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REPORT

OUR

To be a leading provider of quality language services

At VITS we:

> are proud to deliver a proactive and quality service

> embrace and drive change

> create an enjoyable workplace and celebrate success

> are adventurous, creative, and open-minded

> support each other and pursue growth and learning

> build open and honest relationships with communication

> build a professional, positive team

> treat our clients, colleagues and contractors at all times fairly,and with respect and dignity.

> are passionate, committed and determined

> reward and recognise achievement

OUR

2 VITS Annual Report 2012-2013

VITS Annual Report 2012-2013 3

PAGE

KEY ACHIEVEMENTS 4

CHAIRMAN’S REPORT 5

CEO REPORT 6

BOARD OF DIRECTORS 8

VITS IN PROFILE 9

ORGANISATIONAL STRUCTURE 13

OPERATIONAL PERFORMANCE 14

INVESTING IN OUR INDUSTRY AND COMMUNITY 19

FINANCIAL STATEMENTS 20

CONTENTS

To provide Non-English speakers with high quality language services,delivered efficiently and cost-competitively by accredited professionals.

We value and support the profession, and contribute to itsdevelopment, by working with industry stakeholders, setting practicestandards and providing leadership for Victoria and Australia.

Our work supports access and equity for Non-English speakers, and the richness of Australia’s cultural diversity.

OUR


> Our total sales for the year increased 13.8%, led by a 54% increase in revenue from telephoneinterpreting sales.

> We report a net profit of $581,030 which represents a significant 69% improvement on the previous financialyear and our best result in 7 years.

> Total annual revenue of $10,261,101 is the highest ever achieved by the business.

> We achieved a record result for our translation services with over 4 million words translated this year.The first time we have achieved this figure which is 34%higher than the previous financial year.

> 94.5% of all translations were completed by NAATI Professional Level or above.

> The first full year operation of our new, state of the arttelephone interpreting system resulted in recordfigures for this service. We report a significant 38%increase on the number of interpreter connected callswhen compared with the previous financial year.

> 94% of all telephone interpreting calls were connected in under 3 minutes and just under 99% were connected in 5 minutes

> Demand for our on-site interpreting services increased for the fourth consecutive year. We achieved a 3.5% increase on last year.

> We registered an additional 106 new clients with VITS.

> We successfully retained significant translationcontracts with the Federal Department of Immigration and Citizenship.

> We recruited a full time Contractor ManagementCoordinator to oversee the recruitment andperformance management of our languageprofessional workforce. An additional 289language professionals joined VITS.

> We moved to our new modern, central CBD corporate offices in Bourke Street Melbourne.

> We launched our new branding and redeveloped all promotional and marketing materials.

> Our new website built to the latest technical insights went live in November 2012.

> A number of enhancements to the operational bookingsystem improved functionality and ease of use.

> Our commitment to the industry continued with sponsorships and support for key communitybased initiatives.

> All staff participated in the performance review process linked to professional development outcomesand organisational values that are the guidingprinciples for the company.

ACHIEVEMENTS


CHAIRMAN’S REPORT

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THE THREE YEAR STRATEGY OF RETURNING VITS TO A SOUND BUSINESSMODEL WHILE ENHANCING QUALITY ASSURANCE AND COMMUNITYSERVICE OBLIGATIONS IS EVIDENCED IN THIS 2012/13 REPORT.

In financial terms, the past twelve months have produced an outstandingresult. With total sales exceeding $ 10 million for the first time, and a netprofit improvement of 69% compared to the 2011/2012 result, the company is well positioned for the future.

However, outstanding financial results are not achieved in isolation from otherfactors. Key decisions made in previous years to invest in new technology,undertake an organisational restructure and make firm commitments toimproving the expertise and skills set of our staff are now being vindicated. TheVITS Board extends its appreciation to both the Minister for Multicultural Affairsand Citizenship, Hon Nicholas Kotsiras MP, and the Department of Treasury forensuring that the company had the backing to see this reform agenda through.

The past year also involved a challenging relocation for VITS staff to a newcorporate headquarters in Bourke Street. The Board took the opportunity ofhaving the Minister in attendance at our official opening, to also launch ourupdated branding, logo and new web site.

Testimony to the strength of multiculturalism in Victoria, and across Australia,is the fact that VITS engaged over 289 new language contractors in the pastyear. Many of these have been employed to meet the demand of languages thatwere not spoken in Australia twenty or even ten years ago.

VITS takes very seriously the need to service our CALD communities’ languagerequirements in a timely and professional manner. In this regard, the Boardwas delighted that our staff were able to exceed all service targets across thetranslations, telephone and on-site interpreting sectors. We believe that theretention of our contract with the Federal Department of Immigration andCitizenship ( DIAC ) was underpinned by our performance in these key servicedelivery areas.

In all of this, VITS has also maintained a strong commitment to enhancing theinterpreting and translating profession while supporting small recently arrivedcommunities. In this context, the company has continued to providescholarships for university level interpreting and translation studies, and hassponsored a number of conferences and professional developmentopportunities for language professionals. In the past year we have alsosupported the Ethnic Communities Council of Victoria, Victoria’s CulturalDiversity Week and the Australian Institute of Interpreters and Translators (AUSIT) conferences.

None of these achievements would have been possible without the unflinchingefforts and professionalism of our CEO, George Bisas and his hardworking staff.Many of our staff have been with VITS for a considerable number of years andhave shown loyalty to the organisation through many changes. Our contractedlanguage professionals also provide strong support to our company. My thanksare also extended to my fellow Board members who have shown a genuinecommitment to supporting the wider community.

I commend the VITS 2012/13 Annual Report to you.

Hon Phil Honeywood

CHAIRMAN, VITS


Three years ago VITS began aprocess of transition whichsought to revitalize thecompany. Since then a number

of key initiatives were introduced toimprove the efficiency and reliability of the services we provide.A new business model and pricingframework were introduced,substantial investment intechnological enhancements and anorganisational restructure wereimplemented. VITS also made acommitment to the professionaldevelopment of its workforce. In the last 12 months further significantchanges have occurred at VITS. After 17 years at our Spencer Streetoffices the company moved to new,corporate headquarters in BourkeStreet, Melbourne. We launched a newwebsite utilizing the latest availabletechnologies with the aim of meetingthe increasing demands of theaudience – our client base and ourcontractor workforce. A key part of revitalising the companywas the introduction of a new logo andbranding which allowed us tocompletely overhaul our marketingand communications resources. In thefinancial year just completed webegan to realize the results of theseimportant changes.I am pleased to report one of the best years of trading the company has ever achieved.At June 30, we report total revenue inexcess of $10 million for the first timein the history of the company. Year on

year we achieved a 13.8% increase inrevenue from sales of our services. Total net profit at the end of FY 12/13was $581,030. This is our best resultsince 2005/06 and a 69% improvementon last year’s result. This is a greatresult given the costs incurred withthe move to new offices.This excellent result has been drivenby a marked improvement in thedemand for telephone interpretingservices. We finished the year 54%above last year’s telephoneinterpreting revenue result and for thefirst time achieved more than $1million in revenue in this area.Sales for translations services werealso very pleasing. Total revenue fromtranslation was 23% higher than2011/12. A new pricing framework,increased targeted marketing and theintroduction of important qualitymanagement measures has proven tobe popular in the market.VITS was also pleased to have tenderedand retained the Department ofImmigration and Citizenship contractto undertake fee-free translatingservices for eligible citizens andpermanent residents of Australia. It isa service we have successfullydelivered for over 10 years. Finally onsite interpreting sales alsoimproved in the financial year. Weachieved a result that was 8.7% abovelast year’s outcome. Increaseddemand came from the health sector. Operationally we can report the highestdemand ever achieved for all of ourthree core services; translations,telephone and onsite interpreting.For the first time we have translatedmore than 4 million words in the onefinancial year. Our previous best figureof just over 3.8 million words wasachieved nearly a decade ago.Telephone interpreting has alsoachieved its best result ever. Weconnected 38% more calls this yearthan last year. More importantly theconnection times for this service haveremained very high with 94.3% of callsbeing connected to an interpreter in 3 minutes. The significant increase tothe demand for this service has not

I AM PLEASED TO PRESENT MY REPORTFOR THE 2012/13 FINANCIAL YEAR.

