 Materials and Consumables Evening Entertainment Lunch Entertainment Other

$ 48,210 65,921 69,942 961,039

3,938,729

2,761,518

Current assets - Cash and cash equivalents

Cash at bank and on hand

2016

$ 92,546 84,968 89,345 1,626,408

2017

2016

4,356,586

Current assets - Trade and other receivables

2017

2,140,414

2016

$ 1,611,111 (1,365)

$ 1,246,162 (5,737)

Sub - Total

1,609,746

1,240,425

Total current trade and other receivables

1,609,746

1,240,425

Trade receivables Provision for impairment

(a)

Impaired trade receivables As at 31 December 2017 current trade receivables of the Company with a nominal value of $971,213 (2016: $854,615) were past due. Of this past due amount, $1,365 (2016: $5,737) was considered impaired and provided for. The individually impaired receivables mainly relate to Childrens Service, Events and Unishop customers, which are in unexpectedly difficult economic situations. The ageing of these receivables is as follows:

Over 6 months

2017

2016

$ 1,365

5,737

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017 7

Current assets - Trade and other receivables

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

2017 At 1 January Provision for impairment recognised during the year Receivables written off during the year as uncollectible At 31 December

2016

$ (5,737)

$ (8,753)

(128)

(4,228)

4,500

7,244

(1,365)

(5,737)

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 Companyâ&#x20AC;&#x2122;s exposure to credit risk, foreign currency and interest rate risk is provided in Note 2. As of 31 December 2017, trade receivables of $969,848 (2016: $848,878) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows: 2017

2016

1 to 3 months 3 to 6 months Over 6 months

$ 499,881 194,215 275,752

$ 577,882 40,366 230,630

At 31 December

969,848

848,878

Current assets - Inventories Inventories - at cost

2017

2016

$ 1,886,729

$ 2,069,036

1,886,729

2,069,036

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017

Current assets - Inventories

Write downs of inventories to net realisable value recognised as an expense during the year ended 31 December 2017 amounted to $79,017 (2016: $80,920). The expense has been included in â&#x20AC;&#x2DC;raw materials and consumables usedâ&#x20AC;&#x2122; in profit or loss.

Other non-financial assets

CURRENT Bank Guarantee Lease Incentive Prepayments Total current assets

NON-CURRENT Lease Incentive Total non-current assets

10 Non current assets - Property, plant and equipment

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

2017

2016

120,000 5,556 267,435

120,000 33,333 49,923

392,991

203,256

2017

2016

5,556

2017

2016

3,980,939 (3,049,510) 931,429

448,896

3,372,462 (2,261,644)

Total plant and equipment

1,110,818

Total motor vehicles

1,049,174

922,024 (473,128)

Plant and equipment Cost or fair value Accumulated depreciation

Motor vehicles Cost or fair value Accumulated depreciation

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

63,495 (57,918) 5,577

2,323,962 (1,506,522) 817,440 21,818 (21,818) -

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017

Non current assets - Property, plant and equipment

Computer equipment Cost or fair value Accumulated depreciation

250,584 (193,249)

181,587 (109,306)

Total computer equipment

57,335

72,281

2,554,055

1,938,895

Total property, plant and equipment

(a)

Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Building Leased Plant & improvements Equipment $ Year ended at 31 December 2017 Balance at the beginning of year Acquisition Addition

1,049,174

Plant and equipment

Motor vehicles

Computer equipment

Total

817,440

52,675

568,878

303,180

314,392

38,136

352,906

(54,887)

(36,871)

(2,901)

(216,932)

(307,821)

(4,183)

(55,833)

(888,494)

5,577

57,335

2,554,055

46,631

72,281

1,938,895

43,788

1,015,152

705,434

Disposals - written down value

(122,273)

Depreciation expense

(362,539)

(158,118)

Year ended at 31 December 2017

931,429

448,896

Year ended at 31 December 2016 Balance at the beginning of year

1,371,714

885,412

79,811

2,336,937

85,026

188,275

21,953

295,252

(56,702)

(15,950)

(350,864)

(240,297)

(29,483)

(620,644)

817,440

72,281

Additions Disposals - written down value Depreciation expense Year ended at 31 December 2016

1,049,174

1,110,818

(72,652) 1,938,893

11 Non current assets - Intangible Assets

Computer software Cost Accumulated amortisation and impairment Net carrying value Goodwill Cost Accumulated amortisation and impairment Net carrying value

2017

2016

175,419 (127,847)

127,461 (76,570)

47,572

50,891

180,192 (115,020)

225,225 (115,847)

65,172

109,378

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017

Non current assets - Intangible Assets

Occupancy contribution Cost Accumulated amortisation and impairment

17,290,265 (10,107,116)

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

Net carrying value

7,183,149

4,897,280

Total Intangibles

7,295,893

5,057,549

(a)

Movements in Carrying Amounts

Computer software

Goodwill

Occupancy contribution

Total

Year ended 31 December 2017 Net carrying amount at start of year Acquisition Additions Disposals Amortisation Closing value at 31 December 2017 Year ended 31 December 2016 Net carrying amount at start of year Additions Amortisation Closing value at 31 December 2016

50,891 12,991 (758) (15,552)

109,378 (41,464) (2,742)

4,897,281 2,817,761 (531,893)

5,057,550 2,817,761 12,991 (42,222) (550,187)

47,572

65,172

7,183,149

7,295,893

66,619 11,300 (27,028)

112,346 (2,968)

5,206,064 (308,784)

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

50,891

109,378

4,897,280

5,057,549

12 Current liabilities - Trade and other payables

2017

2016

Sundry creditors GST payable Accrued expenses

$ 72,907 168,854 5,538,879

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

Total Trade and other payables

5,780,640

2,675,823

Information about the Companyâ&#x20AC;&#x2122;s exposure to foreign exchange risk is provided in Note 2.

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017

13 Borrowings (a)

(b)

Current liabilities 2017

2016

Secured Financial lease Liability

159,475

Total current borrowings

159,475

Non-current liabilities 2017

2016

Secured Financial lease Liability

318,380

Total secured non-current borrowings

318,380

Total non-current borrowings

318,380

477,855

Total borrowings

14 Provisions (a)

Current liabilities 2017 Employee benefits - long service leave Employee benefits - annual leave Total current provisions

2016

$ 803,888 550,539

$ 397,726 443,058

1,354,427

840,784

The increase in provisions relates to the acquisition of URAC.

(b)

Non current liabilities 2017

2016

Employee benefits - long service leave

$ 196,331

$ 179,373

Total Non current provisions

196,331

179,373

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017

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.

