The University of New South Wales FINANCIAL REPORT 2008 · 2015-02-24 · Professor Wai Fong Chua 1...

The University of N

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The University of New South Wales

FINANCIAL REPORT 2008

www.unsw.edu.au

3 THE UNIVERSITY OF NEW SOUTH WALES www.unsw.edu.au2008 ANNUAL REPORT

02 Council Report07 Statement by members of Council08 Independent Auditor’s Report

10 2008 Financial Report 11 Income statements12 Balance sheets13 Statements of changes in equity14 Cash fl ow statements15 Notes to the fi nancial statements

93 Supplementary information

Contents

01

THE UNIVERSITY OF NEW SOUTH WALES www.unsw.edu.au2008 ANNUAL REPORT02 03

Council Report31 December 2008

Elected Council Members• Dr Christine Clifton

• Mr Geoffrey F. Lawson OAM

• Ms Jennifer Till

• Ms Gabrielle C. Upton

• Professor Joseph A. Wolfe

Members Appointed by Council• Mr Terry Davis

Members Elected duringthe Year• Dr Jennifer Alexander

• Professor Paul Compton

• Professor Anthony H. Dooley

• Ms Robyn Goodwin

• Associate Professor Shirley Scott

• Mr Samuel Thorp

• Professor Bruce Milthorpe

Members Appointed during the Year• Mr Brian Long was appointed by the

Council as a member commencing 2 August 2008 and continues in offi ce at the date of this report.

The members of the UNSW Council present their report on the consolidated entity consisting of The University of New South Wales and the entities it controlled at the end of or during the year ended 31 December 2008.

MembersThe following persons were the Council members of The University of New South Wales from the beginning of the year and continue in offi ce at the date of this report:

Ex-Offi cio Council Members• Mr David M. Gonski AC

• Professor Frederick G. Hilmer AO

• Professor Janet Chan (from 1 August 2008)

• Professor Anthony H. Dooley (until 31 July 2008)

Ministerial Appointments• Mr Paul R Pearce MP

• The Honourable Susan M. Ryan AO

• Mr Matthew Grounds

• Ms Jillian S. Segal AM

• Dr Wallace King AO

• Mr Warwick Negus

Former Members• Ms Angela M. Barrett was a member

from the beginning of the year and concluded her term of offi ce on 30 June 2008.

• Scientia Professor Mark Bradford was a member from the beginning of the year and concluded his term of offi ce on 30 June 2008.

• Mr Darren G. Challis was a member from the beginning of the year and concluded his term of offi ce on 30 June 2008.

• Professor Wai Fong Chua was a member from the beginning of the year and concluded her term of offi ce on 30 June 2008.

• Professor Brien A. Holden was a member from the beginning of the year and concluded his term of offi ce on 30 June 2008.

• Ms Kirstin A. Hunter was a member from the beginning of the year and concluded her term of offi ce on 30 June 2008.

• Mr Brian E. Suttor was a member from the beginning of the year and concluded his term of offi ce on 1 August 2008.

• Professor Bruce Milthorpe was elected for a two-year term commencing 1 July 2008 and resigned from his position on 31 October 2008.

MEMBER COUNCIL MEETINGS

A B

Ex-Offi cio Council Members

Mr David M. Gonski AC 5 5

Professor Frederick G. Hilmer AO 5 5

Professor Janet Chan 3 3

Professor Anthony H. Dooley 1 3

Ministerial Appointments

Mr Paul R. Pearce MP 4 5

The Hon. Susan M. Ryan AO 4 5

Mr Matthew Grounds 2 5

Ms Jillian S. Segal AM 5 5

Dr Wallace King AO 3 5

Mr Warwick Negus 1 5

Elected Council Members

Dr Christine Clifton 5 5

Mr Geoffrey F. Lawson OAM * 0 5

Ms Jennifer Till 5 5

Ms Gabrielle C. Upton 5 5

Professor Joseph A. Wolfe 5 5

Members Appointed by Council

Mr Terry Davis 4 5

Members Elected during the Year

Dr Jennifer Alexander 3 3

Professor Paul Compton 3 3


Ms Robyn Goodwin 3 3

Associate Professor Shirley Scott 1 1

Mr Samuel Thorp 3 3

Members Appointed during the Year

Mr Brian Long 2 2

Former Members

Ms Angela M. Barrett 2 2

Scientia Professor Mark Bradford 2 2

Mr Darren G. Challis 2 2

Professor Wai Fong Chua 1 2

Professor Brien A. Holden 1 2

Ms Kirstin A. Hunter 1 2

Mr Brian E. Suttor 3 3

Professor Bruce Milthorpe 1 2

Meetings of Council and CommitteesThe numbers of meetings of the members of The University of New South Wales Council and each committee held during the year ended 31 December 2008, and the numbers of meetings attended by each member were:

