Consolidated Statement Of Profit Or Loss And Other

Notes to the Financial StatementsFor the year ended 30 June 2017NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)DepreciationLand is not depreciated. The depreciable amount of all property, plant and equipment is depreciated over theirestimated useful lives commencing from the time the asset is held available for use, consistent with the estimatedconsumption of the economic benefits embodied in the asset.Leasehold improvements are permanent fixtures at our leased sites.Class of fixed assetBuildingsLeasehold improvementsMotor vehiclesMotor vehicles under leaseEquipment, furniture and fittingsDepreciation ratesDepreciation basis3%10%-20%15%-20%33%10%-33%Straight lineStraight lineStraight line and diminishing valueStraight lineStraight line and diminishing value(f) Assets held for saleAssets are classified as held for sale if their carrying amount will be recovered principally through a sale transactionrather than through continuing use and a sale is considered highly probable. They are measured at the lower oftheir carrying amount and fair value less costs to sell.Assets are not depreciated or amortised while they are classified as held for sale.Assets classified as held for sale are presented separately from the other assets on the balance sheet.(g) LeasesLeases are classified at their inception as either operating or finance leases based on the economic substance ofthe agreement so as to reflect the risks and benefits incidental to ownership.Finance leasesLeases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset,but not the legal ownership, are transferred to the group are classified as finance leases. Finance leases arecapitalised, recording an asset and a liability equal to the fair value or, if lower, the present value of the minimumlease payments, including any guaranteed residual values. The interest expense is calculated using the interestrate implicit in the lease, if this is practicable to determine; if not, the group’s incremental borrowing rate is used.Interest expense on finance leases is included in finance costs in the statement of profit or loss. Leased assetsare depreciated on a straight-line basis over their estimated useful lives where it is likely that the group will obtainownership of the asset, or over the term of the lease. Lease payments are allocated between the reduction of thelease liability and the lease interest expense for the period in accordance with the effective interest method.Operating leasesLease payments for operating leases, where substantially all the risks and benefits remain with the lessor, arerecognised as an expense on a straight-line basis over the term of the lease.Lease incentives received under operating leases are recognised as a liability and amortised on a straightline basis over the life of the lease term.(h) Financial instrumentsClassificationThe group classifies its financial assets in the following categories: financial assets at fair value through profit orloss, loans and receivables, and available-for-sale financial assets. The classification depends on thenature of the item and the purpose for which the instruments are held.Initial recognition and measurementFinancial assets and financial liabilities are recognised when the entity becomes a party to the contractualprovisions of the instrument. For financial assets, this is equivalent to the date that the entity commits itself toeither the purchase or sale of the asset (i.e. trade date accounting is adopted).8Workways Australia Limited Annual Report ACN 141 659 734

Notes to the Financial StatementsFor the year ended 30 June 2017NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(h) Financial instruments (Continued)Financial instruments are initially measured at fair value adjusted for transaction costs, except where theinstrument is classified as fair value through profit or loss, in which case transaction costs are immediatelyrecognised as expenses in profit or loss.Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quotedin an active market. Loans and receivables are subsequently measured at amortised cost using the effectiveinterest rate method.Financial liabilitiesFinancial liabilities include trade payables, other creditors and loans from third parties including inter-entitybalances.Non-derivative financial liabilities are subsequently measured at amortised cost, comprising original debt lessprincipal payments and amortisation.Financial liabilities are classified as current liabilities unless the group has an unconditional right to defer settlementof the liability for at least twelve months after the reporting period.Impairment of financial assetsFinancial assets are tested for impairment at each financial year end to establish whether there is any objectiveevidence for impairment as a result of one or more events (‘loss events’) having occurred and which have animpact on the estimated future cash flows of the financial assets.(i) Impairment of non-financial assetsGoodwill, intangible assets not yet ready for use and intangible assets with indefinite useful lives are not subjectto amortisation and are therefore tested annually for impairment, or more frequently if events or changes incircumstances indicate that they might be impaired.For impairment assessment purposes, assets are generally grouped at the lowest levels for which there are largelyindependent cash flows (‘cash generating units’). Accordingly, most assets are tested for impairment at the cashgenerating unit level. Because it does not generate cash flows independently of other assets or groups of assets,goodwill is allocated to the cash generating unit or units that are expected to benefit from the synergies arisingfrom the business combination that gave rise to the goodwill.Assets other than goodwill, intangible assets not yet ready for use and intangible assets with finite useful lives areassessed for impairment whenever events or circumstances arise that indicate the asset may be impaired.An impairment loss is recognised when the carrying amount of an asset or cash generating unit exceeds theasset’s or cash generating unit’s recoverable amount. The recoverable amount of an asset or cash generating unitis defined as the higher of its fair value less costs to sell and value in use.Impairment losses in respect of individual assets are recognised immediately in profit or loss unless the asset iscarried at a revalued amount such as property, plant and equipment, in which case the impairment loss is treatedas a revaluation decrease in accordance with the applicable Standard. Impairment losses in respect of cashgenerating units are allocated first against the carrying amount of any goodwill attributed to the cash generatingunit with any remaining impairment loss allocated on a pro rata basis to the other assets comprising the relevantcash generating unit.The recoverable amount is assessed on the basis of the expected net cash flows which will be received from theassets employment and subsequent disposal. The expected net cash flows have been discounted to presentvalues in determining recoverable amounts.(j) Employee benefits(i) Short-term employee benefit obligationsLiabilities arising in respect of wages and salaries, annual leave and any other employee benefits (other thantermination benefits) expected to be settled wholly before twelve months after the end of the annual reportingWorkways Australia Limited Annual Report ACN 141 659 7349