2017 Long service leave obligation expected to be settled after 12 months Annual leave obligation expected to be settled after 12 months

$ 767,531 83,292

2016 $ 292,941 58,603

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

15 Other liabilities

2017

2016

CURRENT Department of Social Services Loan Deposits held Income in advance

14,243 209,738

7,500 14,748 282,729

Total current liabilities

223,981

304,977

16 Retained Earnings

2017

2016

Balance 1 January Acquisition 1 January 2017 Operating Result for the year

$ 8,654,174 (1,178,894) 2,587,486

$ 9,039,930 (385,756)

Retained earnings at 31 December

10,062,766

8,654,174

The balance as at 1 January 2017, includes the retained earnings of University of Wollongong Recreation and Aquatic Centre totalling ($1,178,894). The assets and liabilities arising from the acquisition are as follows. Recognition on acquisition $ Cash and cash equivalents Trade and other receivables Inventories Property, plant and equipment Occupancy contribution Trade and other payables

300,036 193,394 16,286 1,015,152 2,817,760 (4,438,666)

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017

Retained Earnings Recognition on acquisition $ (584,437) (497,215) (1,204)

Borrowings Provisions Other liabilities Total

(1,178,894)

17 Key Management Personnel Disclosures (a)

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

Chair

Sue Chapman (ii)

Executive Director

Melva Crouch (iii)

Non executive Directors

Daniel Crameri Sarah Lisle Kath McCollim Anita Mulrooney Nieves Murray Mary Youssif Murray Reid

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 2017

2016

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

221,534 20,392

262,061 28,471

Total Remuneration

241,926

290,532

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017

18 Remuneration of Auditors During the year the following fees were paid or payable for services provided by the auditor of the Company: 2017 2016 Audit Office of NSW Audit of financial statements

73,100

59,900

19 Commitments (a) (i)

Lease commitments Operating lease commitments Future Non Cancellable Operating Lease Rentals of Plant and Equipment The Company has entered into a commercial lease for computer equipment. The computer equipment lease is for three years. There are no restrictions placed upon the lessee by entering into these leases.The GST component of operating lease commitments for the year 2017 is $14,071 (2016: $11,277)

2017

2016

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

(ii)

Within one year Later than one year but not later than five years

123,691 149,038

58,974 65,266

Total Operating lease commitments

272,729

124,240

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 and/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:

2017

2016

Receivable - minimum lease payments: Within one year

921,112

638,515

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017

19 (ii)

Commitments Operating lease commitments receivable 2017

Later than one year but not later than five years

2016

$ 1,598,494

$ 729,415

2,519,606

1,367,930

Several tenants annual rent is based on a percentage of their turnover for the year. Contingent rent of $454,238 including GST (2016: $385,103) was received by the Company in the period. The total GST component of operating lease commitments receivable for the year 2017 is $137,839 (2016: $124,484) (iii) Hire purchase commitments The Commercial Hire Purchase Liability is an umbrella facility of up to $1,270,000 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 2017 the unused portion of the facility was $559,646 (2016: $500,000) and the portion of the facility in use was $710,354 (2016: nil). (b)

Capital commitments

The Company has a contractual obligation to purchase within the next 12 months, $97,405 of plant and equipment at reporting date (2016: 256,661).

(c)

Finance Lease Commitments Note

2017

2016

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

177,828 332,777

Total

510,605

Less: Future lease finance charges

(32,750)

Recognised as a liability

477,855

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

159,475 318,380

Total

477,855

uowpulse.com.au/aboutus/governance

Notes to the Financial Statements For the Year Ended 31 December 2017

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)

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

2017

2016

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

3,287,191 172,695 57,309 185,000

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

Total

3,702,195

2,361,332

2017

2016

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

1,216,475 -

797,394 122,609

Total

1,216,475

920,003

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) may enter into transactions with the Controlled Entity. These transactions are on the same terms and conditions as those entered into by the Company's employees or customers. (c)

Outstanding balances arising from sales/purchases of goods and services

2017

2016

Current receivables (sales of goods and services) Trade receivables

811,570

859,700

Current payables (purchases of goods) Trade creditors

162,121

119,180

UOW Pulse Ltd | 2017 Annual Report

Notes to the Financial Statements For the Year Ended 31 December 2017

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.

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 31/12/2016).

24 Reconciliation of Operating Results After Income Tax to Net Cash Flows From Operating Activities 2017 Operating result for the year Non-cash flows in profit: Amortisation Depreciation Net (gain)/loss on sale of non current assets Changes in assets and liabilities (Increase)/decrease in trade/term debtors Decrease/(increase) in prepayments/other debtors (Increase)/decrease in inventories (Increase)/decrease in bad debts allowance (Decrease)/increase in income in advance Increase/(decrease) in trade creditors/accruals Increase/(decrease) in other operating liabilities Increase/(decrease) in other provisions Net cash inflow/(outflow) from operating activities

$ 2,587,486

2016 $ (385,756)

550,187 888,494

338,780 620,644

9,331

72,652

(138,222)

(598,534)

(217,512) 198,593

(41,325) (49,672)

(4,372)

(3,016)

(74,195)

99,615

(1,333,849)

198,426

(505)

1,628

33,386 2,498,822

(44,496) 208,946

END OF AUDITED FINANCIAL REPORT.

uowpulse.com.au/aboutus/governance

UOW Pulse Ltd

ABN 28 915 832 337 ACN 081 114 089

University Recreation & Aquatic Centre Limited Financial Statements For the Year Ended 31 December 2017

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

Financial Statements For the Year Ended 31 December 2017

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

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

1 4 5 6 7 8 9 10 27

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

University of Wollongong Recreation & Aquatic Centre Limited Directors' Report 31 December 2017

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

University of Wollongong Recreation & Aquatic Centre Limited Directors' Report 31 December 2017 Company secretary The company secretary was Mr Paul Manning. Mr Manning was appointed to the position of company secretary in 1998 and resigned on 31 January 2017. Meetings of directors There were no meetings of the company's board of directors held during the year ended 31 December 2017.

Principal activities & review of operations On 22 April 2016, the University Council approved the restructure of University of Wollongong Recreation & Aquatic Centre Limited and Wollongong Unicentre Limited into a single entity UOW Pulse Limited effective from the 1 January 2017. The Council approved the transfer of URAC's existing activities and operations into UOW Pulse Limited on this restructure. On the 19 August 2016 the University Council approved a revised constitution of Unicentre in order to expand the objectives covering the range of services and activities offered by URAC. Wollongong Unicentre Limited changed its business name to UOW Pulse Limited on the 22 August 2016. On 1 January 2017 UOW Pulse received the net assets of the University of Wollongong Recreation and Aquatic Centre Limited less the debt forgiven by the parent entity. Results The Company did not trade during the year. The operating deficit after income tax for year ended 31 December 2016 was $602,424. Dividends - University of Wollongong Recreation & Aquatic Centre Limited Dividends are not payable by companies limited by guarantee. Therefore no dividends were declared or paid during the year (2016: nil). Proceeding on behalf of the entity Nil.

Matters subsequent to the end of the financial year In December 2016, the Board of URAC resolved to move forward with voluntary deregistration, the deregistration is planned to proceed and be completed in 2018.

INDEPENDENT AUDITOR’S REPORT University of Wollongong Recreation and Aquatic Centre Limited

To Members of the New South Wales Parliament and Members of the University of Wollongong Recreation and Aquatic Centre Limited

Opinion I have audited the accompanying financial statements of the University of Wollongong Recreation and Aquatic Centre Limited (the Company), which comprise the Statement of Profit or Loss and the Statement of Comprehensive Income for the year ended 31 December 2017, the Statement of Financial Position as at 31 December 2017, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration. In my opinion the financial statements: •

•

are in accordance with the Corporations Act 2001, including: -

giving a true and fair view of the Company’s financial position as at 31 December 2017 and its performance for the year ended on that date

complying with Australian Accounting Standards and the Corporations Regulations 2001

are in accordance with section 41B of the Public Finance and Audit Act 1983 (PF&A Act) and the Public Finance and Audit Regulation 2015.

My opinion should be read in conjunction with the rest of this report.

Basis for Opinion I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’ section of my report. I am independent of the Company in accordance with the requirements of the: •

Australian Auditing Standards

•

Corporations Act 2001

•

Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for Professional Accountants’ (APES 110).

I have fulfilled my other ethical responsibilities in accordance with APES 110. Parliament promotes independence by ensuring the Auditor-General and the Audit Office of New South Wales are not compromised in their roles by: •

providing that only Parliament, and not the executive government, can remove an AuditorGeneral

•

mandating the Auditor-General as auditor of public sector agencies

•

precluding the Auditor-General from providing non-audit services.