* Council, by resolution CL07/38, approved extended periods of leave of absence

A = number of meetings attended B = number of meetings held during the time the member held offi ce or was a member of the committee during the year

www.unsw.edu.au2008 ANNUAL REPORT04 05

Council Report (continued)31 December 2008

MEMBER MEETINGS OF COMMITTEES OF COUNCIL

AUDIT FINANCE NOMINATIONS &REMUNERATION

RISK MANAGEMENT

HONORARY DEGREES

STUDENT AFFAIRS

A B A B A B A B A B A B

Ex-Offi cio Council Members

Mr David M. Gonski AC 3 3 3 3 2 2

Professor Frederick G. Hilmer AO 3 3 3 3 1 2

Professor Janet Chan 2 2 1 1 1 1

Professor Anthony H. Dooley 1 1 2 2 1 1 0 2

Ministerial Appointments

Mr Paul R. Pearce MP 3 3

The Hon. Susan M. Ryan AO 2 4

Mr Matthew Grounds 1 3

Ms Jillian S. Segal AM 5 5 1 1 4 4

Dr Wallace King AO 0 3

Mr Warwick Negus 3 3

Elected Council Members

Dr Christine Clifton 2 2

Ms Gabrielle C. Upton 6 6 2 3 3 3 2 2

Ms Jennifer Till 3 3

Professor Joseph A. Wolfe 3 3

Members Appointed by Council

Mr Terry Davis 1 2

Members Appointed during the Year

Mr Brian Long 1 1

Members Elected during the Year

Dr Jennifer Alexander 1 1


Ms Robyn Goodwin 1 1 0 1

Mr Samuel Thorp 1 1

Former Members

Ms Angela M. Barrett 2 2

Mr Darren G. Challis

Professor Wai Fong Chua

Professor Brien A. Holden 1 2

Ms Kirstin A. Hunter 1 2

Mr Brian E. Suttor 5 5

Professor Bruce Milthorpe 1 1

External Committee Members

Mr Greg Coultas* 6 6

Mr Dale Cooper* 3 4

Mr Ron Cameron* 4 4

Principal ActivitiesDuring the year, the principal continuing activities of the consolidated entity consisted of:

• The provision of education and research facilities of University standard;

• The encouragement of the dissemination, advancement, development and application of knowledge informed by free inquiry;

• The provision of courses of study or instruction across a range of fi elds, and the carrying out of research, to meet the needs of the community;

• The participation in public discourse;

• The conferring of degrees, including those of Bachelor, Master and Doctor;

• The provision of teaching and learning that engage with advanced knowledge and inquiry;

• The development of governance, procedural rules, admission policies, fi nancial arrangements and quality assurance processes that are underpinned by the values and goals of the University’s core activities, and that are suffi cient to ensure the integrity of the University’s academic programs.

There are no signifi cant changes in the nature of the activities of the consolidated entity during the year.

Review of OperationsThe consolidated group reports a net loss after tax of $87.3m. These results incorporate a net loss of $77.9m for the University.

A = number of meetings attended B = number of meetings held during the time the member held offi ce or was a member of the committee during the year

Consolidated University

2008$’000

2007$’000

2008$’000

2007$’000

Total revenue and income1 1,154,476 1,012,151 1,063,534 923,064

Employee cost 2 (587,585) (560,117) (544,711) (519,405)

Other expenses1 (430,337) (367,830) (398,865) (325,919)

Depreciation and amortisation (85,217) (45,215) (83,557) (43,439)

Operating result before signifi cant items 51,337 38,989 36,401 34,301

Impairment of assets (92,672) (2,172) (68,280) (1,663)

Superannuation actuarial (losses)/gains (46,004) 3,737 (46,004) 3,737

UNSW Asia cost – (47,036) – (47,598)

Net result (87,339) (6,482) (77,883) (11,223)

1 Excludes deferred government superannuation

2 Excludes superannuation actuarial losses/gains

* Not a member of Council

The University’s net loss of $77.9m in 2008 compares to an $11.2m net loss in 2007. The 2008 result was signifi cantly impacted by a $68.3m revaluation of the University’s available-for-sale assets, refl ecting the impact of the global fi nancial crisis on the University’s investments.

Revenue and income increased by $140.5m over 2007 as a result of an increase in Australian Government fi nancial assistance and revenue from teaching and course fees.

Employee costs of the University increased $25.3m to $544.7m in 2008 from $519.4m in 2007 primarily due to a general 5 percent increase in staff salaries. Other expenses of the University increased by $73.0m, mainly attributable to higher scholarship grants and prizes, and increased cost of contract services, as compared to 2007.

The consolidated operating result before signifi cant items increased $12.3m to $51.3m in 2008 from $39.0m in 2007, of which $36.4m was attributable to the University.

THE UNIVERSITY OF NEW SOUTH WALES www.unsw.edu.au2008 ANNUAL REPORT06 07

Pursuant to Section 41C (1B), (1C) and (1D) of the Public Finance and Audit Act 1983 (as amended) we state that:

1. The fi nancial report exhibits a true and fair view of the fi nancial position as at 31 December 2008 and the fi nancial performance for the year then ended for the University; and

2. The fi nancial report for the year ended 31 December 2008 has been prepared in accordance with:

(a) the provisions of the Public Finance and Audit Act 1983 and the Commonwealth Department of Education, Employment and Workplace Relations Financial Statement Guidelines for Australian Higher Education Providers for the 2008 Reporting Period; and

(b) Australian Accounting Standards, Australian Accounting Standards Board Interpretations and other mandatory professional reporting requirements.

As required by the Financial Statement Guidelines for Australian Higher Education Providers for the 2008 Reporting Period issued by the Commonwealth Department of Education, Employment and Workplace Relations, we also certify to the best of our knowledge and belief that all the Australian Government Financial Assistance expended by the University during the year ended 31 December 2008 was expended for the purposes for which it was intended and that The University of New South Wales has complied with applicable legislation, contracts, agreements and program guidelines in making that expenditure.

Signed in accordance with a resolution of Council

Signifi cant Changes in the State of AffairsThere were no signifi cant changes in the State of Affairs of the University or any of its subsidiaries during the year and up to the date of this report.

Matters Subsequent to the End of the Financial YearThere were no matters subsequent to the end of the fi nancial year that require disclosure.