REPORT


impacted on the efficiency of theservice in any way. Finally on site interpreting has alsoachieved a new high. We achieved a3.5% increase when compared to theprevious financial year. We have seena 48% increase in demand for thisservice over the last three years. Servicing the increased demandeffectively was a key priority for the company. A significant investment was made inthe recruitment and management ofour contractor workforce. We createda new position in the company’smanagement structure, Coordinator,Contractor Management. This fulltime role has responsibility for therecruitment, training, developmentand performance management of ourlanguage professional workforce. We now promote a structuredapproach to this area which hasalready begun to provide positiveresults with significant improvementsto our processes and the recruitmentof 289 new language professionals,the most in any one year.Technology continues to underpinthe success of VITS. Our industry-leading booking system andautomated telephone interpretingsystem, including our exclusive pre-recorded multilingual lines, driveefficiencies in service delivery whilemaintaining repeatable quality andperformance standards.Again this year investment was madeto technology enhancements includingan upgrade to our video interpretingsystems and further enhancements toour booking system.The second phase of ourcomprehensive technology roadmapis also underway. Plans are in placefor further operationalimprovements in the next 12 monthswith the commissioning of a newfinancial management package andEnterprise Resource Planning (ERP)software, a major technologyinfrastructure upgrade and a raft ofenhancements to our operationalbooking system. Theseimprovements will enable us to meet

the changing demands of the diverseclient groups utilizing our services. We continued our support of keyindustry organisations and initiatives.VITS sponsored the Office ofMulticultural Affairs and CitizenshipInterpreter Scholarship Program, theAustralian Institute of Interpretersand Translators (AUSIT) annualconference in Sydney and theVictorian Ethnic Communities Councilannual conference. We alsomaintained our support of theVictorian Multicultural Commission’sCultural Diversity Week.I would like to take this opportunity tothank our Chairperson the Hon PhilHoneywood and the VITS Board ofDirectors for their advice and supportthroughout a challenging but verysuccessful year for VITS.We have experienced very little staffturnover during the last 12 monthswhich I believe is a reflection of thesupportive work culture we have hereat VITS. I want to thank theLeadership team at VITS that providesme with a great deal of assistance inmanaging the agency particularlyduring a year where we haveexperienced great change. My thanksalso to all VITS staff who havecontributed to the excellent resultsthat I am able to report.Finally, I wish to offer my appreciationto the language contractors, whodeliver VITS’ services within thecommunity. Their efforts ensureVictorians from culturally andlinguistically diverse backgrounds areable to access their basic humanrights; suitable and effective healthcare, meaningful involvement in theirchild’s education and just treatmentunder the law. Quality, effective language services isthe means by which Victorians fromculturally and linguistically diversebackgrounds are able to access thesecritical services.

George BisasCEO, VITS

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CHAIRPERSONHON PHIL HONEYWOODPhil Honeywood was elected to StateParliament in 1988 and retired frompolitics at the 2006 election. He servedas Minister for Tertiary Education andTraining and Minister Assisting thePremier on Multicultural Affairs from 1996to 1999. From the time Mr Honeywoodwas a Rotary Exchange student for 12months in Tokyo, Japan, he hasmaintained a strong interest andinvolvement in CALD community issuesand foreign languages. As ParliamentarySecretary for Multicultural Affairs from1992 to 1996 he was also instrumental inestablishing VITS. Phil has maintained hisinvolvement in CALD communitiesthrough his current volunteer membershipof the Bennelong Foundation. He is alsocurrently the National Executive Directorof the International Education Associationof Australia (IEAA), the peak industryassociation for international education.

DEPUTY CHAIRPERSONMR JOHN WILLIAMS PSMJohn retired from the Australian PublicService in December 2008 after 44 yearsof service in the Department ofImmigration and Citizenship. He heldsenior positions in the Department inCanberra, other parts of Australia andoverseas. John was awarded a PublicService Medal (PSM) in the Queen’sBirthday Honours list in 2008, for hisoutstanding contribution to thesuccessful settlement of established andemerging migrant communities inAustralia. Since retirement Johncontinues to be involved in working withmulticultural communities.

GEOFFREY GOUGH(B ED. GDSE. DIP T)

Geoff has extensive experience inEducation and Local Government being acouncillor at Manningham for 16 yearsand mayor for 4 terms. He is VicePresident of the Municipal Association ofVictoria and member of the AustralianLocal Government Association Board. As a special education professional heworked in areas of integration and social/emotional disorders running interventionunits and specialist services for schools inthe Eastern Metropolitan Region ofMelbourne. He currently runs his owneducation consultancy and professionaldevelopment business. He hasexperience on a range of communityboards and government advisorycommittees and boards.

MS KATRIN WILLSFM, BACHELOR OF BUSINESS(MANAGEMENT)

Katrin Aladjova-Wills is the co-founderand Director of All Australia Imports PtyLtd and StreetStar Cosmetics. Shecontinues in executive roles at thesecompanies and maintains businessactivities in Europe and Asia. She hasover 20 years experience in internationaltrade and the retail and fashion industries. Katrin is a former dual World Championof chess. She is also triple AustralianChampion. In 1986 she was awarded theInternational title of FIDE Master by theWorld Chess Federation, FIDE(Fédération Internationale des Échecs).Her passion for the game of chess isshown in her commitment as a formerHon President of Chess Victoria (CV) andcontinues support as an Ambassador toCV. Her achievements in chess are alsorecognised around the world. In Bulgariashe was awarded recognition as one ofthe top 100 most famous sportspeoplefrom Bulgaria in the last century.Katrin looks forward to providing theBoard her management and businessexpertise, underlined by her commitmentto Multicultural affairs.

MR ARTHUR APOSArthur is a partner of global law firmAshurst, practicing corporate andcommercial law. Arthur heads Ashurst’sMelbourne and Perth corporate teamsand is a member of Ashurst’s audit andrisk committee. He has acted as generalcounsel for a large mutilational, gainingfirst hand insights into the broad range ofissues which confront businesses. Arthurundertakes extensive pro bono legal workfor a range of non for profit organizations.

VOULA MESSIMERI AMVoula is Executive Director of AustralianGreek Welfare Society (AGWS),immediate past Chair and now HonPresident of the Federation of EthnicCommunities’ Councils of Australia(FECCA). She has served in leadershippositions on a number of communitymanagement bodies and on Boards suchas RMIT University Council and RMITTraining and is a current Board memberon the Rockwell Foundation. She hasbeen appointed on Ministerial State andFederal advisory structures acrossdiverse areas, including health, ageing,income support, and media and morerecently as a member on the AustralianMulticultural Advisory Council (AMAC)until 2011. Voula was inducted into theVictorian Honour Roll of Women andrecognised under the Order of Australiafor her contribution to refugees, migrantsand women.

BOARD OF

WHO ARE WE?VITS is a Victorian Government owned Government Business Enterprise, with over 30 years experience as a specialist language service provider. We have a long history ofproviding language services to culturally and linguistically diverse (CALD) Victorians,having evolved from the Victorian Ethnic Affairs Commission, established in 1978.

We compete in an open market with other commercial language service providers for bothclients and specialist language service practitioners.

As a government owned business enterprise we are managed by a government appointedBoard of Directors that oversees the governance structure.

Our key business principles:

> We will continue to be a profitable, self-funding organisation committed to responsible financial management and ethical business practice

> We will maintain and wherever possible enhance existing services and develop and market new products

> We will continue to grow our business by diversifying our client base and creating new markets for our whole suite of services

> We will continuously realign our organisation’s capabilities to meet new service demands and achieve new growth targets

> We will continue to be an employer of choice by providing fair remuneration and a safe working environment

Employing information technology as our key business driver is critical for VITS’ innovationstrategy. Our use of IT to date has resulted in a unique range of solutions, all designed to assistclients deliver premium services to CALD consumers in an effective and efficient manner.

However our greatest resource is our people.

A measure of our disciplined focus and our commitment to maintaining high standards in thedelivery of our services is that we recruit and provide Professional level NAATIaccredited interpreters and translators wherever a language is tested to this level– an increasingly important competitive edge in a growth industry.

An established database of over 2000 contract interpreters andtranslators across Australia (over 80% based in Victoria), coveringover 140 languages, ensures that VITS is able to meet the diverseneeds of its many clients.