I confirm the independence declaration, required by the Corporations Act 2001, provided to the directors of the Company on 13 April 2018, would be in the same terms if provided to the directors as at the time of this Independent Auditor’s Report. I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Emphasis of Matter I draw attention to Note 1(a) Basis of Preparation and Note 22 Events Occurring After the Reporting Date, in the financial statements. The notes describe the Company’s intention to proceed with voluntary deregistration, and the financial statements have been prepared on a non-going concern basis. My opinion is not modified in respect of this matter.

Directors’ Responsibilities for the Financial Statements The directors of the Company are responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards, the PF&A Act, the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements My objectives are to: •

obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error

•

issue an Independent Auditor’s Report including my opinion.

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in accordance with Australian Auditing Standards will always detect material misstatements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions users take based on the financial statements. A description of my responsibilities for the audit of the financial statements is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar4.pdf. The description forms part of my auditor’s report. My opinion does not provide assurance: •

that the Company carried out its activities effectively, efficiently and economically

•

about the security and controls over the electronic publication of the audited financial statements on any website where they may be presented

•

about any other information which may have been hyperlinked to/from the financial statements.

Dominika Ryan Director, Financial Audit Services 20 April 2018 SYDNEY

University of Wollongong Recreation & Aquatic Centre Limited Beginning of audited financial statements Statement of Profit or Loss For the Year Ended 31 December 2017 2017

2016

Note

Revenue from continuing operations

3,591,382

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

3(a) 4 5

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

Income tax expense Surplus/(Deficit) after income tax

1(c)

(602,424)

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

University of Wollongong Recreation & Aquatic Centre Limited Statement of Comprehensive Income For the Year Ended 31 December 2017 2017

2016

Surplus/(Deficit) after income tax

(602,424)

Total comprehensive income for the year

(602,424)

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

(602,424)

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

University of Wollongong Recreation & Aquatic Centre Limited Statement of Financial Position As at 31 December 2017 2017

2016

Note

6 7 8 9 10(a)

10(b)

ASSETS

CURRENT ASSETS

Cash and cash equivalents Trade and other receivables Inventories Property, plant and equipment Occupancy contribution TOTAL CURRENT ASSETS

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

NON-CURRENT ASSETS

Occupancy Contribution TOTAL ASSETS

4,342,628

11 12(a) 13(a) 14(a)

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

12(b) 13(b) 14(b)

LIABILITIES CURRENT LIABILITIES

Trade and other payables Borrowings Provisions Other TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES

Borrowings Provisions Other

TOTAL LIABILITIES

5,521,522

NET ASSETS

(1,178,894)

EQUITY Retained profit TOTAL EQUITY

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

University of Wollongong Recreation & Aquatic Centre Limited Statement of Changes in Equity For the Year Ended 31 December 2017

Note Total equity at the beginning of the financial year 1 January 2017 Total comprehensive income

Transfer of equity to UOW Pulse Total equity at 31 December 2017

Note Total equity at the beginning of the financial year 1 January 2017 Total comprehensive income Total equity at 31 December 2016

Retained Profits

Total

2017

(1,178,894) -

1,178,894 -

Retained Profits

Total

2016

(576,470) (602,424)

(1,178,894)

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

University of Wollongong Recreation & Aquatic Centre Limited Statement of Cash Flows For the Year Ended 31 December 2017 2017

2016

Note

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

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

Inflows from financing activities Repayment of finance lease Net cash inflow (outflow) from financing activities

668,404 (206,929) 461,475

Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at end of year

179,302 120,734 300,036

CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers Payments to suppliers and employees

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

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

CASH FLOWS FROM FINANCING ACTIVITIES

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

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Significant Accounting Policies

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

Basis of Preparation (i) Statement of compliance The general purpose financial statement has been prepared in accordance with Australian Accounting Standards (which includes Australian Accounting Interpretations), the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation 2015 and the Corporations Act 2001. They have been prepared on an accrual basis and comply with the Australian Accounting Standards. The entity is a not-for-profit entity and these statements have been prepared on that basis. Some of the requirements for not-for-profit entities are inconsistent with the IFRS requirements. The financial statements of the Company for the year ended 31 December 2017 were authorised for issue on 13 April 2018. The financial statements are presented in Australian dollars. (ii) Basis of measurement The financial statements are prepared on a non-going concern basis and on the historical cost basis based on the letter of support from the Controlling Entity. The preparation of the financial statements in conformity with Australian Accounting Standards (which includes Australian Accounting Interpretations) requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimated and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgements made by management in the application of Australian Accounting Standards (which includes Australian Accounting Interpretations) that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note (n). The liability for long service leave is adjusted to net present value. (iii) Deficiencies in Net assets The Statement of Financial Position shows a deficiency of $nil for Net Assets (2016 $1,178,894). The company has considered the deficiency when preparing the financial statements and has been provided a letter of support from the parent entity. On the 22 April 2016, University Council approved the restructure of the company and its existing activities and operations will be transferred into UOW Pulse Limited from the 1 January 2017. Upon the transfer, UOW Pulse will receive the net assets of the University of Wollongong Recreation and Aquatic Centre Limited less the debt forgiven by the parent entity. These events necessitated changes being made to the companyâ&#x20AC;&#x2122;s financial statements which were amended to reflect the non-going concern basis of preparation. This resulted in the reclassification of its non-current assets and liabilities to current assets and liabilities. In December 2016, the Board of URAC resolved to move forward with voluntary deregistration.

(b)

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

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Significant Accounting Policies

(b)

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

(c)

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

(d)

Leases Leases of property, plant and equipment where the Company, as lessee, have substantially all the risks and rewards of ownership are classified as finance leases (note 13). Finance leases are capitalised at the leaseâ&#x20AC;&#x2122;s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding borrowings, net of finance charges, are included in borrowings. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the assetâ&#x20AC;&#x2122;s useful life and the lease term. Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases (note 19). Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight line basis over the period of the lease.

(e)

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

(f)

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

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Significant Accounting Policies

(g)

Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days. Short term receivables are recognised at original invoice amount because the impact of discounting is immaterial. The amount of the impairment loss is recognised in the income statement within â&#x20AC;&#x2DC;other expensesâ&#x20AC;&#x2122;. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the income statement. Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off. A provision for impairment of receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables.

(h)

Property, plant and equipment Items of property, plant & equipment are stated at cost less accumulated depreciation. The cost of self-constructed assets includes the cost of materials and direct labour. Where parts of an item of property, plant & equipment have different useful lives, they are accounted for as separate items of property, plant & equipment. From time to time the Company contributes to the cost of construction of buildings, their improvements and landscaping on land over which it has no security. These amounts are accounted for in the statement of financial position as Occupancy Contribution, pursuant to an agreement reached with the University of Wollongong. The Occupancy Contribution is recognised as an asset as it gives the Company the right to occupy and use the buildings, and is amortised at a rate which the Company believes best reflects the expected useful life of such contribution. The Company recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when the cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the Company and the cost of the item can be measured reliably. All other costs are recognised in the income statement as an expense as incurred. Depreciation on other assets is calculated using the straight line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows: 2017 2016 - Building Improvements 10 years 10 years - Occupancy Contribution 13-36 years 13-36 years - Computer Equipment 3 years 3 years - Plant & Equipment** 4-10 years 4-10 years **Plant & equipment includes the following sub categories: general equipment, unigym/unicircuit equipment, leased equipment, furniture & fittings, motor vehicles, pool equipment, hockey equipment and sports hub equipment. The assetsâ&#x20AC;&#x2122; residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. All assets acquired including property, plant and equipment and intangibles other than goodwill are initially recorded at their cost of acquisition at the date of acquisition, being the fair value of consideration provided plus incidental costs directly attributable to the acquisition. Expenditure, including that on internally generated assets other than research and development costs is only recognised as an asset when the entity controls future economic benefits as a result of the costs incurred, it is probable that those future economic benefits will eventuate, and the costs can be measured reliably. Costs attributable to feasibility and alternative approach assessments are expensed as incurred. Items of plant and equipment less than $5,000 are expensed as incurred.