Likely Developments and Expected Results of OperationsThe likely developments in the operations and the expected results of those operations of the consolidated entity constituted by the University and the entities it controls from time to time are included in this report.

Environmental RegulationsThe primary environmental legislation impacting UNSW is the Protection of the Environment Operations Act 1997 (POEO) and the POEO Amendment Act 2005. Under this legislation,

UNSW’s laboratory activities have been recognised to represent the most signifi cant source of environmental risk and therefore have been managed accordingly.

Insurance of Offi cersThe University obtains commercial insurance to indemnify persons who serve on University Boards and Committees and on Boards and Committees of all entities in the group. Coverage also extends to University appointees who serve on the Boards of other entities, as designated representatives of the University and who are not otherwise indemnifi ed. This insurance provides funds to defend each offi cer and Board appointee of the University against claims from third parties which result from actual or alleged wrong acts, as permitted by law. The premium for this commercial insurance is paid for by the University, and the University self-insures all claims expenses which fall below the policy deductible or for liabilities which are excluded or not covered by the commercial insurance contract.

Council Report (continued)31 December 2008

Statement by Members of Council

Professor Frederick G. Hilmer AOVice-Chancellor and President

21 April 2009

Mr David Gonski ACChancellor

Proceedings on behalf of The University of New South WalesThere are no material proceedings against or on behalf of The University of New South Wales or its controlled entities.

This report is made in accordance with a resolution of the members of The University of New South Wales.

Mr David M. Gonski, ACChancellor21 April 2009

THE UNIVERSITY OF NEW SOUTH WALES www.unsw.edu.au2008 ANNUAL REPORT

Independent Auditor’s Report

08 09

www.unsw.edu.au2008 ANNUAL REPORT10 11

For the year ended 31 December 2008

Consolidated Parent2008 2007 2008 2007

Notes $'000 $'000 $'000 $'000Revenue from continuing operations

Australian Government financial assistanceAustralian Government Grants 2(g) 470,867 394,689 470,586 394,689HECS-HELP 2(g) 97,510 76,014 97,510 76,014FEE-HELP 2(g) 23,419 20,374 23,419 20,374

State and Local Government financialassistance 3 15,080 13,874 14,947 13,825HECS-HELP - Student payments 28,733 26,512 28,733 26,512Fees and charges 4 347,634 309,810 276,914 237,037Investment revenue 5 45,483 64,906 44,655 54,661Royalties, trademarks and licences 6 10,006 8,292 3,324 2,492Consultancy and contracts 7 77,114 68,323 70,400 60,305Other revenue 8 21,079 19,529 16,728 15,987

Total revenue from continuing operations 1,136,925 1,002,323 1,047,216 901,896

Gains on disposal of assets 10,539 515 10,499 275Share of net results of associates accountedfor using the equity method 22 (83) 57 - -Other investment income 5 - - - 12,399Other income 8 7,095 9,256 5,819 8,494

Total income from continuing operations 17,551 9,828 16,318 21,168

Total revenue and income from continuingoperations before deferred Governmentsuperannuation contributions 1,154,476 1,012,151 1,063,534 923,064

Deferred Government superannuationcontributions 364,769 (50,669) 364,769 (50,669)

Total revenue and income from continuingoperations

1,519,245 961,482 1,428,303 872,395

Expenses from continuing operationsEmployee related expenses 10 633,589 556,380 590,715 515,668Depreciation and amortisation 11 85,217 45,215 83,557 43,439Repairs and maintenance 12 24,426 24,463 23,275 22,916Finance costs 13 4,678 2,508 5,235 3,104Impairment of assets 14 92,672 2,172 68,280 1,663Losses on disposal of assets 932 2,755 700 2,770Other expenses 15 380,038 336,295 349,389 343,090Other investment losses 5 348 1,637 348 1,637

Total expenses from continuing operationsbefore deferred employee benefits forsuperannuation 1,221,900 971,425 1,121,499 934,287

Deferred employment benefits forsuperannuation 384,687 (50,669) 384,687 (50,669)

Total expenses from continuing operations 1,606,587 920,756 1,506,186 883,618

Operating result before income tax (87,342) 40,726 (77,883) (11,223)Income tax expense 16 (69) (172) - -Operating result from continuing operations (87,411) 40,554 (77,883) (11,223)

Operating result from discontinued operations 17 72 (47,036) - -Operating result after income tax for theperiod (87,339) (6,482) (77,883) (11,223)

Operating result attributable to members ofThe University of New South Wales 35(b) (87,339) (6,482) (77,883) (11,223)

The above income statements should be read in conjunction with the accompanying notes.

2008 Financial Reportfor the year ended 31 December 2008

Income statements

THE UNIVERSITY OF NEW SOUTH WALES

12 THE UNIVERSITY OF NEW SOUTH WALES 13www.unsw.edu.au2008 ANNUAL REPORT

As at 31 December 2008


Notes $'000 $'000 $'000 $'000

ASSETSCurrent assets

Cash and cash equivalents 18 76,327 41,850 41,918 19,226Receivables 19 78,689 59,120 73,490 52,317Inventories 20 1,479 1,548 - -Available-for-sale financial assets 23 1,584 436 1,584 436Held-to-maturity investments 24 83,000 - 83,000 -Non-current assets classified as held-for-sale 21 2,267 92,185 2,267 92,185