Our current clients include Victorian Government departments and agencies, Federal Government departments and agencies,non-profit and community based organisations, as well as smallto large commercial entities.

IN PROFILE


VITS’ core business is interpretingand translating. However we have adiverse range of services that canassist our clients to communicateeffectively with culturally andlinguistically diverse Australians.

Our current services include:

ON-SITE INTERPRETINGReliable service which operates 24hours a day, 7 days a week includingpublic holidays.

PRE-RECORDED MULTILINGUALINFORMATION SERVICESVITS is the market leader in pre-recorded information serviceswhich allow our clients to have theirown pre-recorded information in over100 languages with direct access to an interpreter if required at any point of the call.

TELEPHONE INTERPRETINGSophisticated Interactive VoiceResponse technology providingtelephone interpreters in over 100 languages.

VIDEO INTERPRETINGA full premises based solution thatprovides high quality video/audiointerpreting services.

TRANSLATIONS - PROJECTCompetency in highly specialised and technical areas including Health,Mental Health, Legal/Justice,Government, Education, Communityand Not-For-Profit.

TRANSLATIONS – PERSONAL DOCUMENTSWe provide a comprehensive service inthe translation of personal documents.

DESKTOP PUBLISHINGProvision of design services in over 100 languages for print or web.

FOCUS TESTINGFacilitator of community focus testingof content pre and post translation.

CROSS CULTURAL TRAININGAND CONSULTANCYDelivery of training specific to clientrequirements and consultancy services.

TRANSCRIPTIONSExpert translation of multilingual audioand video material.

BOARD MEETINGS COMMITTEES

Board Member Eligible Attended Eligible to attend to Attend Attended

Phil Honeywood 11 10 1 1

John Williams 11 11 4 4

Arthur Apos 11 11 4 3

Geoff Gough 11 9 1 1

Katrin Wills 11 11 4 4

Voula Messimeris 11 11 1 1

OUR BUSINESS


GOODGOVERNANCEVITS is currently governed by a 6-member Board of Directors,appointed by the State Government,which reports to the Minister forMulticultural Affairs and Citizenshipas well as the Treasurer.

Two Committees support the Board:

(a) Risk Management and AuditCommittee, comprising threemembers of the Board, meetsregularly to ensure the financialintegrity and probity of allstrategic directions and keybusiness decisions, and

(b) Human Resources andRemuneration Committee meetsregularly to consider a range ofhuman resources and staff relatedissues. The committee alsoundertakes an annual review ofthe Chief Executive Officer'sperformance and makerecommendations to the Boardon appropriate remuneration.


A NEW ERABEGINS ONBOURKE STREETIn August 2012 VITS moved itsheadquarters to new offices inBourke Street Melbourne, on thecorner of King Street.

The company had spent over 17 years at its Spencer Street addressand the building and location no longersuited the needs of a growing andexpanding company.

The new building provides VITS with anenhanced corporate image whilstlocating us closer to the legal sectorand international colleges catering foroverseas students who are large usersof our retail services. It was launchedby the Honourable Nicholas Kotsiras,Minister for Multicultural Affairs andCitizenship, in November 2012.

Our move to the new building enabledus to launch a new branding, our first inover a decade, and develop anddisseminate a range of newpromotional and marketing materials.

A final but important step in thecreation of the new VITS brand was thedevelopment of a new corporatewebsite. The new website was builtaccording to latest technical insights,such as manageability, search engineoptimization and availabilityrequirements that include mobilephones and IPads. The infrastructurealso includes email marketingintegration and is hosted externally andguarantees high availability of services.

The website format was aligned withVITS’ new corporate branding and itmaximises the availability of informationon the company’s profile, resources,tools and the latest company news.

Other key features include arecruitment component for prospectivelanguage service professionals wantingto join VITS and streamlined contactoptions for interpreting requests,translation quotes and retail customers.We have seen a significant increase intraffic to the website since its launch.

At VITS we aim to provide the highestpossible quality of language servicesto our clients each and every time.Everyone has an individualresponsibility for ensuring the quality and reliability of our services,so that our clients can haveconfidence in our services.

To achieve this, VITS is committed to:

> An effective Quality ManagementSystem which meets therequirements of establishedinternational standards and iscommunicated, understood andused throughout our organisation

> Continual improvement of allaspects of our system, includingcontinual skills development andquality methods and practice

> Fully documenting our standardsand work practices

> Ensuring suitably qualified, skilledand experienced people

> Identifying, reporting and resolvingall service failures or issues andtaking action to prevent themrecurring, and

> Regular reviews of our system andidentifying issues of strategicimportance for the ongoingconsideration of the Board ofDirectors and management.

In the 2012/13 we continued toimplement a range of initiatives toenhance our reliability and the VITSQuality System. We:

1. Completed a booking processreview for a major client that led to a range of broader systemsenhancements

2. Created a test and developmentenvironment for our telephoneinterpreting services

3. Implemented a quality assuranceprocess for dedicated translationprocesses

4. Created a dedicated client feedbackresource within Operations

5. Enhanced our contractor workforce performancemanagement life cycle process

6. Created and developed our brandedcontractor training framework, VITSKIT (Knowledge Base for Interpreters& Translators)

7. Maintained a Risk StrategyFramework and Register

8. Further integrated our after hourssupport processes

9. Undertook external auditing byVictorian Auditor General’s Office.

VITS SERVICE QUALITY & RELIABILITY

The Hon Nicholas Kotsiras MP, Minister for Multicultural Affairs and Citizenship, opensVITS’ new corporate headquarters accompanied by the VITS Chairman Hon Phil Honeywoodand the two longest serving staff members, Penny Hawke and Sophia Koutes.


CUSTOMERFEEDBACKOver the past three years VITS, as partof its renewed focus on quality servicedelivery, has actively encouraged andresponded to feedback from users andother key stakeholders. This wasidentified as a priority in the last 12months and led to the introduction of anew role in our customer service team,that of Interpreting Feedback andSupport Officer.

Feedback, good and bad, is a keysource of information that helps fuel ourcontinuous improvement process. Wewelcome and encourage feedback atany time that a client feels they havesomething they want to say about anyaspect of our service.

As part of our quality managementplan, VITS maintains a complaintsregister and corrective action log. Ourcomplaints procedure has beendeveloped using AS ISO 10002-2006Customer satisfaction – Guidelines forcomplaint handling in organisations.

We record complaints received,investigate in line with ourdocumented complaints handlingprocedure, report the results back tothe client in a timely manner, and enterthe results into the corrective actionlog, which feeds back into ourcontinuous improvement process.

During the last financial year werecorded 112 complaints fromcustomers relating to a number ofaspects of our business. Thisrepresents a significant improvementon the previous financial year.

Complaints related to the attendanceand performance of interpreters, theresponsiveness of our internal staffand the quality of our telephoneinterpreting services.

Our Client Complaint Policy aims toencourage clients to raise concernswith us. A copy of the policy is availableto the general public.

FINANCIALMANAGEMENTWe report as required under the StateOwned Enterprises Act and provideongoing reports to the CommercialAdvisory Services Group withinTreasury. Our annual accounts areaudited by the Auditor General toensure that they comply with therelevant accounting standards requiredby the professional accounting bodies,as well as the Victorian Government.

As well as submitting annual corporateand business planning documents,VITS also reports regularly throughoutthe year to both the Minister forMulticultural Affairs and Citizenship andthe Treasurer on progress towardsmeeting the financial and productivitytargets set in the agreed plans.


CEO

VITS Board of Directors

Client ServicesManager

Operations Manager

IT/Systems Manager

Finance Officer

PA/Reception

InterpretingCoordinator

ContractManagementCoordinator

TranslationsCoordinator

IT Officer AR/AP Clerk

Casual CSOX7

Permanent CSOX2

CSO FeedbackX1

Permanent CSO X2

ORGANISATIONAL

ContractManagement

Officer

It has been a very successful year for VITS. In 2012/13 demand for thethree key services delivered by VITSwere at historic highs.

It comes at the end of a three yeartransition period where the company’sorganisational structure, technologyand business model have all beenreviewed to create a more responsive,quality managed service.

The number of telephone interpretingconnections, onsite interpretingassignments and words translatedwere the highest the company has ever reported.