(i)

Trade and other payables Trade and other payables are stated at cost, which is considered to approximate amortised cost due to their short term nature. Recognition of trade and other payables occurs when goods and services have been received and obligation to make future payments arises. 12

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Significant Accounting Policies

(i)

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

(j)

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

(k)

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

(l)

Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(m)

Borrowings Borrowings are initially recognised at fair value. They are subsequently measured at amortised cost using the effective interest method. Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs. Borrowings are classified as current liabilities unless the 13

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Significant Accounting Policies

(m)

Borrowings Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(n)

New Accounting Standards and Interpretations Certain new Accounting Standards and Interpretations have been published that are not mandatory for 31 December 2017 reporting period. The company has not early adopted any new account Accounting Standards and Interpretations that are not yet effective, as there are no Accounting Standards and Interpretations that will have a material effect on the companyâ&#x20AC;&#x2122;s financial statements. The Company has assessed the impact of these new Accounting Standards and Interpretations and considers the impact to be insignificant.

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Financial Risk Management

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

31 December 2017

Interest rate risk -1%

+1%

Carrying amount

Result

Equity

Result

Equity

Financial assets Cash and cash equivalents

Trade and other receivables

Financial liabilities

Trade payables

Finance lease liability

Total increase/(decrease)

31 December 2016

Interest rate risk -1%

+1%

Carrying amount

Result

Equity

Result

Equity

Financial assets Cash and cash equivalents

300,036

(3,004)

3,004

Trade and other receivables

193,394

Financial liabilities

4,400,316

584,437

3,004

Trade payables Finance lease liability Total increase/(decrease)

(3,004)

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

2 (b)

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

(c)

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

(c)

2 Liquidity risk

Financial Risk Management

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

2016

2017

193,394

5,600

2016

2017

193,394

300,036

2016

2017

Total 2016

Non-Interest

2017

5+ years

2016

294,436

2017 2016 2017 2016

2017 %

Variable interest rate Within 1 year 1 to 5 years

% 1.50

198,994

493,430

294,436

4,400,316 584,437

4,400,316 -

142,919

441,518 -

4,984,753

4.49

4,400,316

142,919

441,518

Average Interest rate

The following tables summarise the maturity of the Companyâ&#x20AC;&#x2122;s financial assets and financial liabilities:

Financial Assets: Cash at bank Trade and other receivables Total Financial Assets Financial Liabilities: Trade and other payables Financial liabilities Total Financial Liabilities

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Revenue

Trading income - revenue from rendering of services Interest Rents

(a)

2016

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

Other Income

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

2017

2016

38,914

Expenses

Profit before income tax includes the following specific expenses:

2017

2016

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

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

Total depreciation and amortisation

543,137

14,774 7,602 22,376

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

Employee related expenses

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

2017

2016

$ -

$ 2,401,594 239,682

2,641,276

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Current assets - Cash and cash equivalents

2017

2016

$ -

2017

2016

193,394 193,394

Cash on hand Cash at bank

Current assets - Trade and other receivables

Net trade receivables Trade receivables

(a)

5,600 294,436 300,036

Impaired receivables

As at 31 December 2017 trade receivables of $0.00 (2016: $31,220) were past due.

20,464 10,756 31,220

Opening balance Write off

(10,749) 7,192

Recovered

3,557

Closing Balance

31,220

1 to 6 months Over 6 months

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

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

Inventories

At cost: Inventories

2017

2016

16,286

44,434

(3,666)

9,569

Depreciation charge Closing net book amount

(44,434)

(9,569)

Depreciation charge Closing net book amount

Reclassification to current assets Net book amount

Accumulated depreciation

Cost

Disposals

At 31 December 2017

Additions

91,476

(47,042)

24,530

(14,961)

(1,219)

Opening net book amount

2017

Year ended 31 December

Reclassification to current assets

At 31 December 2016 Cost Accumulated depreciation

(7,697)

(4,535)

Disposals

23,390

29,960

17,770

Additions

29,960

Year ended 31 December 2016 Opening net book amount

17,770

Net book amount

11,363

135,234

(105,274)

50,488

(32,718)

6,103

(4,966)

(6,397)

11,363

4,966

(1,137)

6,103

(5,260)

(58)

(101,338)

(323,271)

424,609

101,338

(32,964)

134,360

(362,190)

496,550

3,867

(1,658)

(87,899)

89,557

1,658

(2,209)

3,867

(99,970)

103,837

Pool Hockey Plant and Fixtures equipment equipment equipment and fittings $

Unigym / unicircuit equipment

Property, plant and equipment

At 1 January 2016 Cost Accumulated depreciation

(46,631)

(45,324)

91,955

46,631

(17,353)

63,984

(27,971)

91,955

Motor vehicles

(568,878)

(388,171)

957,049

568,878

(151,461)

606,804

113,535

(644,113)

757,648

(141,215)

(360,075)

501,290

141,215

(50,129)

191,344

(309,946)

501,290

(52,675)

(680,879)

733,554

52,675

(30,845)

5,600

77,920

(709,980)

787,900

2,982,557

Total

3,001,866

1,015,152

(320,030)

(5,812)

695,371

645,623

(43,788) (1,015,152)

(32,695) (1,986,714)

76,483

43,788

(22,569)

59,577

6,780

(39,512) (2,336,934)

46,292

Leased plant Sports hub Building Computer & equipment equipment improvements equipment

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Occupancy contribution

(a)

Current

2017

2016

Reclassification from non-current assets

$ -

$ 2,817,760

Net book amount

2,817,760

Opening balance Accumulated amortisation

(b)

Non-current Assets

2017

2016

Occupancy Contribution

7,469,127

Accumulated amortisation Opening balance Amortisation for the year Closing balance

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

Reclassification to current assets

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

Current Liabilities - Trade and other payables

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

Financial Liabilities - Secured

(a)

Current financial liabilities

Finance lease liability

2017 $ -

2017

2016 $ 4,236,623 202,043 4,438,666

2016

$ -

$ 584,437

584,437

The Company has access to the following facilities. As at 31 December 2017 the Company had access to leasing facility of nil (2016: $770,000) and business credit card facility of nil (2016: $50,000). Facilities that were utilised at balance date were leasing facility of nil (2016: $584,437). Business credit card facility of nil (2016: $5,995).

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Financial Liabilities - Secured

(b)

Non-current financial liabilities

2017

2016

Finance lease liability

$ -

$ 441,518

Reclassification to current liabilities

(441,518)

Provisions

(a)

Current-liabilities - Provisions

Long Service Leave Annual Leave

2017

2016

$ -

$ 391,562 105,653 497,215

Amounts expected to be settled within the next 12 months: The current provision for long service leave and annual leave includes all unconditional entitlements where employees have completed the required period of service. The entire amount is represented as current. Based on past experience, the following amounts reflected leave that is expected to be settled within the next 12 months: Annual Leave: nil (2016: $65,000) Long Service Leave: nil (2016: $20,000) (b)

Non-current liabilities - Provisions

Long Service Leave Reclassification to current liabilities

2017

2016

$ -

$ 36,119 (36,119) -

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Current liabilities - Other

(a)

Current

Unclaimed money (b)

Retained profits

Opening retained profits Surplus/(deficit) for the year Transfer of equity to UOW Pulse Balance at 31 December

2016

$ -

2017

2016

$ -

2017

2016

1,204

Non-Current

Unclaimed money Reclassification to current liabilities

2017

Remuneration of Auditors

Audit of financial statements

$ (1,178,894) 1,178,894 -

1,204 (1,204)

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

2017

2016

$ -

$ 22,473

17 Contingencies (a) Contingent Liabilities There are no known contingent liabilities existing at balance date (nil at 31 December 2016). (b) Contingent Assets There are no known contingent assets existing at balance date (nil at 31 December 2016).