Total current assets 243,346 195,139 202,259 164,164

Non-current assetsReceivables 19 698,608 320,750 698,675 320,936Investments accounted for using the equitymethod 22 1,275 1,212 - -Available-for-sale financial assets 23 303,177 359,168 243,058 290,457Held-to-maturity investments 24 12,379 - 12,379 -Property, plant and equipment 26 1,272,541 1,254,638 1,266,019 1,247,468Intangible assets 28 2,140 2,214 100 141Other financial assets 25 3,855 2,854 3,854 2,854

Total non-current assets 2,293,975 1,940,836 2,224,085 1,861,856

Total assets 2,537,321 2,135,975 2,426,344 2,026,020

LIABILITIESCurrent liabilities

Trade and other payables 29 62,758 60,103 57,878 55,134Borrowings 30 3,433 13,690 3,433 23,246Provisions 31 146,575 142,455 142,235 138,418Current tax liabilities 32 - 85 - -Other liabilities 33 105,283 70,177 97,811 58,539

Total current liabilities 318,049 286,510 301,357 275,337

Non-current liabilitiesBorrowings 30 71,565 56,339 73,933 56,339Provisions 31 806,386 385,596 805,365 384,825Other liabilities 33 8,565 7,538 8,565 7,538

Total non-current liabilities 886,516 449,473 887,863 448,702

Total liabilities 1,204,565 735,983 1,189,220 724,039

Net assets 1,332,756 1,399,992 1,237,124 1,301,981

EQUITYParent entity interest

Statutory funds 34 62,105 54,297 62,105 54,297Reserves 35(a) 350,303 407,205 345,980 409,959Retained surplus 35(b) 920,348 938,490 829,039 837,725

Parent entity interest 1,332,756 1,399,992 1,237,124 1,301,981

Total equity 1,332,756 1,399,992 1,237,124 1,301,981

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



Notes $'000 $'000 $'000 $'000

Total equity at the beginning of the financialyear 1,399,992 1,231,307 1,301,981 1,132,049

Gain on revaluation of property, plant andequipment, net of tax 35(a) 20,296 211,287 20,296 211,287Fair value gain on intangible asset 35(a) - 425 - 425Loss on revaluation of available-for-salefinancial assets, net of tax 35(a) (91,929) (36,339) (75,385) (30,557)Transferred to income statement 35(a) 90,969 (128) 68,115 -Exchange differences on translation offoreign operations 35(a) 767 (78) - -

Net income recognised directly in equity 20,103 175,167 13,026 181,155

Operating result for the period (87,339) (6,482) (77,883) (11,223)Total recognised income and expense forthe period (67,236) 168,685 (64,857) 169,932

Total equity at the end of the financial year 1,332,756 1,399,992 1,237,124 1,301,981

Total recognised income and expense for theyear is attributable to:

Members of The University of New SouthWales (67,236) 168,685 (64,857) 169,932

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

Balance sheets Statements of changes in equity


Notes to the fi nancial statements



Notes $'000 $'000 $'000 $'000

Cash flows from operating activitiesAustralian Government Grants received

CGS and other DEEWR grants 46.1 166,310 148,882 166,310 148,882Higher Education Loan Programs 46.2 121,616 90,971 121,616 90,971Scholarships 46.3 11,686 10,809 11,686 10,809DIISR research grants 46.4 87,634 84,975 87,634 84,975Better Universities Renewal Funding 46.5 26,100 - 26,100 -Australian Research Council grants 46.6

Discovery 46.6(a) 31,663 29,177 31,663 29,177Linkages 46.6(b) 16,588 12,882 16,588 12,882Networks and Centres 46.6(c) 6,660 5,821 6,660 5,821

Other Australian Government grants 2(h) 133,769 112,738 133,769 112,738State and Local Government grants 37,152 16,212 37,005 16,163HECS-HELP - student payments 29,128 26,512 29,128 26,512Receipts from student fees and othercustomers 481,154 415,287 386,837 363,863Payments to suppliers and employees(inclusive of goods and services tax) (1,041,050) (948,400) (959,030) (856,481)Investment income received 30,373 59,781 30,416 62,337Interest received 13,722 14,839 5,929 2,359Interest and other costs of finance paid (4,564) (2,423) (4,542) (3,104)GST recovered 7,425 10,690 7,122 10,388Income taxes paid (145) (274) - -

Net cash provided by operating activities 43 155,221 88,479 134,891 118,292

Cash flows from investing activitiesProceeds from sale of property, plant andequipment 103,552 417 103,323 406Payments for property, plant and equipment (87,407) (95,903) (86,640) (95,063)Proceeds from sale of available-for-sale andother financial assets 62,873 160,727 55,439 145,806Payments for available-for-sale and otherfinancial assets (200,013) (205,711) (186,725) (204,877)Proceeds from sale of intangible assets 675 - 675 -Payment for intangible assets (2,153) (1,870) - -Repayment of loans 1,500 - 1,500 -

Net cash used in investing activities (120,973) (142,340) (112,428) (153,728)

Cash flows from financing activitiesProceeds from borrowings 17,306 41,172 17,306 41,172Repayment of borrowings (17,077) - (17,077) -

Net cash provided by financing activities 229 41,172 229 41,172

Net increase/(decrease) in cash and cashequivalents 34,477 (12,689) 22,692 5,736

Cash and cash equivalents at the beginningof the financial year 41,850 54,539 19,226 13,490

Cash and cash equivalents at the end of thefinancial year 18 76,327 41,850 41,918 19,226

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

31 December 2008

Note Contents of the notes to the financial statements Page

1 Summary of significant accounting policies 8Revenue

2 Australian Government financial assistance including HECS-HELP and other AustralianGovernment loan programs 19

3 State and Local Government financial assistance 224 Fees and charges 225 Investment revenue and income 236 Royalties, trademarks and licences 237 Consultancy and contracts 238 Other revenue and income 249 Revision of estimates 24