RESULTS AT A GLANCETelephone Interpreting> 94% of all telephone interpreting

calls connected in under 3 minutesand just under 99% connected in 5 minutes

> Total telephone interpreter calls were 38% higher than the previous financial year

> Total calls in FY 12/13 were the highest ever recorded by the company.

Two years ago VITS implemented anew telephony infrastructure that hasgreatly enhanced the efficiency of ourtelephone interpreting services. As aresult VITS responded effectively to asignificant increase in demand for thisservice during this financial year.

During the second half of 2012 thenational telephone interpreter serviceexperienced a lengthy disruption to itsservices. VITS was able to support andservice many of its clients in Victoriaand across Australia with theirtelephone interpreting needs. Thissudden increase in demand was easily

managed by our new, state of the arttelephony infrastructure.

Top ten languages requested fortelephone interpreting as a total of alljobs were: Mandarin (19% of the totaltelephone interpreter services),Vietnamese (16%), Arabic (12%),Cantonese (9%), Greek (8%), Italian(4%), Persian (3%), Russian (3%),Turkish (3%) and Korean (2%).

Translations> The total words translated in

2012/13 were 4,061,280, anincrease of 34% on last year

> 94.5% of all translations wereundertaken by NAATI level 3 or above.

VITS experienced a significant increasein the demand for our translationservices. The introduction of a morecompetitive pricing framework andquality management systems hasresulted in a record level of demand for this service.

We also experienced a 20% increase in translations funded under theDepartment of Immigration andCitizenship Fee Free service.

Top ten languages requested fortranslations as a total of all jobs were:Persian (16% of the total translationrequests), Chinese (14%), Arabic(12%), Dari (8%), Vietnamese (6%),Russian (4%), Spanish (3%), Malay(3%) and Italian (2%).

On-Site Interpreting> 3.5% increase in demand for

this service producing our bestresult ever

> Just under 94% of all requestsreceived were successfully servicedacross all languages

> Over 64% of all interpreting requestswere self-allocated by contractorsusing our PUSH notification system,a 2% improvement on last year

> 47% of all new interpretingrequests were lodged by clientsusing our Online Client Portalcompared to 40% last yearrepresenting a significant resourcesaving for the company.

We have seen significant increaseddemand for on-site interpreting in anumber of languages, many of themfrom new and emerging communities.The two languages with the mostsignificant increase in demand arePersian, now the fourth highestlanguage demanded and Hazaragi atnumber nine.

Other languages to experienceincreased demand were Greek,Burmese, Tamil, Chin Hakka, Hakka,Macedonian, Somali, Oromo, Chaldean,Kurdish, Sudanese and Swahili.

Top ten languages requested for on-site interpreting as a total of all jobswere: Vietnamese (12% of total onsiteservices), Mandarin (9%), Arabic (7%),Persian (6%), Dari (6%), Greek (5%),Turkish (5%), Italian (4%), Hazaragi (4%)and Cantonese (3%).


OPERATIONAL

KEY PERFORMANCE INDICATORS

For the third consecutive year weexperienced significant growth insales across all three service deliveryareas. We achieved year on year a13.8% increase in revenue from sales.At June 30 we are very pleased toreport total revenue in excess of $10 million for the first time in thehistory of the company.

This result has been led by sales oftelephone interpreting services whichimproved markedly. We finished the year54% above last year’s revenue resultand achieved more than $1 million inrevenue in this area for the first time.

Translations revenue was also verypleasing. Total revenue from translationwas 23% higher than 2011/12.Important initiatives introduced this yearincluding a new approach to pricing,targeted marketing and enhancedquality management measures werewell received by our clients.

VITS had a number of successfultendering successes including retentionof the Department of Immigration andCitizenship translation contract. Wehave delivered this free service to newAustralian residents for over ten years.

We were also pleased to win thetender to provide translation servicesof personal documents to assistidentity assessments of irregularmaritime arrivals.

Finally onsite interpreting sales were8.7% above last year’s outcome.Increased demand came from thehealth sector.

Servicing the increased demand at thecompany was a key business priority inthis financial year. VITS recruited a fulltime position to manage the recruitmentand performance of our languageprofessional workforce. Activerecruitment and a more structuredperformance management of ourworkforce enabled us to meet higherservice targets.

Profitability was very strong for thisfinancial year. Total net profit at the endof FY 12/13 was $581,030. This is ourbest result since 2005/06 and a 69%improvement on last year.

Managing costs associated withservicing an increased demand as wellas the move to and fit out of new CBDheadquarters was challenging. Totalexpenses incurred in this financial yearwere only 6.2% higher than theprevious financial year which we believereflects sound fiscal managementwithin the company.

In 2012/13 we registered 106 newclients. These clients were a mix ofState & Federal Governmentdepartments as well as not-for-profitand commercial/private clients. StateGovernment agencies represented 31% of new clients and the commercialsector 27%.

Our key business activities included:

> Retention of a major CommonwealthGovernment translation contract

> Extension of Federal Governmenttranslation contract for irregularmaritime arrivals

> A focus on promoting our exclusive Multilingual Telephone Pre Recorded Lines

> Targeted promotions with key national industries

> Extensive preparation for large Victorian Government tender processes

> Strengthened relationships with all major clients.

We launched a new logo and brandingin late 2012. All promotional materialsand our website were updated toreflect the new corporate look for the company.

A particular focus for this year was thepromotion of our services to keymarkets across Australia. Regular usersof translation and telephoneinterpreting services were targeted forpromotion throughout the year.


BUSINESS GROWTH

TRAININGVITS provided training sessionsacross three core service areas.These included Local Government,Legal and Health/Mental Health.

Training requests were for our two toptraining programs with increasedinterest in our latest training course‘Effective Use of Bi-lingual Skills’.

This training is designed to assistlanguage aides in defining their bilingualrole within their organisation with aclear differentiation between the role ofan interpreter and language aide. Theprogram aims to assist language aidesin assessing their own level of effectivebilingualism and create awareness ofthe appropriate parameters withinwhich language aides are engaged.

The two main types of trainingprograms delivered were:

An Introduction to Working with Interpreters This training assists participants towork more effectively with interpretersby employing appropriate skills andtechniques when dealing with peoplefrom linguistically diverse backgrounds.

An Introduction to Cross Cultural CommunicationThe training assists participants to workmore effectively within a cross culturalcommunication setting by employingappropriate knowledge and variouscommunication strategies for engagingwith people or clients from culturallyand linguistically diverse backgrounds.

In 2012-13, the strategic decision wasmade to develop an in-house fullyqualified trainer with Cert IV in Trainingand Assessment in order to meetgovernment training guidelines andcomplement externally qualified Cert IV Trainers.

Sessions were provided predominantlyunder Service Agreements and tailoredacross each service area to ensurethat clients learning objectives weremet and knowledge of interpreterservices enhanced.

Extensive training was also conductedfor clients to enhance theirunderstanding of the VITS’ operationalsystems and processes.


BUSINESS GROWTH

STAFFAs VITS continued to experienceincreased demand for all of itservices in the 2012/13 financial year,the company needed to ensure, that ithad sufficient contracted languageprofessionals and internal staffresources to respond effectively.

The most important change to thecompany’s management structure thisyear was the creation and recruitmentto, the position of ContractorManagement Coordinator. This newrole has responsibility for therecruitment, induction, performancemanagement and development of ourlarge contractor workforce.

Another important new role introducedthis year was that of InterpretingFeedback & Support Officer. This rolemanages incoming feedback from bothclients and contractors via thededicated feedback channels. Theyaim to resolve any feedback issuesrelated to service delivery within settimelines and, where required, escalateto the relevant manager. This newposition plays an important part inidentifying issues related to ourcontractors and/or clients which feeddirectly into our continuousimprovement processes.

Our staffing remained very stableduring this financial year with minimalturnover reflecting, we believe, apositive and supportive workenvironment at VITS.

We maintained regular performancedevelopment meetings with staff aswell as structured one-on-onemeetings between supervisors andemployees. VITS continues torecognise the importance of staffdevelopment and training to enable usto continue to keep pace with thechanges and growth of the languageservices industry.