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Commitments

(a)

Capital expenditure commitments

No Capital commitments at balance date (nil at 31 December 2016). (b) Lease commitments

2017

2016

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

637,264 637,264

Less: Future lease finance charges Recognised as a liability

(52,827) 584,437

584,437 584,437

(i) Finance lease commitments

Representing lease liabilities: Current (note 12(a))

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

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

2017

2016

$ -

229,519

55,000 174,519

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

19 (a)

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

(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: ď&#x201A;ˇ controlling entity of the Company: and ď&#x201A;ˇ commonly controlled entities

(d)

Controlling entity disclosures - University of Wollongong

Other transactions with the controlling entity:

2017

2016

Sales

930,886

Goods and services

747,273

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

Balances with the controlling entity:

Receivables Intercompany balance Payables

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

Other related parties The Company enters into transactions with other entities controlled by the University of Wollongong: UOW Pulse Limited and UOWD Ltd and its controlled entities (UOWC Ltd and the Community College of City University Ltd). No material transactions which were outside the company's normal operating activities were entered into for the year ended 31 December 2017.

University of Wollongong Recreation & Aquatic Centre Limited Notes to the Financial Statements For the Year Ended 31 December 2017

Economic dependency The Company's trading activities do not depend upon a major customer or supplier. However, the Company is economically dependent upon the continued existence of the operating and financial arrangements it has with the University of Wollongong. These include: ď&#x201A;ˇ Free use of buildings and land used for sporting facilities ď&#x201A;ˇ Short term cash flow relief for payments made on the Company's behalf.

Reconciliation of surplus/(deficit) after income tax to net cash inflow from operating activities 2017

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

$ -

2016 $ (602,424) 543,137 (38,914) 34,361 2,659 237 474,647 (45,233) 368,470

Events Occurring After the Reporting Date

In December 2016, the Board of URAC resolved to move forward with voluntary deregistration, the deregistration is planned to proceed and be completed in 2018.

End of audited financial statements.

Independent Audit Report to the members of University of Wollongong Recreation & Aquatic Centre Limited

The Sydney Business School Limited Financial Statements For the Year Ended 31 December 2017

The Sydney Business School Pty Ltd ACN: 113 001 399

Financial Statements For the Year Ended 31 December 2017

The Sydney Business School Pty Ltd ACN: 113 001 399

Contents

For the Year Ended 31 December 2017

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

1 2 3 4 5 6

INDEPENDENT AUDITOR’S REPORT The Sydney Business School Pty Ltd

To Members of the New South Wales Parliament

Opinion I have audited the accompanying financial statements of The Sydney Business School Pty Ltd (the Company), which comprise the Statement of Comprehensive Income for the year ended 31 December 2017, the Statement of Financial Position as at 31 December 2017, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information. In my opinion, the financial statements: •

give a true and fair view of the financial position of the Company as at 31 December 2017, and of its financial performance and its cash flows for the year then ended in accordance with Australian Accounting Standards

•

are in accordance with section 41B of the Public Finance and Audit Act 1983 (PF&A Act) and the Public Finance and Audit Regulation 2015.

My opinion should be read in conjunction with the rest of this report.

Australian Auditing Standards

•

Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for Professional Accountants’ (APES 110).

providing that only Parliament, and not the executive government, can remove an AuditorGeneral

•

mandating the Auditor-General as auditor of public sector agencies

•

precluding the Auditor-General from providing non-audit services.

I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Directors’ Responsibilities for the Financial Statements The Directors are responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the PF&A Act, and for such internal control as the Directors determine is necessary to enable the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting except where the Company will be dissolved by an Act of Parliament or otherwise cease operations.

Auditor’s Responsibilities for the Audit of the Financial Statements My objectives are to: •

obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error

•

issue an Independent Auditor’s Report including my opinion.

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in accordance with Australian Auditing Standards will always detect material misstatements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions users take based on the financial statements. A description of my responsibilities for the audit of the financial statements is located at the Auditing and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar4.pdf. The description forms part of my auditor’s report. My opinion does not provide assurance: •

that the Company carried out its activities effectively, efficiently and economically

•

about the security and controls over the electronic publication of the audited financial statements on any website where they may be presented

•

about any other information which may have been hyperlinked to/from the financial statements.

Dominika Ryan Director, Financial Audit Services

20 April 2018 SYDNEY

The Sydney Business School Pty Ltd ACN: 113 001 399

Statement of Comprehensive Income For the Year Ended 31 December 2017

2017

2016

Revenue

$ -

Profit before income tax Income tax expense

Profit from continuing operations Profit/(loss) from discontinued operations

Profit for the year

Other comprehensive income

Total comprehensive income for the year

Note

The accompanying notes form part of these financial statements.

The Sydney Business School Pty Ltd ACN: 113 001 399

Statement of Financial Position As at 31 December 2017

Note

2017

2016

ASSETS CURRENT ASSETS Cash on hand TOTAL CURRENT ASSETS TOTAL ASSETS TOTAL LIABILITIES

NET ASSETS

EQUITY Issued capital

TOTAL EQUITY

The accompanying notes form part of these financial statements.

Equity as at 31 December 2016

The accompanying notes form part of these financial statements.

1 -

Equity as at 31 December 2016 Changes in equity

$ 1

Total $

Issued capital

Equity as at beginning of year

2016

Equity as at 31 December 2017

1 -

Equity as at 31 December 2017 Changes in equity

$ 1

Total

Issued capital

Equity as at beginning of year

2017

For the Year Ended 31 December 2017

Statement of Changes in Equity

The Sydney Business School Pty Ltd ACN: 113 001 399

Statement of Cash Flows

For the Year Ended 31 December 2017 2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES: Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES: Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES: Net cash provided by (used in) financing activities

Note

Cash on hand at beginning of year

Cash on hand at end of financial year

The accompanying notes form part of these financial statements.

The Sydney Business School Pty Ltd ACN: 113 001 399

Notes to the Financial Statements For the Year Ended 31 December 2017

The financial statements cover The Sydney Business School Pty Ltd as an individual entity. 1

Summary of Significant Accounting Policies (a)

Statement of Compliance The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, the Public Finance and Audit Act 1983 and the Public Finance and Audit Regulation 2015. The financial statements for the year ended 31 December 2017 were authorised for issue in accordance with a resolution of the Board on the 13 April 2018.

(b)

Basis of Preparation The financial statements are presented in Australian dollars, rounded to the nearest dollar. The financial statements are prepared on the historical cost basis.