Notes to the Financial StatementsFor the year ended 30 June 2017NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(j) Employee benefits (Continued)period are measured at the (undiscounted) amounts based on remuneration rates which are expected to bepaid when the liability is settled. The expected cost of short-term employee benefits in the form of compensatedabsences such as annual leave is recognised in the provision for employee benefits. All other short-term employeebenefit obligations are presented as payables in the consolidated statement of financial position.Contributions are made by the entity to an employee superannuation fund and are charged as expenses whenincurred.(ii) Long-term employee benefit obligationsThe provision for other long-term employee benefits, including obligations for long service leave and annualleave, which are not expected to be settled wholly before twelve months after the end of the reporting period, aremeasured at the present value of the estimated future cash outflow to be made in respect of the services providedby employees up to the reporting date. Expected future payments incorporate anticipated future wage andsalary levels, durations of service and employee turnover, and are discounted at rates determined by referenceto market yields at the end of the reporting period on high quality corporate bonds that have maturity dates thatapproximate the terms of the obligations. Any re-measurements for changes in assumptions of obligations forother long-term employee benefits are recognised in profit or loss in the periods in which the change occurs.(k) Goods and services tax (GST)Revenues, expenses and purchased assets are recognised net of the amount of GST, except where the amountof GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as partof the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in theconsolidated statement of financial position are shown inclusive of GST.(l) Income taxThe parent is a registered charity and classified as a public benevolent institution under section 30-45 of theIncome Tax Assessment Act 1997 (Cth) (ITAA97). It holds the following tax concessions: Endorsement as a deductible gift recipient; Endorsement as an income tax exempt charity; and Exemption from fringe benefits tax under section 57A(5) of the Fringe Benefits Tax Assessment Act 1986 (Cth).(m) ProvisionsProvisions are recognised when the group has a legal or constructive obligation, as a result of past events, forwhich it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.(n) IntangiblesGoodwillGoodwill represents the future economic benefits arising from other assets acquired in a business combinationthat are not individually identifiable or separately recognised.Goodwill is not amortised, but is tested for impairment annually, or more frequently if events or changes incircumstances indicate that it might be impaired, and is carried at cost less any accumulated impairment losses.Other intangiblesOther intangibles acquired in a business combination are initially recognised at fair value at the acquisitiondate. Such intangibles are amortised over their estimated useful lives and are carried at cost less accumulatedamortisation and any impairment losses.Other intangible assets other than those acquired in a business combination are initially recorded at cost. Otherintangible assets are amortised over their estimated useful lives. The balances are reviewed annually and amountsare written off to the extent the realisable future benefits are considered to be no longer probable.(o) Economic dependenceWorkways has a significant economic dependency on the Department of Employment and Department ofSocial Services as it currently has two major programs jobactive which is funded through to 2020 and Disability10 Workways Australia Limited Annual Report ACN 141 659 734