Expenses10 Employee related expenses 2511 Depreciation and amortisation 2612 Repairs and maintenance 2613 Finance costs 2614 Impairment of assets 2615 Other expenses 2716 Income tax 2717 Discontinued operation 28

Assets18 Cash and cash equivalents 2919 Receivables 3020 Inventories 3221 Non-current assets classified as held for sale 3222 Investments accounted for using the equity method 3223 Available-for-sale financial assets 3424 Held-to-maturity investments 3525 Other financial assets 3526 Property, plant and equipment 3627 Public Private Partnerships (PPP) 4128 Intangible assets 42

Liabilities29 Trade and other payables 4330 Borrowings 4431 Provisions 4632 Current tax liabilities 4733 Other liabilities 47

Equity34 Statutory funds 4835 Reserves and retained surplus 4936 Key management personnel disclosures 5137 Remuneration of auditors 5438 Contingencies 5439 Commitments 5540 Subsidiaries 5741 Joint venture operations 5842 Events occurring after the balance sheet date 6043 Reconciliation of operating result after income tax to net cash flows from operating activities 6044 Financial risk management 6145 Defined Benefit Plans 6946 Acquittal of Australian Government financial assistance 75

Cash fl ow statements

16

2730303131313232

3334343434353536

3738404040424343444950

5152545555

56575962626365666868697783

16 THE UNIVERSITY OF NEW SOUTH WALES


17www.unsw.edu.au2008 ANNUAL REPORT


31 December 2008

1 Summary of significant accounting policiesThe principal accounting policies adopted in the preparation of the financial report are set out below. These policies havebeen consistently applied to all the years presented, unless otherwise stated. The financial report includes separatefinancial statements for The University of New South Wales (the "University") as an individual entity (the "parent entity")and the consolidated entity (the "Group") consisting of the University and its controlled entities.

(a) Basis of preparation

This general purpose financial report has been prepared on an accrual basis in accordance with the requirements of thePublic Finance and Audit Act 1983 and Public Finance and Audit Act Regulations 2005, Australian Accounting Standards,other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretationsand the Financial Statement Guidelines for Australian Higher Education Providers for the 2008 Reporting Period issued bythe Department of Education, Employment and Workplace Relations (DEEWR) and other State/Australian Governmentlegislative requirements.

Compliance with IFRSsThe financial statements and notes of the University comply with Australian Accounting Standards, some of which containrequirements specific to not-for-profit entities that are inconsistent with IFRS requirements. The parent entity has electedto apply the relief provided to parent entities in respect of certain disclosure requirements contained in AASB 124 RelatedParty Disclosures.

Historical cost conventionThese financial statements have been prepared under the historical cost convention, as modified by the revaluation ofavailable-for-sale financial assets, financial assets and liabilities at fair value through the income statement and certainclasses of property, plant and equipment.

Critical accounting estimatesThe preparation of financial statements in conformity with Australian Accounting Standards requires the use of certaincritical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’saccounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions andestimates are significant to the financial statements, are disclosed below:

i. Superannuation liability - Deferred Government Receivables Certain superannuation liabilities are expected to be fully funded by the Federal Government as recognised in theDEEWR 2004-2005 financial statements and confirmed in correspondence from DEEWR. The calculation of theliability requires the use of various assumptions. Refer to note 45 for details of various assumptions used incalculating the superannuation liabilities and the corresponding deferred Government receivables.

ii. Employee and contractor related provisions and obligations The Group makes provisions in respect of contributions on behalf of its employees to UniSuper and additional oncosts on payments made to contractors.

The Group assesses the appropriateness of these provisions at each reporting date by evaluating conditionsspecific to the Group. The calculation of these provisions requires the use of various assumptions, such asexpected rate of return on the funds and superannuation entitlements, and is based on a range of possibleoutcomes.

(b) Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the parent entity asat 31 December 2008 and the results of all controlled entities for the year then ended.

Controlled entities are all those entities (including special purpose entities) over which the Group has the power to governthe financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. Theexistence and effect of potential voting rights that are currently exercisable or convertible are considered when assessingwhether the Group controls another entity.

Controlled entities are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of controlled entities by the Group.

31 December 2008(continued)

1 Summary of significant accounting policies (continued)

(b) Principles of consolidation (continued)

Where an additional ownership interest is acquired in an entity that is already controlled, the Group has elected to adoptthe “modified parent entity” approach. This approach involves treating the difference between consideration paid and thebook value of assets acquired as goodwill (where the consideration exceeds the book value of the assets acquired) or as adiscount recorded through the income statement account (where the consideration is less than the book value of theassets acquired).

All inter-entity transactions, balances and unrealised gains on transactions are eliminated in full on consolidation.Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.Accounting policies of controlled entities have been changed where necessary to ensure consistency with the policiesadopted by the Group.

(c) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying ashareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the parententity's financial statements using the cost method and in the consolidated financial statements using the equity method ofaccounting, after initially being recognised at cost. The Group's investment in associates includes goodwill (net of anyaccumulated impairment loss) identified on acquisition.

The Group's share of its associates' post acquisition profits or losses is recognised in the income statement, and its shareof post acquisition movements in reserves is recognised in reserves. The cumulative post acquisition movements areadjusted against the carrying amount of the investment. Dividends receivable from associates are recognised in the parententity's income statement, while in the consolidated financial statements they reduce the carrying amount of theinvestment.