(c)

Corporate Information The University of Wollongong has The Sydney Business School Pty Ltd registered for its business name only. The School is the graduate school of the Faculty of Business and offers postgraduate business programs at the Sydney CBD Campus located at Circular Quay in Sydney, and the University's Main Campus in Wollongong. The revenue and expenses associated with the Sydney Business School Campus are reflected in the University of Wollongong's financial statements. It was registered in Victoria. Company type registered with ASIC:

Limited by shares / proprietary company

Australian Company Number:

113 001 399

Commencement of Registration:

17th February 2005

Business Address:

University of Wollongong Level 8/9 Gateway Building 1 Macquarie place Sydney NSW 2000

The Sydney Business School Pty Ltd ACN: 113 001 399

Notes to the Financial Statements For the Year Ended 31 December 2017

Summary of Significant Accounting Policies (d)

Adoption of new and revised accounting standards During the current year, the Company adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory. The adoption of these Standards has not impacted the recognition, measurement and disclosure of certain transactions. The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The Company has decided against early adoption of these Standards. The new and amended standards are unlikely to materially affect the Company's financial statements.

Issued Capital

2017

2016

$ Ordinary shares Movement during the year Closing balance 3

$ 1

1 -

Remuneration of Auditors Remuneration of the audit fees incurred by the Audit Office of NSW are covered by the parent entity, the University of Wollongong.

Contingencies In the opinion of the Directors, the Company did not have any contingencies at balance date (nil at 31 December 2016).

Economic dependency The Company does not trade and therefore does not have an economic dependency on the University of Wollongong.

The Sydney Business School Pty Ltd ACN: 113 001 399

Notes to the Financial Statements For the Year Ended 31 December 2017 6

Events Occurring After the Reporting Date There are no other matters or circumstances that 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.

End of audited financial statements

University of Wollongong USA Foundation Financial Statements For the Year Ended 31 December 2017

The University of Wollongong USA Foundation Financial Statements

For the Year Ended 31 December 2017 For the Year Ended 31 December 2017

The University of Wollongong USA Foundation

Contents

For the Year Ended 31 December 2017

Page Financial Statements Trustees Certification Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements

1 2 3 4 5 6

INDEPENDENT AUDITOR’S REPORT The University of Wollongong USA Foundation

To Members of the New South Wales Parliament

Opinion I have audited the accompanying financial statements of The University of Wollongong USA Foundation (the Foundation), which comprise the Statement of Comprehensive Income for the year ended 31 December 2017, the Statement of Financial Position as at 31 December 2017, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information. In my opinion, the financial statements: •

give a true and fair view of the financial position of the Foundation as at 31 December 2017, and of its financial performance and its cash flows for the year then ended in accordance with Australian Accounting Standards

•

are in accordance with section 41B of the Public Finance and Audit Act 1983 (PF&A Act) and the Public Finance and Audit Regulation 2015.

My opinion should be read in conjunction with the rest of this report.

Basis for Opinion I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’ section of my report. I am independent of the Foundation in accordance with the requirements of the: •

Australian Auditing Standards

•

Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for Professional Accountants’ (APES 110).

providing that only Parliament, and not the executive government, can remove an Auditor-General

•

mandating the Auditor-General as auditor of public sector agencies

•

precluding the Auditor-General from providing non-audit services.

I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

The Trustees’ Responsibilities for the Financial Statements The Trustees are responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the PF&A Act and for such internal control as the Trustees determine is necessary to enable the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Trustees are responsible for assessing the Foundation’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting except where the Foundation will be dissolved by an Act of Parliament or otherwise cease operations.

Auditor’s Responsibilities for the Audit of the Financial Statements My objectives are to: •

obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error

•

issue an Independent Auditor’s Report including my opinion.

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in accordance with Australian Auditing Standards will always detect material misstatements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions users take based on the financial statements. A description of my responsibilities for the audit of the financial statements is located at the Auditing and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar4.pdf. The description forms part of my auditor’s report. My opinion does not provide assurance: •

that the Foundation carried out its activities effectively, efficiently and economically

•

about the security and controls over the electronic publication of the audited financial statements on any website where they may be presented

•

about any other information which may have been hyperlinked to/from the financial statements.

Dominika Ryan Director, Financial Audit Services

20 April 2018 SYDNEY

The University of Wollongong USA Foundation

Statement of Comprehensive Income For the Year Ended 31 December 2017

2017

2016

$ 13 (1)

Revenue Finance costs Profit before income tax Income tax expense

Profit from continuing operations Profit/(loss) from discontinued operations

Profit for the year

12 12 12

2,477 -

2,477 2,477 2,477

Other comprehensive income: Exchange differences on translating foreign operations

(10,517)

1,432

Other comprehensive income for the year, net of tax

(10,517)

1,432

Total comprehensive income for the year

(10,505)

3,909

The accompanying notes form part of these financial statements.

The University of Wollongong USA Foundation

Statement of Financial Position As at 31 December 2017

Note ASSETS CURRENT ASSETS Cash and cash equivalents

TOTAL CURRENT ASSETS TOTAL ASSETS LIABILITIES Trade and other payables TOTAL LIABILITIES NET ASSETS

EQUITY Reserves Retained earnings

TOTAL EQUITY

The accompanying notes form part of these financial statements.

2017

2016

134,946

145,451

134,946

145,451

134,946

145,451

134,946

145,451

(587) 135,533

9,930 135,521

134,946

145,451

134,946

145,451

The University of Wollongong USA Foundation

Statement of Changes in Equity For the Year Ended 31 December 2017 2017 Retained Earnings

Foreign Currency Translation Reserve

Total

Balance at 1 January 2017 Profit for the year Gain/(loss) on foreign exchange

135,521 12 -

9,930 (10,517)

Balance at 31 December 2017

135,533

(587)

145,451 12 (10,517) 134,946

2016

Balance at 1 January 2016

Retained Earnings

Foreign Currency Translation Reserve

Profit for the year Gain/(loss) on foreign exchange

133,044 2,477 -

Balance at 31 December 2016

135,521

The accompanying notes form part of these financial statements.

Total $

8,498 1,432

141,542 2,477 1,432

9,930

145,451

The University of Wollongong USA Foundation

Statement of Cash Flows

For the Year Ended 31 December 2017 2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers Finance costs

13 (1)

Net cash provided by (used in) operating activities

2,477 2,477

CASH FLOWS FROM INVESTING ACTIVITIES: Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES: Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of financial year

2,477

145,451

141,542

(10,517) 2

The accompanying notes form part of these financial statements.

134,946

1,432 145,451

The University of Wollongong USA Foundation

Notes to the Financial Statements For the Year Ended 31 December 2017

These financial statements cover The University of Wollongong USA Foundation as an individual entity. 1

Summary of Significant Accounting Policies (a)

Basis of Preparation The financial statements are presented in Australian dollars, rounded to the nearest dollar.

(b)

Corporate Information The University of Wollongong USA Foundation was registered in Delaware USA on 20 March 2013. On registration the Foundation was initially named the Friends of the University of Wollongong Fund. On 28 August 2013 the name was changed to The University of Wollongong USA Foundation. Company type registered:

Corporation

USA Employer Identification Number:

42-1774364

Commencement of Registration:

20 March 2013

Business Address:

1300 Avenue of the Americas, Suite 23A New York NY

10019

USA

(c)

Foreign currency transactions and balances Functional and presentation currency The functional currency of The University of Wollongong USA Foundation entity is measured using the currency of the primary economic environment in which the entity operates. For The University of Wollongong USA Foundation, this is in US Dollars. The financial statements are presented in Australian dollars which is the parent entity's functional and presentation currency. Balances have been translated at the year-end exchange rate.

The University of Wollongong USA Foundation

Notes to the Financial Statements For the Year Ended 31 December 2017

Summary of Significant Accounting Policies (d)

Adoption of new and revised accounting standards During the current year, the Foundation adopted all of the new and revised mandatory Australian Accounting Standards and Interpretations applicable to its operations. The adoption of these Standards has not impacted the recognition, measurement and disclosure of certain transactions. The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The Foundation has decided against early adoption of these Standards. The new and amended standards are unlikely to materially affect the Foundation's financial statements.