Notes to the Financial StatementsFor the year ended 30 June 2017Employment Services (DES) which, under the current funding arrangement, is funded through to30 June 2018. Workways will continue to deliver DES program services under the new grant agreement thatcommences from 1 July 2018 to 30 June 2023 across the majority of our existing DES sites.Workways continues to expand and diversify the number of programs including Commonwealth and StateGovernment funded programs such as ParentsNext, Gippsland East Mentoring and Jobs Victoria EmploymentNetwork.(p) ComparativesWhere necessary, comparative information has been reclassified and repositioned for consistency with currentyear disclosures.NOTE 2: SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTSThe directors evaluate estimates and judgements incorporated into the financial statements based on historicalknowledge and best available current information, Estimates assume a reasonable expectation of future eventsand are based on current trends and economic data, obtained both externally and within the group.Key Estimates and Judgements - Impairment (general)The land and buildings were independently valued at 30 June 2017 by Lee Property Valuers & Advisers. Thevaluation was based on a capitalisation of market net income. The land and buildings are categorised withinthe fair value hierarchy at Level 3, which relates to valuation techniques for which the lowest level input that issignificant to the fair value measurement is unobservable. The directors believe the carrying amount of the landand buildings materially reflects their current fair value at 30 June 2017.The directors have performed an assessment for impairment at year end of intangible assets with a finite usefullife and have determined in their judgement that there are not any facts and circumstances that have arisen thatindicate these intangible assets are impaired. Accordingly, the directors believe the carrying amount of intangibleassets does not exceed their recoverable amount at 30 June 2017.Workways Australia Limited Annual Report ACN 141 659 734 11

Notes to the Financial StatementsFor the year ended 30 June 2017Note2017 2016 NOTE 3: REVENUE AND OTHER INCOMEJSA RevenueYouth ServicesEnvite Inc.JobactiveDisability Employment ServicesWorkways Recruitment - labour hire revenueOther revenueInterest incomeGain on bargain purchase - business 3,793,449NOTE 4: OPERATING PROFITLoss has been determined after:Depreciation expense- buildings- leasehold improvements- motor vehicles- equipment, furniture and 6,66545,631276,659171,006549,961Amortisation expense- leased assets- Government contracts- Employee and client lists- Computer ployee benefits:- Staff remuneration and benefits- Superannuation- WorkCover and others12 Workways Australia Limited Annual Report ACN 141 659 734

Notes to the Financial StatementsFor the year ended 30 June 20172017 2016 NOTE 4: OPERATING PROFIT (CONT’D)Client Expenses- Client expensesOther Expenses- Advertising and marketing- Committee expenses- Consultancy fees- Office administration - including consumables- Insurance- Postage and delivery- Property costs- Telephone- Motor vehicle expenses- (Profit)/Loss on disposal of non-current assets- Job Futures and CoAct feesOther ,309,7242,891,878NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATIONCompensation received by key management personnel of the group- total compensationNOTE 6: CASH AND CASH EQUIVALENTSCash on handCash at bankNOTE 7: RECEIVABLESCURRENTTrade debtorsImpairment loss provisionOther receivablesAccrued revenueOther receivablesWorkways Australia Limited Annual Report ACN 141 659 734 13

Notes to the Financial StatementsFor the year ended 30 June 20172017 2016 NOTE 8: INVENTORIESCURRENTAt ,170)651,8104,304,039NOTE 9: OTHER ASSETSCURRENTPrepaymentsOther current assetsNOTE 10: PROPERTY, PLANT AND EQUIPMENTLandAt fair valueBuildingsAt fair valueAccumulated depreciationLeasehold ImprovementsAt costAccumulated depreciationPlant and EquipmentMotor vehicles at costAccumulated depreciationMotor vehicles under leaseAccumulated depreciationEquipment, Furniture and FittingsAccumulated depreciationTotal property, plant and equipment14 Workways Australia Limited Annual Report ACN 141 659 734

Notes to the Financial StatementsFor the year ended 30 June 2017NOTE 10: PROPERTY, PLANT AND EQUIPMENT (CONT’D)(a) ValuationsFreehold land and buildings are shown at their fair value based on periodic, but at least triennial, valuations byexternal independent valuers, less subsequent depreciation for buildings.In periods when the freehold land and buildings are not subject to an independent valuation, the directors conductdirectors’ valuations to ensure the carrying amount for the land and buildings is not materially different to fair value.The land and buildings were independently valued at 30 June 2017 by Lee Property Valuers & Advisers. Thevaluation was based on a capitalisation of market net income. The land and buildings are categorised withinthe fair value hierarchy at Level 3, which relates to valuation techniques for which the lowest level input that issignificant to the fair value measurement is unobservable. The directors believe the carrying amount of the landand buildings materially reflects their current fair value at 30 June 2017.(b) ReconciliationsReconciliation of the carrying amounts of property, plant and equipment at the beginning and end of the currentfinancial year.2017 2016 Freehold landOpening carrying amou

Workways Australia Limited is a not-for-profit entity for the purpose of preparing the financial statements. The financial report was approved by the directors as at the date of the directors’ report. The following are the significant accounting policies adopted by the group in