CONTRACTORSContractor Recruitment and ManagementServicing the increasing demandacross all service areas required VITSto actively recruit, manage and assistwith the development of our languageprofessional workforce.

A Contractor Management Coordinatorwas recruited which enabled us toimplement a holistic approach to themanagement of our interpreter andtranslator workforce. Our team ofindependent contractors are an integralpart of this business and the companyremains committed to providing thenecessary support and remainingresponsive to the needs of our largecontractor base.

New initiatives were introduced tosupport and enhance the contractorrecruitment process. A large number ofapplications were processed, aninternal recruitment tracker was createdand a “Refer a Colleague” program waspromoted on our website.

We continued to target recruitment andwill increasingly link it to unmetdemand. Strong relationships have alsobeen formed with key industry andcommunity stakeholder to assist withidentifying new contractors.

We continued to ensure that ourcontractors were provided with theinformation and training required tocarry out their roles effectively.

We saw the creation and developmentof our branded contractor trainingframework, VITS KIT (Knowledge Basefor Interpreters & Translators). Theframework covers topics such asVITS' clients, processes andtechnology. Contractors are regularlyinformed by VITS about its policies,technology and processes.

VITS contractors continued to haveaccess to debriefing and professionalsupport services provided by anexternal agency.

The annual contractor survey wasdistributed to all independentcontractors. We use the informationfrom this survey to better understandand respond to the needs of ourcontractor workforce and ultimatelyimprove the nature of our products, ourcustomer service and processes on anongoing basis.

VITS remains committed to ensuringfair and equitable conditions andidentifying professional developmentopportunities for our independentcontractors. We believe these are

critical components to attracting andretaining appropriate contractors tothe profession.

In 2012/13 we recruited a total of 289new contractors where 203 undertakeinterpreting, 17 are translators and 69are accredited in both disciplines. Theyworked in 77 languages. Thiscompares to 272 in the previousfinancial year. Of the new recruits,many were rare and emerginglanguage practitioners.

The following languages were targetedfor recruitment:

Akan, Albanian, Amharic, Arabic,Armenian, Assyrian, Azerbaijani,Bengali, Bosnian, Burmese, Cantonese,Chaldean, Chin (Falam), Chin (Hakha),Chin (Mindat), Chin (Mizo), Chin (Tedim),Chin (Zomi), Chinese, Croatian, Czech,Danish, Dari, Dinka, Estonian, Fanti,Filipino, French, Fujian, German, Greek,Gujarati, Hazaragi, Hindi, Hokkien,Hungarian, Indonesian, Italian,Japanese, Karen, Karen (S’gaw),Karenni, Kayah, Kinyarwanda, Kirundi,Kiswahili, Korean, Kurdish,Macedonian, Mandarin, Nepali,Norwegian, Nuer, Oromo, Pashto,Persian, Polish, Punjabi, Russian,Serbian, Shanghainese, Sinhalese,Slovak, Somali, Spanish, Sudanese,Swahili, Swedish, Tamil, Thai, Tigre,Tigrigna, Turkish, Turkmen, Twi, Urduand Vietnamese.

We recruit contractors through arange of channels which include (butare not limited to):

> Partnership arrangements withvocational and tertiary institutions

> Referrals and leads

> Contact with industry associationsincluding NAATI and AUSIT

> Community engagement

> Media advertising

The recruitment of languageprofessionals from older, establishedlanguages continues to be a challengefor VITS.


WORKFORCE MANAGEMENT

Today VITS operates within a highlysophisticated, transactionalenvironment that allows for continualinformation exchange via a range of technologies.

It is important to note that a significantamount of business logic has beeninvested in these automated systems.Years of industry and businessexperience have helped create whatwe believe to be one of the mostsophisticated systems in the marketwith our clients and contractors beingthe beneficiaries of such a superiorsystem. Our mindset for innovationhelps our clients develop better waysto reach culturally and linguisticallydiverse communities.

Our industry leading booking systemand automated telephone interpretingsystem, including our exclusive pre-recorded multilingual lines, driveefficiencies in service delivery whilemaintaining repeatable quality andperformance standards. They are clearevidence of VITS’ innovation in theindustry.

But we cannot be complacent. Ourtransactional architecture is in continualdevelopment, striving for greaterefficiency for both VITS and our clients.

This was true again in the financial year2012/13.

Some key innovations andenhancements to our technologyinfrastructure in the last 12 monthsincluded:

The move to our new Bourke Streetoffices enabled improved facilities andenvironment for the network andtelephony servers as well as enhancedsecurity via a secure dedicated location.

A number of enhancements to theBooking system improved functionalityand ease of use:

> for operations staff to assist with day to day roles

> additional features now available to clients via the client portal

> increase in use of the portal by clients.

> increased allocation of bookings by push and via contractor portal

> improved management and client reporting

> change to reports, etc to include new VITS branding

A great deal of research and planningwas undertaken to finalise threesignificant upgrades which will be fullyimplemented in the next financial year.Each of these was a key component ofStage 2 of the Technology Roadmapdeveloped by VITS in 2011/12.

We have selected new ERP and HRMsystems to replace our existing Financeand Payroll systems. This will providesignificant improvement in managementinformation across the company.

An upgrade to the Network serverenvironment is underway and due forcompletion in 2013-14.

The creation of a developmentenvironment for our TelephoneInterpreting and Multilingual InformationLines systems which will provide aplatform for future system upgradesseparated from the production servers.

UPGRADE TO OUR VIDEOINTERPRETING SERVICEWe made a decision in 2012/13 tochange the way in which we delivervideo interpreting.

VITS was utilising website based videointerpreting but due to a demand forhigher quality audio/video interpreting,we shifted to a premises basedsolution that was standard devicebased video interpreting. This approachprovides higher quality video/audio andis able to communicate with standardand mobile devices.

VITS works with a specialist technicalpartner who is expert in videoconferencing and has now successfullyinstalled and started servicing ourclients with high quality video/audiointerpreting services.

Benefits gained from this enhancement include:

> Clients with standard video device can utilise video interpreting seamlessly

> Clients with mobile device can also use our services as well (license required)

> Increased quality in audio/video hasresulted in better customer service

> Travelling cost reduced for servicingrural clients

> Higher encrypted video/audioprovides enhanced security for our clients

> Easy to use and more accessible.

TECHNOLOGY IN BUSINESS



IN OUR INDUSTRY & THE COMMUNITY

In 2012/13 VITS remained committedto a strong and robust languageservices industry and the broadercommunity promoting the value ofour diverse population.

We maintained very close relationshipswith the key educational institutionsthat support our industry. Our CEOcontinued his membership of the RMITProgram Advisory Committee thatprovides advice and guidance on thedevelopment of Language Servicesprograms at RMIT.

VITS sponsored the Office ofMulticultural Affairs and CitizenshipInterpreter Scholarship Program. Thescholarships are offered to studentsenrolled in the Diploma of Interpretingat RMIT University and usually withincommunities where there is a shortageof interpreters. The languages aredetermined following consultation witha range of community stakeholdersincluding VITS.

VITS staff continued to presentregularly at both Monash and RMITuniversities, increasing awarenessamong interpreting and translationstudents of important issues withinthe industry as well as futureemployment opportunities.

VITS continued to support a number ofkey peak industry bodies bysponsoring the Australian Institute ofInterpreters and Translators (AUSIT)annual conference in Sydney and theVictorian Ethnic Communities Councilannual conference.

We remained an active member of theOffice of Multicultural Affairs andCitizenship language services industryadvisory committee.

Once again, VITS was proud to be akey supporter of the VictorianMulticultural Commission’s CulturalDiversity Week and continued itsmembership of the NationalAccreditation Authority for Translatorsand Interpreters (NAATI) RegionalAdvisory Committee. We participatedin the consultations undertaken as apart of a review of the NAATIaccreditation system.

We continued our sponsorship of theInternational Student Welcome Desk atMelbourne airport. An importantinitiative of the City of Melbourne, theprogram distributes importantsettlement information to arrivinginternational students.

Our CEO continued his participation inthe Victorian Skilled Migration Programwhich assesses and evaluates state-sponsorship applications for residence.