When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any otherunsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made paymentson behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interestin the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of theasset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with thepolicies adopted by the Group.

(d) Joint ventures and Cooperative Research Centres

The Group has interests in Cooperative Research Centres (CRC) which requires the Group to contribute in cash and inkind based on the proportion of the interest the Group has in the CRC.

Contributions in cash and in-kind are expensed and included in the income statement. The Group's share of contributionsare not included in the balance sheet. In the event that a CRC's research results in a move to commercialisation, aseparate legal entity is established and the Group's share of the new entity is treated as an available-for-sale financialasset, joint venture, associate or controlled entity as appropriate.

(e) Public Private Partnerships (PPP)

The Group enters into PPP with the private sector in relation to the construction and operation of new studentaccommodation. Each individual PPP is accounted for in accordance with its substance and economic reality, and notmerely its legal form. The Group recognises the new buildings that is the subject of the PPP as an asset only when itdetermines it has the majority of the risks and benefits in relation to those buildings. Land leased to the private sector andany other service elements that are part of the PPP, but are not the buildings, are accounted for separately in accordancewith the applicable Australian Accounting Standards.







(f) Foreign currency translation

(i) Functional and presentation currencyItems included in the financial statements of each of the controlled entities are measured using the currency of the primaryeconomic environment in which the entity operates ('the functional currency'). The consolidated financial statements arepresented in Australian dollars, which is the parent entity's functional and presentation currency.

(ii) Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the datesof the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from thetranslation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognisedin the income statement.

Translation differences on non-monetary items, such as equities held at fair value through income statement, are reportedas part of the fair value gain or loss. Translation differences on non-monetary items, such as equities classified asavailable-for-sale financial assets, are included in the revaluation reserve in equity.

(iii) Controlled entitiesThe results and financial position of all the controlled entities (none of which has the currency of a hyperinflationaryeconomy) that have a functional currency different from the presentation currency are translated into the presentationcurrency as follows:

• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balancesheet;

• income and expenses for each income statement are translated at average exchange rates (unless this is not areasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which caseincome and expenses are translated at the dates of the transactions); and

• all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and ofborrowings are taken to equity. When a foreign operation is sold or borrowings repaid, a proportionate share of suchexchange differences are recognised in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of foreign entities are treated as assets and liabilities of theforeign entities and translated at the closing rate.

(g) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are netof returns, duties and taxes paid.

Revenue is recognised for the major business activities as follows:

(i) Government grantsFinancial assistance provided by the Australian Government is recognised in the year in which it is received or whenentitlement for the revenue is established.

(ii) Student fees and chargesStudent fees are recognised as revenue in the year in which the service is provided. The student fees received that relateto courses to be held in future periods are treated as income in advance.

(iii) Sale of goodsSales revenue comprises revenue earned (net of returns, discounts and allowances) from the supply of products toentities outside the Group. Sales revenue is recognised when control and title of goods passes to the customer.

(iv) Fees and charges for servicesRevenue from services rendered is recognised in the period in which the service is provided, having regard to the stage ofcompletion of the service.



(g) Revenue recognition (continued)

(v) Investment incomeInterest income is recognised as it accrues. Dividends income is recognised when the dividend is declared by thesubsidiary or investee.

(vi) Other revenueRepresents miscellaneous income and other grant income not derived from core business and is recognised when it isearned.

(h) Income tax

The parent entity is exempt from income tax under Commonwealth income taxation legislation. Within the Group however,there are entities that are not exempt from this legislation.

For those entities not exempt from tax, the income tax expense or benefit for the period is the tax payable on the currentperiod's taxable income based on the income tax rate for each jurisdiction adjusted by changes in deferred tax assets andliabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts inthe financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when theassets are recovered or liabilities are settled, based on those tax rates which are enacted or substantially enacted for thejurisdiction where the entity is situated. The relevant tax rates are applied to the cumulative amounts of deductible andtaxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporarydifferences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised inrelation to these temporary differences if they arose in a transaction, other than a business combination, that at the time ofthe transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable thatfuture taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and taxbases of investments in controlled entities where the parent entity is able to control the timing of the reversal of thetemporary differences and it is probable that the differences will not reverse in the foreseeable future.

(i) Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified asoperating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged tothe income statement on a straight line basis over the period of the lease. Lease income from operating leases where theGroup is a lessor is recognised in the income statement on a straight-line basis over the lease term.

(j) Non-current assets (or disposal group) held for sale and discontinued operations

Non-current assets (or disposal group) are classified as held for sale and stated at the lower of their carrying amount andfair value less costs to sell if their carrying amount will be recovered principally through a sale transaction rather thanthrough continuing use.

A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not inexcess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date ofthe sale of the non-current asset (or disposal group) is recognised at the date of derecognition. An impairment loss isrecognised for any initial or subsequent write down of the asset (or disposal group) to fair value less costs to sell.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they areclassified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as heldfor sale continue to be recognised.

Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presentedseparately from the other assets in the balance sheets. The liabilities of a disposal group classified as held for sale arepresented separately from other liabilities in the balance sheets.







(j) Non-current assets (or disposal group) held for sale and discontinued operations (continued)

A discontinued operation is a component of the Group that has been disposed of or is classified as held for sale and thatrepresents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan todispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. Theresults of discontinued operations are presented separately on the face of the income statements.