Cash and cash equivalents

2016

Cash at bank and on hand

$ 134,946

$ 145,451

Total cash and cash equivalents

134,946

145,451

Retained Earnings

Retained earnings at 1 January Profit for the year Retained earnings at 31 December 4

2017

2016

$ 135,521 12

$ 133,044 2,477

135,533

135,521

Remuneration of Auditors Remuneration of the audit fees incurred by the Audit Office of NSW are covered by the parent entity, the University of Wollongong.

Contingencies In the opinion of the Trustees the Foundation did not have any contingencies at reporting date (nil as at 31 Dec 2016).

The University of Wollongong USA Foundation

Notes to the Financial Statements For the Year Ended 31 December 2017

Related Parties (a)

Entities exercising control over the Group The ultimate parent entity, which exercises control over the Foundation, is the University of Wollongong.

(b)

Transactions with related parties The University of Wollongong provides administrative and governance support for the Foundation. Services paid by the University of Wollongong on behalf of the Foundation in 2017 amounted to $37,772 (2016: $16,340).

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

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

End of audited financial statements

UW Asset Trust Financial Statements For the Year Ended 31 December 2017

UW Asset Trust

Contents

For the Year Ended 31 December 2017

Page Financial Statements Trustees' Declaration Income Statement Statement of Profit or Loss and Other Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements

1 2 3 4 5 6 7

INDEPENDENT AUDITOR’S REPORT UW Asset Trust

To Members of the New South Wales Parliament

Opinion I have audited the accompanying financial statements of UW Asset Trust (the Trust), which comprise the Income Statement and the Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2017, the Statement of Financial Position as at 31 December 2017, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information. In my opinion, the financial statements: •

give a true and fair view of the financial position of the Trust as at 31 December 2017, and of its financial performance and its cash flows for the year then ended in accordance with Australian Accounting Standards

•

are in accordance with section 41B of the Public Finance and Audit Act 1983 (PF&A Act) and the Public Finance and Audit Regulation 2015.

My opinion should be read in conjunction with the rest of this report.

Basis for Opinion I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’ section of my report. I am independent of the Trust in accordance with the requirements of the: •

Australian Auditing Standards

•

Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for Professional Accountants’ (APES 110).

providing that only Parliament, and not the executive government, can remove an AuditorGeneral

•

mandating the Auditor-General as auditor of public sector agencies

•

precluding the Auditor-General from providing non-audit services.

I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Emphasis of Matter I draw attention to Note 1 Basis of Preparation and Note 13 Events Occurring After the Reporting Date, in the financial statements. The notes describe the Trustees’ intention to wind up the Trust in 2018, and as a result, the financial statements have been prepared on a non-going concern basis. My opinion is not modified in respect of this matter.

The Trustees’ Responsibilities for the Financial Statements The Trustees are responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the PF&A Act and for such internal control as the Trustees determine is necessary to enable the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Trustees are responsible for assessing the Trust’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements My objectives are to: •

obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error

•

issue an Independent Auditor’s Report including my opinion.

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in accordance with Australian Auditing Standards will always detect material misstatements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions users take based on the financial statements. A description of my responsibilities for the audit of the financial statements is located at the Auditing and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar4.pdf. The description forms part of my auditor’s report. My opinion does not provide assurance: •

that the Trust carried out its activities effectively, efficiently and economically

•

about the security and controls over the electronic publication of the audited financial statements on any website where they may be presented

•

about any other information which may have been hyperlinked to/from the financial statements.

Dominika Ryan Director, Financial Audit Services

20 April 2018 SYDNEY

UW Asset Trust

Income Statement

For the Year Ended 31 December 2017 2017 Revenue and other income Writeback of liability Investment writedown Bank charges Corporate fees Patent costs Upside fees Monash University - Aquahydrex distribution

Note 3

Profit/(Loss) before income tax Income tax expense

$ 32,032 (120) (249) (26,941) -

2016 $ 25,746 1,500 (7,731) (181) (246) (49,109) (922,982)

4,722

(953,003) -

Profit/(Loss) from continuing operations

4,722

(953,003)

Profit/(Loss) for the year

4,722

(953,003)

The accompanying notes form part of these financial statements.

UW Asset Trust

Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 31 December 2017

2017

2016

$ 4,722

Profit/(loss) for the year Other comprehensive income

Total comprehensive income for the year

The accompanying notes form part of these financial statements.

(953,003) -

4,722

(953,003)

UW Asset Trust

Statement of Financial Position As At 31 December 2017 Note ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables

4 5

TOTAL CURRENT ASSETS NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES NON-CURRENT LIABILITIES

2016

695,592 1

580,322 110,549

695,593 -

690,871 -

695,593

690,871

NET ASSETS

EQUITY Retained earnings

2017

TOTAL EQUITY

The accompanying notes form part of these financial statements.

695,593

690,871

695,593

690,871

695,593

690,871

UW Asset Trust

Statement of Changes in Equity For the Year Ended 31 December 2017 2017

Balance at 1 January 2017

Retained Earnings

Total

Profit/(Loss) for the year

690,871 4,722

Balance at 31 December 2017

695,593

2016

Balance at 1 January 2016 Profit/(Loss) for the year Balance at 31 December 2016

Retained Earnings

Total

1,643,874 (953,003)

690,871

The accompanying notes form part of these financial statements.

UW Asset Trust

Statement of Cash Flows

For the Year Ended 31 December 2017

Note CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers Payments to suppliers and employees Other receipts Net cash provided by/(used in) operating activities

2017

2016

32,032

32,191

(27,310) 110,548

(1,803,242) -

115,270

(1,771,051)

CASH FLOWS FROM INVESTING ACTIVITIES: Net cash provided by/(used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of borrowings

(369)

Net cash used by financing activities Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of year Cash and cash equivalents at end of financial year

The accompanying notes form part of these financial statements.

115,270

(1,771,420)

580,322

2,351,742

695,592

580,322

UW Asset Trust

Notes to the Financial Statements For the Year Ended 31 December 2017

UW Asset Trust (UWAT) was created under the Trust Deed date 4 June 2007. UW Asset Trust Pty Ltd was appointed as Trustee and UniQuest Pty Ltd was appointed as Manager of the Trust. The financial report covers UW Asset Trust as an individual entity. The functional and presentation currency of UW Asset Trust is Australian dollars. The financial report was authorised for issue by the Trustee on 13 April 2018. 1

Basis of Preparation The financial statements are general purpose financial statements that have been prepared in accordance with the Australian Accounting Standards, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board. The financial statements are prepared on a non-going concern basis as the Trustee of the Trust intention is to close the Trust in 2018. The financial statements have been prepared on an accruals basis and are based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. Significant accounting policies adopted in the preparation of these financial statements are presented below and are consistent with prior reporting periods unless otherwise stated.

Summary of Significant Accounting Policies (a)

Revenue and other income Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economic benefits associated with the transaction will flow to the Trust and specific criteria relating to the type of revenue as noted below, has been satisfied. Revenue is measured at the fair value of the consideration received or receivable and is presented net of returns, discounts and rebates. All revenue is stated net of the amount of goods and services tax (GST). Other income Other income is recognised on an accruals basis when the Trust is entitled to it.

(b)

Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset. All other borrowing costs are recognised as an expense in the period in which they are incurred.