AUDITED FINANCIALSTATEMENT

VITS FINANCIAL STATEMENT 2012/2013FOR THE YEAR ENDED 30 JUNE 2013

PAGE

Comprehensive Operating Statement for the year ended 30 June 2013 21

Balance sheet as at 30 June 2013 22

Statement of changes in equity for the year ended 30 June 2013 23

Cash flow statement for the year ended 30 June 2013 23

Notes to the financial statement for the year ended 30 June 2013 24

Note 1 Summary of significant accounting policies

Note 2 Sale of services

Note 3 Employee expenses

Note 4 Other operating expenses

Note 5 Receivables

Note 6 Plant, equipment & intangible assets

Note 7 Payables

Note 8 Borrowings

Note 9 Provisions

Note 10 Superannuation

Note 11 Notes to the statement of cash flows

Note 12 Responsible Persons

Note 13 Commitments for expenditure

Note 14 Remuneration of auditors

Note 15 Contingent assets & contingent liabilities

Note 16 Financial instruments

Statement by Directors and Management 32


VITS COMPREHENSIVE OPERATING STATEMENTFOR THE YEAR ENDED 30 JUNE 2013

Note(s) 2013 2012$ $

INCOME FROM TRANSACTIONS

Sale of services 2 10,261,101 9,006,292

Interest 21,009 22,621

Total income from transactions 10,282,109 9,028,914

EXPENSES FROM TRANSACTIONS

Cost of services 7,495,038 6,614,083

Employee expenses 3 1,249,964 1,167,815

Supplies and services 795,872 768,759

Depreciation and amortisation 6 119,127 95,014

Interest expense 11,329 12,570

Other operating expenses 4 29,849 26,095

Total Expenses from transactions 9,701,179 8,684,336

Net result from transaction (net operating balance) 580,930 344,578

OTHER ECONOMIC FLOWS INCLUDED IN NET RESULT

Net gain/(loss) on non-financial asset 100 140

Total other economic flows included in net result 100 140

Net result 581,030 344,718

COMPREHENSIVE RESULT 581,030 344,718

The comprehensive operating statement should be read in conjunction with the accompanying notes.


VITS BALANCE SHEETAS AT 30 JUNE 2013

Note(s) 2013 2012$ $

ASSETS

Financial Assets

Cash 1,127,698 543,656

Receivables 5 1,590,321 1,671,245

Total financial assets 2,718,019 2,214,901

NON-FINANCIAL ASSETS

Prepayments 26,266 40,043

Plant, equipment & intangible assets 6 783,647 751,126

Total non-financial assets 809,913 791,169

Total assets 3,527,932 3,006,070

LIABILITIES

Payables 7 745,647 586,113

Unearned Income 15,567 51,870

Provisions 9 232,010 166,873

Borrowings 8 231,824 307,361

Total liabilities 1,225,048 1,112,216

Net Assets 2,302,884 1,893,854

EQUITY

Contributed capital 400,000 400,000

Accumulated surplus 1,902,884 1,493,854

Net worth 2,302,884 1,893,854

The balance sheet should be read in conjunction with the accompanying notes.


VITS STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 JUNE 2013

Accumulated Surplus Contributions by Owner Total

Balance at 1 July 2011 1,228,506 400,000 1,628,506

Net result for the year 344,578 - 344,578

Other comprehensive income for the year 140 - 140

Dividend paid (79,370) - (79,370)

Balance at 30 June 2012 1,493,854 400,000 1,893,854

Net result for the year 580,930 - 580,930

Other comprehensive income for the year 100 - 100

Dividend paid (172,000) - (172,000)

Balance at 30 June 2013 1,902,884 400,000 2,302,884

VITS CASH FLOW STATEMENTFOR THE YEAR ENDED 30 JUNE 2013

Note(s) 2013 2012$ $

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 10,305,830 8,597,147

Payments to suppliers & employees (8,559,007) (7,761,640)

GST paid to the ATO (773,275) (650,988)

Interest received 21,009 22,621

Interest paid (11,329) (12,570)

Net cash inflow from operating activities 11 983,228 194,570

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for Infrastructure (2,856) (93,933)

Payments for Telecommunication/IVR System (18,341) (293,796)

Payments for Booking System (78,222) (45,136)

Payments for Office equipment and Furniture (52,230) (4,527)

Net cash used in investing activities (151,649) (437,391)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from/(repayment of) TCV Loan (75,537) 217,361

Dividend paid (172,000) (79,370)

Net cash used in financing activities (247,537) 137,991

NET INCREASE/(DECREASE) IN CASH HELD 584,042 (104,830)

Cash at the beginning of financial year 543,656 648,486

Cash at the end of financial year 1,127,698 543,656

The cash flow statement should be read in conjunction with the accompanying notes.

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


NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Statement of complianceThese financial statements have been prepared in accordancewith the Financial Management Act 1994 and applicableAustralian Accounting Standards (AASs) which includesAustralian Accounting Standards issued by the AustralianAccounting Standards Board (AASB), interpretations and othermandatory professional requirements.

b) Basis of Accounting preparation and measurementThe accrual basis of accounting has been applied in thepreparation of these financial statements whereby assets,liabilities, equity, income and expenses are recognised in thereporting period to which they relate, regardless of when cashis received or paid.

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

The report has been prepared on a historical cost basis.Historical cost is the fair value of the consideration given inexchange for assets.

Accounting policies are selected and applied in a mannerwhich ensures that the resulting financial information satisfiesthe concepts of relevance and reliability, thereby ensuring thatthe substance of the underlying transactions or other events isreported.

The accounting policies set out have been applied in preparingthe financial statements for the year ended 30 June 2013 andthe comparative information presented for the year ended 30June 2012.

c) Reporting entityThe financial statements cover VITS as an individual reportingentity. Its principle address is:

Victorian Interpreting and Translating ServiceLevel 7, 620 Bourke Street Melbourne VIC 3000

d) Scope and presentation of financial statements

Comprehensive operating statementIncome and expenses in the comprehensive operatingstatement are classified according to whether or not they arisefrom “transactions” or “other economic flows”. Thisclassification is consistent with the whole of governmentreporting format and is allowed under AASB 101 Presentationof financial statements.

‘Transactions’ are those economic flows that are considered toarise as a result of policy decisions, usually transactionsbetween two entities by mutual agreement.

‘Other economic flows’ are changes arising from market re-measurements. They include gain or loss from disposal of noncurrent physical and intangible assets.

Balance sheetAssets and liabilities are presented in liquidity order with assetsaggregated into financial assets and non-financial assets.

Current and non-current assets and liabilities (non current beingthose expected to be recovered or settled beyond 12 months)are disclosed in the notes, where relevant.

Statement of changes in equityThe statement of changes in equity presents reconciliations ofeach non-owner equity opening balance at the beginning ofthe reporting period to the closing balance at the end of thereporting period. It also shows separately changes due to theamount recognised in the net result and the amountrecognised in other comprehensive income related to othernon-owner changes in equity.

Cash flow statementCash flows are classified according to whether or not theyarise from operating activities, investing activities, or financingactivities. This classification is consistent with requirementsunder AASB 107 Statement of Cash Flows.

e) Income from transactions

Sales of servicesIncome from the provision of services is recognised when theservice has been provided.

f) Expenses from transactionsExpenses are recognised as they are incurred and reported inthe financial year to which they relate.

Employee expensesEmployee expenses include wages and salary, superannuationexpenses, annual leave and long service leave payments,fringe benefit tax and termination expenses which are reportedseparately.

Depreciation and AmortisationAll fixed assets (office equipment, furniture and fittings, andintangible assets) that have a limited useful life are depreciatedor amortised. Depreciation and amortisation are calculated on astraight line basis, at rates that allocate the asset’s value, lessany estimated residual value, over its estimated useful life.Estimated useful lives applicable for the years ended 30 June2013 and 30 June 2012 were as follows:

Asset class Useful life

Office equipment 5-7 yearsFurniture and fitting 5 yearsIntangible assets 10 years

Interest expenseInterest expenses are recognised in the period in which theyare incurred.

Supplies and servicesSupplies and services expenses are recognised in thereporting period in which they are incurred.

Operating lease expensesOperating lease expenses relate to three year computer leasesand are recognised as expenses in the reporting period inwhich they are incurred.

Provision for Doubtful debtsCollectability of debtors is reviewed on an ongoing basis. Aprovision for doubtful debts is recognised when there is objectiveevidence that the debts may not be collected. The write off ofbed debts is assessed at the end of each financial year.