(k) Impairment of assets

Intangible assets that have an indefinite useful life are not subject to depreciation or amortisation and are tested annuallyfor impairment. All other assets are reviewed for impairment whenever events or changes in circumstances indicate thatthe carrying amount may not be recoverable. An impairment loss is recognised in the income statement for the amount bywhich the asset's carrying amount exceeds its recoverable amount. An impairment loss on a revalued asset is recognisedagainst the revaluation reserve of that class of asset. The recoverable amount is the higher of an asset's fair value lesscosts to sell and value in use.

As per AASB 136 Impairment of assets in respect of not for profit entities, value in use is the depreciated replacement costof an asset when the future economic benefits of the asset are not primarily dependent on the asset's ability to generatenet cash inflows and where the entity would, if deprived of the asset, replace its remaining future economic benefits. Inrespect of for profit components of the Group, for the purposes of assessing impairment, assets are grouped at the lowestlevels for which there are separately identifiable cash flows (cash generating units).

(l) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highlyliquid investments with original maturities of three months or less from date of purchase that are readily convertible toknown amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bankoverdrafts are shown within borrowings in current liabilities on the balance sheet.

(m) Receivables

Receivables are recognised at the fair value of the amounts to be received, less provision for impaired receivables.Receivables are due for settlement no more than 30 days from the date of recognition.

Collectibility of receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off byreducing the carrying amount directly. Subsequent recoveries of amounts previously written off are credited againstimpairment of assets in the income statement.

A provision for impaired receivables is established when there is objective evidence that the Group will not be able tocollect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, theprobability that the debtor will enter bankruptcy or financial reorganisation and default or be delinquent in makingpayments are considered indicators that the receivable is impaired. The amount of the provision is the difference betweenthe asset’s carrying amount and the present value of estimated future cash flows. The amount of the provision isrecognised in the income statement within impairment of assets. Subsequent recoveries of amounts previously written offare credited against impairment of assets in the income statement.

(n) Inventories

Inventories are stated at the lower of cost and net realisable value. Costs are assigned to individual items of inventory onthe basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of businessless the estimated costs necessary to make the sale.

(o) Investments and other financial assets

The Group classifies its investments in the following categories: financial assets at fair value through income statement,loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends onthe purpose for which the investments were acquired. Management determines the classification of its investments atinitial recognition and re-evaluates this designation at each reporting date.



(o) Investments and other financial assets (continued)

(i) Financial assets at fair value through income statementThis comprises financial assets at fair value through the income statement on initial recognition. A financial asset isclassified in this category if acquired principally for the purpose of selling in the short term or if so designated bymanagement. The policy of management is to designate a financial asset if the possibility it will be sold in the short termexists and if the asset is subject to frequent changes in fair value. Assets in this category are classified as current assets.

(ii) Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in anactive market. They arise when the Group provides money, goods or services directly to a debtor with no intention ofselling the receivable. They are included in current assets, except for those with maturities greater than 12 months afterthe balance sheet date, which are classified as non-current assets. Loans and receivables are included in receivables inbalance sheet (note 19). Loans and receivables and held-to-maturity investments are carried at amortised cost using theeffective interest method.

(iii) Held-to-maturity investmentsHeld-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturitiesthat the Group's management has the positive intention and ability to hold to maturity. If the Group were to sell other thanan insignificant amount of held-to-maturity financial assets, the whole category would be reclassified as available-for-sale.Held-to-maturity investments are included in non-current assets, except for those with maturities less than 12 months fromthe reporting date, which are classified as current assets. Loans and receivables and held-to-maturity investments arecarried at amortised cost using the effective interest method.

(iv) Available-for-sale financial assetsAvailable-for-sale financial assets, comprising principally marketable equity securities (held through managed funds), arenon-derivatives that are either designated in this category or not classified in any of the other categories. They areincluded in non-current assets unless management intends to dispose of the investment within 12 months of the balancesheet date.

Purchases and sales of investments are recognised on the settlement date - the date on which the Group commits topurchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assetsnot carried at fair value through income statement. Financial assets are derecognised when the rights to receive cashflows from the financial assets have expired or have been transferred, and the Group has transferred substantially all therisks and rewards of ownership.

(v) Subsequent measurementAvailable-for-sale financial assets and financial assets at fair value through income statement are subsequently carried atfair value. Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fairvalue through income statement' category are included in the income statement in the period in which they arise.Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available-for-sale are recognised in equity in the available-for-sale financial assets revaluation reserve. When securities classified asavailable-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement asgains and losses from investment securities.

(vi) ImpairmentThe Group assesses at each balance sheet date whether there is objective evidence that a financial asset or group offinancial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolongeddecline in the fair value of a security below its cost is considered in determining whether the security is impaired. If anysuch evidence exists for available-for-sale financial assets, the cumulative loss, measured as the difference between theacquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in theincome statement is removed from equity and recognised in the income statement. Impairment losses recognised in theincome statement on equity instruments are not reversed through the income statement, but are recognised in equity inthe available-for-sale financial assets revaluation reserve.

(p) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or fordisclosure purposes.

The fair value of certain financial instruments traded in active markets is based on quoted market prices at the balancesheet date. The quoted market price used for financial assets and liabilities held by the Group is the current closing price.







(p) Fair value estimation (continued)

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.The Group uses a variety of methods and makes assumptions that are based on market conditions existing at eachbalance sheet date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instrumentsheld.

The nominal value less estimated credit adjustments of receivables and payables are assumed to approximate their fairvalues. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cashflows at the current market interest rate that is available to the Group for similar financial instruments.