(c)

Goods and Services Tax (GST) Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). 7

UW Asset Trust

Notes to the Financial Statements For the Year Ended 31 December 2017

Summary of Significant Accounting Policies continued (c)

Goods and Services Tax (GST) continued Receivables and payable are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the statement of financial position. Cash flows in the statement of cash flows are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(d)

Investments and other financial assets Classification The Trust classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at each reporting date. (i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading. A financial asset is classified in this category if it is 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 the end of the reporting period 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 Trustâ&#x20AC;&#x2122;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 noncurrent assets unless management intends to dispose of the investment within 12 months of the end of the reporting period. Regular purchases and sales of financial assets are recognised on trade date - the date on which the Trust commits to purchase or sell the asset. Investments are initially recognised at fair value plus transactions costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Trust has transferred substantially all the risks and rewards of ownership. 8

UW Asset Trust

Notes to the Financial Statements For the Year Ended 31 December 2017

Summary of Significant Accounting Policies continued (d)

Investments and other financial assets continued Classification continued When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are included in the income statement as gains and losses from investment securities. Impairment The Trust assesses at each balance 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 or loss - is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.

(e)

Cash and cash equivalents Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

(f)

New Accounting Standards and Interpretations During the current year, the Trust adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory. The adoption of these Standards has not impacted the recognition, measurement and disclosure of certain transactions. The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The Trust has decided against early adoption of these Standards. The new and amended standards are unlikely to materially affect the Trust's financial statements.

Revenue and Other Income

2017

2016

Other Income Fees Royalties Reimbursement - Patent Costs Sundry income

32,032 -

5,000 1,169 19,208 369

Total Revenue and Other Income

32,032

25,746

UW Asset Trust

Notes to the Financial Statements For the Year Ended 31 December 2017

Cash and cash equivalents

2017

2016

Cash at bank and in hand

695,592

580,322

Total Cash and cash equivalents

695,592

580,322

Reconciliation of cash Cash and Cash equivalents reported in the statement of cash flows are reconciled to the equivalent items in the statement of financial position as follows: 2017 2016

Cash and cash equivalents

$ 695,592

$ 580,322

Balance as per statement of cash flows

695,592

580,322

Trade and other receivables

2017

2016

CURRENT GST receivable

110,549

Total current trade and other receivables

110,549

The carrying value of trade receivables is considered a reasonable approximation of fair value due to the short-term nature of the balances. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable in the financial statements. 6

Retained Earnings

2017

2016

Balance at 1 January Profit/(loss) for the year

$ 690,871 4,722

$ 1,643,874 (953,003)

Retained earnings at 31 December

695,593

690,871

UW Asset Trust

Notes to the Financial Statements For the Year Ended 31 December 2017

Financial Risk Management The Trust is exposed to a variety of financial risks through its use of financial instruments. The Trust does not speculate in financial assets. The most significant financial risks to which the Trust is exposed to are described below: Specific risks 

Liquidity risk



Credit risk



Market risk - currency risk, interest rate risk and price risk

Financial instruments used The principal categories of financial instrument used by the Trust are: 

Trade receivables



Cash at bank

Objectives, policies and processes Risk management is carried out by the Trust’s Manager. The Manager has primary responsibility for the development of relevant policies and procedures to mitigate the risk exposure of the Trust. Specific information regarding the mitigation of each financial risk to which the Trust is exposed is provided below. 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 Trust manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

UW Asset Trust

Notes to the Financial Statements For the Year Ended 31 December 2017

Financial Risk Management continued

Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Trust. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposure to wholesale and retail customers, including outstanding receivables and committed transactions. 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. Management considers that all the financial assets that are not impaired for each of the reporting dates under review are of good credit quality, including those that are past due. The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings. The following table details the Trust's trade and other receivables exposure to credit risk (prior to collateral and other credit enhancements) with ageing analysis and impairment provided for thereon. Amounts are considered as 'past due' when the debt has not been settled, within the terms and conditions agreed between the Trust and the customer or counter party to the transaction. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there is objective evidence indicating that the debt may not be fully repaid to the Trust. The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high credit quality. There are no balances within trade receivables that contain assets that are not impaired and are past due. It is expected that these balances will be received when due. Market risk (i) Foreign currency sensitivity Most of the Trust's transactions are carried out in Australian Dollars. Exposures to currency exchange rates arise from the Trust's overseas purchases. These purchases are minor and infrequent. To mitigate the Trust's exposure to foreign currency risk, non-Australian Dollar purchases are managed in accordance with the Trustâ&#x20AC;&#x2DC;s risk management policies.

UW Asset Trust

Notes to the Financial Statements For the Year Ended 31 December 2017

Financial Risk Management continued

(ii) Interest rate risk The Trust's policy is to minimise interest rate cash flow risk exposures on long-term financing. Longer-term borrowings are therefore usually at fixed rates. At the reporting date, the Trust is exposed to changes in market interest rates through its bank borrowings, which are subject to variable interest rates. The following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible change in interest rates of +-% and --% (2016: +-%/--%), with effect from the beginning of the year. These changes are considered to be reasonably possible based on observation of current market conditions and economist reports.

2017 +1.00% $ Cash and cash equivalents 8

6,956

2016 -1.00% $ (6,956)

+1.00% $ 5,803

-1.00% $ (5,803)

Remuneration of Auditors Remuneration of the audit fees incurred by the Audit Office of NSW are covered by the parent entitiy, the University of Wollongong

Fair Value Measurement Fair value hierarchy AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be assigned to a level in the fair value hierarchy as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 Unobservable inputs for the asset or liability. (a)

Fair value measurements The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. Due to the short-term nature of the current receivables, their carrying value approximates their fair value and based on credit history it is expected that the receivables that are neither past due nor impaired will be received when due.

Contingencies The Trust has no contingencies at 31 December 2017 (31 December 2016:None).

UW Asset Trust

Notes to the Financial Statements For the Year Ended 31 December 2017

Related Parties (a)

The Trust's main related parties are as follows: (i) Entities exercising control over the Trust: The ultimate parent entity, which exercises control over the Trust, is the University of Wollongong.

(b)

Transactions with related parties Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. No transactions occurred with related parties.

Reconciliation of profit/(loss) after income tax to net cash provided by / (used in) operating activities 2017 2016 $ Profit/(loss) for the year Change in operating assets and liabilities, net of effects from purchase of controlled entity: (Increase) / decrease in trade debtors (Increase) / decrease in other operating assets Increase / (decrease) in trade creditors Increase / (decrease) in other operating liabilities Net cash provided by / (used in) operating activities

4,722

$ (953,003)

110,548

(51,246)

7,731 (773,033)

(1,500)

115,270

(1,771,051)

Events Occurring After the Reporting Date It is the intention of the Trustee of the Trust to arrange the vesting, distribution of the Trust's accounts and the winding up of UWAT Pty LTD as the sole trustee for the Trust in 2018.

UW Asset Trust

Notes to the Financial Statements For the Year Ended 31 December 2017

Trust Details The registered office of the trust is: UW Asset Trust 'General Purpose South Building' Level 7, 1 Staff House Road, UNIVERSITY OF QUEENSLAND Brisbane Queensland 4072 The principal places of business is: 'General Purpose South Building' Level 7, 1 Staff House Road, UNIVERSITY OF QUEENSLAND Brisbane Queensland 4072

End of audited financial statements

CONTACT uow.edu.au facebook.com/UOW twitter.com/UOW #ThisIsUOW feedback.uow.edu.au

THE SWITCHBOARD Tel: +61 2 4221 3555 Fax: +61 2 4221 4322 Switchboard: 8.30am to 5.30pm Office Hours Monday to Friday

WRITTEN ENQUIRIES Chief Administrative Officer University of Wollongong NSW 2522 Australia

The University of Wollongong attempts to ensure the information contained in this publication is correct at the time of production (April 2018); 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