Cost of services providedCost of services provided are costs related to the incomereceived as sales of services and are recognised in the sameperiod as income.

VITS NOTES TO THE FINANCIAL STATEMENT (continued)FOR THE YEAR ENDED 30 JUNE 2013



g) Other economic flows included in the net resultOther economic flows measure the change in volume or valueof assets or liabilities that do not result from transactions. Thisincludes:

Net gain/(loss) on non-financial assetsNet gain/(loss) on non-financial asset and liabilities includesrealised and unrealised gains and losses.

Disposal of non-financial assetsAny gain or loss on the sale of non-financial assets isrecognised on the date that control of the asset is passed tothe buyer and is determined after deducting from theproceeds the carrying value of the assets at that time.

h) Financial assets

Cash Cash includes cash on hand and cash in bank.

ReceivablesReceivables consists predominantly of amounts owing fromour debtors in relation to the service we have provided.

i) Non-financial assets

PrepaymentsPrepayments represent payments in advance of receipt ofservices.

Plant and equipmentAll non-current physical assets are measured initially at costand subsequently recognised at fair value less accumulateddepreciation and impairment.

The fair value of plant and equipment is normally determinedby reference to the assets depreciated replacement cost. Forplant and equipment, existing depreciated historical cost isgenerally a reasonable proxy for depreciated replacement costbecause of the short lives of the assets concerned.

Intangible assetsIntangible assets are initially recognised at cost. Subsequently,intangible assets with finite useful lives are carried at cost lessaccumulated amortisation and accumulated impairmentlosses. Costs incurred subsequent to initial acquisition arecapitalised when it is expected that additional future economicbenefits will flow to the company.

j) Liabilities

PayablesPayables consist predominantly of accounts payable andother sundry liabilities. Accounts payable represent liabilitiesfor services provided to the company prior to the end of thefinancial year that are unpaid, and arise when the companybecomes obliged to make future payments in respect of thepurchase of services. Other liabilities included in payablesconsist of goods and services tax and payroll tax payable.

BorrowingsBorrowings are initially measured at fair value, being the costof the borrowings, net of transaction costs.

Unearned IncomeUnearned Income is revenue received in advance for servicesthat have not been fully provided.

ProvisionsProvisions are recognised when the company has a presentobligation, the future sacrifice of economic benefits is probable,and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate ofthe consideration required to settle the present obligation atthe end of the reporting period, taking into account the risksand uncertainties surrounding the obligation. Where aprovision is measured using the cashflows estimated to settlethe present obligation, its carrying amount is the present valueof those cashflows.

Current provisionAll annual leave and unconditional vested long service leaverepresenting seven or more years of continuous service is:

(a) disclosed as a current liability as the company does nothave the unconditional right to defer the settlement of theentitlement should the employee take leave within 12months; and

(b) measured at:

(i) nominal value under AASB 119 Employee Benefitswhere a component of this current liability isexpected to fall due within 12 months after the end ofthe period; and

(ii) present value under AASB 119 Employee Benefitswhere the company does not expect to settle acomponent of this current liability within 12 months.

Non-current provisionLong service leave representing less than seven years ofcontinuous service is:

(a) disclosed in accordance with AASB 101 Presentation of Financial Statements as non-current liability; and

(b) measured at present value under AASB 119 EmployeeBenefits as the company does not expect to settle thisnon-current liability within 12 months.

k) Equity

Contribution by ownersAdditions to net assets which have been designated ascontributions by owners are recognised as contributed capital.

l) State Business CorporationOn the 17th December 1998 VITS LanguageLink (formerlyknown as Victorian Interpreting & Translating Service) wasdeclared to be a State Business Corporation.

On the 14th January, 1999 the Treasurer formerly announcedunder Section 46 of the State Owned Enterprises Act 1992that initial capital of VITS LanguageLink was to be the sum of$400,000.

On the 1st December 2001 under Order in Council VictorianInterpreting & Translating Service was granted a change ofname to VITS LanguageLink.

m) Australian Accounting Standards (AASs) issued but not yet effective

Certain new AASs have been published that are notmandatory for the 30 June 2013 reporting period. VITS hasnot early adopted these standards and is currently assessingtheir impact.


NOTE: 2013 2012$ $

2 SALE OF SERVICESInterpreting services 8,928,978 7,920,029Translation services 1,330,117 1,077,155Others 2,006 9,109

10,261,101 9,006,2923 EMPLOYEE EXPENSES

Salary, wages, annual leave and long service leave 1,172,060 1,093,096Employer superannuation contribution 77,904 74,719Total employee expenses 1,249,964 1,167,815

4 OTHER OPERATING EXPENSESOperating lease expense 23,607 21,095Bad debt written off 6,242 5,000

29,849 26,0955 RECEIVABLES

Trade receivables 1,256,754 1,434,002Other receivable 32,500 - Accrued revenue 301,067 237,242

1,590,321 1,671,2456 PLANT, EQUIPMENT & INTANGIBLE ASSETS

Plant and EquipmentFurniture and fittings (at fair value) 175,142 137,072Accumulated depreciation (139,359) (133,415)

35,783 3,657

Office equipment (at fair value) 205,472 191,311Accumulated depreciation (179,485) (157,432)

25,987 33,880

Total Plant and Equipment 61,769 37,537

Intangible AssetsBooking system 475,322 397,100Accumulated amortisation (163,011) (119,073)

312,311 278,027

Telecommunication/IVR system 391,269 372,928Accumulated amortisation (61,974) (24,414)

329,295 348,514

Infrastructure 96,789 93,933Accumulated amortisation (16,517) (6,886)

80,272 87,047

Total Intangible Assets 721,878 713,588

Total Plant, Equipment & Intangible Assets 783,647 751,126

Intangible Furniture & Office TotalAsset Fittings Equipment

30 June 2012Balance at 1 July 2011 351,943 3,782 53,025 408,749Additions 432,864 942 3,585 437,391Depreciation & amortisation (71,217) (1,067) (22,730) (95,014)Balance at 30 June 2012 713,590 3,657 33,879 751,126

30 June 2013Balance at 1 July 2012 713,590 3,657 33,879 751,126Additions 99,419 38,070 14,161 151,650Depreciation & amortisation (91,129) (5,944) (22,054) (119,127)Balance at 30 June 2013 721,878 35,783 25,987 783,647



NOTE: 2013 2012$ $

7 PAYABLES (CURRENT)Contractual 330,155 214,936Supplies and services 173,411 154,888Accrued expenses 503,565 369,825

Statutory 242,082 216,288Taxes payable 242,082 216,288

Total current payables 745,647 586,113

8 BORROWINGS (NON CURRENT)Loan from TCV 231,824 307,361 Total borrowings non current 231,824 307,361

9 PROVISIONSCurrentAnnual Leave 96,073 79,048Long Service Leave 80,047 72,569

176,120 151,617Non-CurrentLong service leave 23,390 15,255Restoration 32,500 -

55,890 15,255Total provisions 232,010 166,873

Movement in Provisons Annual leave LSL Restoration2013Opening balance 79,048 87,824 - Taken/paid (68,954) - - Additional provision provided 85,979 15,612 32,500Closing balance 96,073 103,436 32,5002012Opening balance 72,646 79,361Taken/paid (80,204) (3,360)Additional provision provided 86,606 11,823Closing balance 79,048 87,824

10 SUPERANNUATIONThe name and details of the major employee superannuation funds and contributions made thereto are as follows:

Contributions made

Fund No of employees No of employees Contributions Contributions2013 2012 2013 2012

Vic Super 15 16 42,891 43,171MLC 1 3 1,142 7,256Rest Super 1 2 194 1,618Australia Super 3 2 5,006 627Agest Super 0 1 - 691Telstra Super 1 1 3,857 3,892Health Super 1 1 3,437 2,893ESS Super 1 1 4,622 4,233ANZ Super 1 1 7,562 1,083AMP Super 1 1 5,224 1,305Uni Super 2 1 2,093 1,764Hesta 0 1 - 568Care Super 0 1 - 5,618Hostplus Super 1 0 1,876 -

77,904 74,719There were no contributions outstanding as at 30th June 2013 (2012 nil)



NOTE:

11 NOTES TO THE STATEMENT OF CASH FLOWSReconciliation of net result of the period 2013 2012Surplus (deficit) for the period 581,030 344,718Add:Depreciation 119,127 95,014Increase/(Decrease) in provision 65,137 14,865Increase/(Decrease) in payables 123,232 152,958(Increase)/Decrease in receivables and prepayments 94,702 (412,984)Net cash provided by operating activities 983,228 194,570

12 RESPONSIBLE PERSONS

The names of persons who were Responsible persons during the financial year are:

Responsible Ministers Hon. Nicholas Kotsiras, MP, Minister for Multicultural Affairs and Citizenship, Minister Energy and Resources (13/03/2013-30/06/2013)Hon. Kim Wells, MP, Treasurer for Victoria (1/07/2012-13/03/2013)Hon. Michael O'Brien, MP, Treasurer for Victoria (14/03/2013-30/06/2013)

Governing Board of Directors Hon. Phil Honeywood - ChairMr. John Williams - Deputy Chair Ms. Voula MessimeriMs. Katrin WillsMr. Arthur AposCr. Geoff Gough

Accountable Officer Mr. George Bisas

REMUNERATION OF BOARD OF DIRECTORS

Remuneration received or receivable by the responsible persons during the reporting period are shown below:Total Base Total Base2013 2013 2012 2012

Income of

$ 0 TO $ 9,999 5 5 10 * 10 *

$10,000 TO $19,999 1 1 1 1Total remuneration 66,456 66,456 58,972 58,9722

* The number of Board of Directors in 2012 is higher as the boards changed in mid financial year.Ministerial renumeration is disclosed in the annual report of the Department of Premier and Cabinet.

Remuneration of Accountable Officer Remuneration received or receivable by the accountable officer in connection with the management of VITS during the reporting period was in the range $170,000 - $179,999 ($160,000 - $169,999 in 2012).

Other Transactions of Responsible persons and related partiesOther related transactions and loans requiring disclosure under the Directions of the Minister of Finance have beenconsidered and there are no matters to report.

13 COMMITMENTS FOR EXPENDITUREOperating lease commitments

Commitments for minimum lease payments in relation to non-cancellable operating leases, not recognised asliabilities, are payable as follows:

2013 2012$ $

Within one year 126,752 102,736

Later than one year and not longer than 5 years 520,813 637,038

647,565 739,774



NOTE:

14 REMUNERATION OF AUDITORS 2013 2012

Victorian Auditor-General’s OfficeAudit of the financial statement 15,000 14,200

15 CONTINGENT ASSETS & CONTINGENT LIABILITIES

There were no contingent assets and contingent liabilities for VITS at 30 June 2013 or 30 June 2012.

16 FINANCIAL INSTRUMENTS

a) Cash on hand and at bank is valued at face value.Receivables are carried at nominal amounts due less any provision for doubtful debts. A provision for doubtfuldebts is recognised when collection of the full nominal amount is no longer probable. Payables and accrualsare recognised for amounts to be paid in the future. Payables are normally settled on 30 day terms. Loan fromTreasury Corporation Victoria (TCV) is initially measured at fair value, being the cost of the borrowings, net oftransaction costs.

b) Interest Rate RiskVITS exposure to interest rate risk and the effective weighted average interest rate for classes of financialassets and financial liabilities is set out in the following table:

2013 Weighted average Carrying Fixed Variable Non Interest effective interest rate Amount Interest Interest Bearing Total

% $ $ $Financial Assets

Cash and cash equivalents 1.90 1,127,698 73,057 1,054,491 150 1,127,698

Trade and other receivables 1,590,321 - - 1,590,321 1,590,321

Total financial assets 2,718,019 73,057 1,054,491 1,590,471 2,718,019

Financial Liabilities

Trade and other payables * 503,565 - - 503,565 503,565

Borrowings 4.15 231,824 - 231,824 - 231,824

Total financial liabilities 735,389 - 231,824 503,565 735,389

2012 Weighted average Carrying Fixed Variable Non Interest effective interest rate Amount Interest Interest Bearing Total

% $ $ $Financial AssetsFinancial assets

Cash and cash equivalents 2.93 543,656 - 543,506 150 543,656

Trade and other receivables 1,671,245 - - 1,671,245 1,671,245

Total financial assets 2,214,901 - 543,506 1,671,395 2,214,901Financial liabilities

Trade and other payables * 369,825 - - 369,825 369,825

Borrowings 4.15 307,361 - 307,361 - 307,361

Total financial liabilities 677,186 - 307,361 369,825 677,186

* Payable excludes Statutory Payable

Taking into account past performance, future expectations, economic forecasts, and management's knowledgeand experience of the financial markets, we believe the following movements are 'reasonably possible' overthe next 12 months (Base rates are sourced from Reserve Bank of Australia):- A parallel shift of -1% and +1% in market interest rates (AUD) from year-end rates of 1.90%.The table on the next page discloses the impact on net operating result and equity for each category offinancial instruments held by the company at year-end, if the above movements were to occur.



c) Credit riskCredit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financialloss to VITS. VITS has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficientcollateral where appropriate, as a means of mitigating the risk of financial loss from defaults.Credit risk arising from trade receivables is managed on an individual customer basis through a stringentcredit assessment process. Further assessments with mercantile agencies are instigated when monthlyreviews of ageing analysis of receivables require additional intervention. Customers exceeding their capacityand credit limits are placed on a cash on delivery basis.VITS does not have any significant credit risk exposure to any single counterparty or any group ofcounterparties having similar characteristics. The credit risk on liquid funds is limited because thecounterparties are banks with high credit ratings assigned by international credit-rating agencies.The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses,represents VITS's maximum exposures to credit risk without taking into account the value of any collateralobtained.

d) Liquidity RiskLiquidity risk is the risk that the company will be unable to meet its financial obligations as and when they falldue. The company manages its liquidity risk by:a) close monitoring of its short-term and long-tem borrowings, including monthly reviews on current and future borrowing levels and requirements;

b) careful maturity planning of our financial obligations based on forecasts of future cash flows; andc) maintaining an adequate level of uncommitted funds that can be drawn at short notice to meet our short term obligations.

MATURITY DATES

2013 Carrying Nominal Less than 1 1-5 years 5+ YearsAmount Amount year

Payables

Supplies and services 503,565 503,565 503,565 - -

Borrowings

Loan from TCV 231,824 231,824 78,732 153,092 -

Total 735,389 735,389 582,297 153,092 -

2012

Payables

Supplies and services 369,825 369,825 369,825 - -

Borrowings

Loan from TCV 307,361 307,361 75,537 231,824 -

Total 677,185 677,185 445,362 231,824 -

NOTE:

16 FINANCIAL INSTRUMENTS (CONTINUED)

INTEREST RATE RISK

-1 % +1%

-100 basis points +100 basis points2013 Profit Equity Profit Equity

Financial assets:

Cash and cash equivalents 1,127,698 (11,277) (11,277) 11,277 11,277

Trade and other receivables 1,590,321 - - - -

Financial liabilities:

Trade and other payables 503,565 - - - -

Loan from TCV 231,824 (2,318) (2,318) 2,318 2,318



e) Net Fair ValueManagement consider that the carrying amount of financial assets and the financial liabilities recorded in thefinancial statements approximates their fair values.The fair values and net fair values of financial assets and financial liabilities are determined as follows:- the fair value of financial assets and financial liabilities with standard terms and conditions and traded onactive liquid markets are determined with reference to quoted market prices; and- the fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.Transaction costs are included in the determination of net fair value.

2013 2012Note Carrying Amount Net Fair Value Carrying Amount Net Fair Value

Financial assetsCash and cash equivalents 1,127,698 1,127,698 543,656 543,656Trade and other receivables 5 1,590,321 1,590,321 1,671,245 1,671,245Total financial assets 2,718,019 2,718,019 2,214,901 2,214,901

Financial liabilitiesTrade and other payables 7 503,565 503,565 369,825 369,825Loan from TCV 231,824 231,824 307,361 307,361Total financial liabilities 735,389 735,389 677,185 677,185

NOTE:

16 FINANCIAL INSTRUMENTS (CONTINUED)



STATEMENT BY DIRECTORS AND MANAGEMENT



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