(q) Property, plant and equipment

Land and buildings, including student accommodation, works of art and rare books are shown at fair value, based onannual valuations by external independent valuers, less any subsequent accumulated depreciation. Any accumulateddepreciation at the date of revaluation is restated proportionately with the change in the gross carrying amount of the assetso that the carrying amount of the asset after revaluation equals its revalued amount. All other property, plant andequipment is stated at cost less any accumulated depreciation and impairment, which is assumed to approximate their fairvalues. Cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, onlywhen it is probable that future economic benefits associated with the item will flow to the Group and the cost of the itemcan be measured reliably. All other repairs and maintenance are charged to the income statement during the financialperiod in which they are incurred.

Increases in the carrying amounts arising on revaluation of land and buildings are credited to property, plant andequipment revaluation reserves in equity. To the extent that the increase reverses a decrease previously recognised in theincome statement, the increase is first recognised in the income statement. Decreases that reverse previous increases inthat class of assets are first charged against revaluation reserves directly in equity, to the extent of the remaining reserveattributable to the asset class; all other decreases are charged to the income statement.

Land, works of art and rare books are not depreciated. Depreciation on the other classes of assets is calculated using thestraight line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives. The depreciation rates are as follows:

Asset Controlled Entities Parent- Buildings, including student accommodation 2.50% to 6.67% 2.50% to 6.67%- Computer equipment 20% to 33% 33.3%- Other equipment 10% 10% to 20%- Motor Vehicles 12% to 30% 12%- Library holdings 20% 20%- Leasehold improvements 2.50% to 20% 2.50% to 20%

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greaterthan its estimated recoverable amount (note 1(k)).

Gains and losses on disposals are determined by comparing net disposal proceeds with the carrying amount. The netgains and losses from the sale of assets are included in the income statement when the asset is derecognised. Whenrevalued assets are sold, it is the Group's policy to transfer the amounts included in property, plant and equipmentrevaluation reserves in respect of those assets to retained surplus.

(r) Intangible assets

(i) Research and development - PatentsExpenditure on research activities, undertaken with the prospect of obtaining new scientific or technical knowledge andunderstanding, is recognised in the income statement as an expense when it is incurred.



(r) Intangible assets (continued)

Expenditure on development activities, being the application of research findings or other knowledge to a plan or designfor the production of new or substantially improved products or services before the start of commercial production or use,is capitalised if the product or service is technically and commercially feasible; adequate resources are available tocomplete development and if it is sufficiently certain that the future economic benefits to the Group will cover not only theusual operational and administrative costs but also the development costs themselves. There are also several othercriteria relating to the development projects and the processes or products being developed, all of which have to be met tojustify asset recognition. The expenditure capitalised comprises all directly attributable costs, including costs of materials,services, direct labour and an appropriate proportion of overheads. Other development expenditure is recognised in theincome statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulatedamortisation. Amortisation is calculated using the straight-line method to allocate the cost over the period of the expectedbenefit, which will vary depending on useful life, usually 20 years.

(ii) LicencesLicences are carried at cost less accumulated amortisation and impairment losses. Licences that have a finite life areamortised using the straight line method to allocate the cost over their estimated useful lives. Licences that have anindefinite useful life are not amortised and are assessed for impairment annually and whenever there is an indication thatthe licences may be impaired.

(iii) Computer softwareComputer software is stated at cost less accumulated amortisation and impairment.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, onlywhen it is probable that future economic benefits associated with the item will flow to the Group and the cost of the itemcan be measured reliably. All other repairs and maintenance are charged to the income statement during the financialperiod in which they are incurred.

Computer software is amortised using the straight line method to allocate its cost, net of any residual value, over itsestimated useful life of 5 years. Computer software is amortised at 20% per annum.

(s) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial yearwhich are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(t) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measuredat amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount isrecognised in the income statement over the period of the borrowings using the effective interest method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled orexpired. The difference between the carrying amount of a financial liability that has been extinguished or transferred toanother party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised inother income or other expenses.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liabilityfor at least 12 months after the balance sheet date.

(u) Finance costs

Finance costs incurred for the construction of any qualifying asset are capitalised during the period of time that is requiredto complete and prepare the asset for its intended use or sale. Other finance costs are expensed.

The capitalisation rate used to determine the amount of finance costs to be capitalised is the weighted average interestrate applicable to the entity's outstanding borrowings during the year.







(v) Provisions

Provisions for legal claims and service warranties are recognised when the Group has a present legal or constructiveobligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle theobligation; and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determinedby considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow withrespect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle thepresent obligation at the balance sheet date. The discount rate used to determine the present value reflects current marketassessments of the time value of money and the risks specific to the liability. The increase in the provision due to thepassage of time is recognised as a finance cost.

(w) Employee benefits

(i) Wages and salaries, annual leave and sick leaveLiabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12months of the reporting date, are recognised in provisions in respect of employees' services up to the reporting date, andare measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sickleave are recognised when the leave is taken and measured at the rates paid or payable. Regardless of the expectedtiming of settlements, provisions made in respect of employee benefits are classified as a current liability, unless there isan unconditional right to defer the settlement of the liability for at least 12 months after the reporting date, in which case itwould be classified as a non-current liability.

(ii) Long service leaveThe liability for long service leave is recognised in the provisions and measured as the present value of expected futurepayments to be made in respect of services provided by employees up to the reporting date using the projected unit creditmethod. Consideration is given to the expected future wage and salary levels, experience of employee departures andperiods of service. The expected future payments are discounted using market yields at the reporting date on nationalGovernment bonds with terms to maturity and currency that match, as closely as possible, the estimated future cashoutflows.

(iii) Retirement benefit obligationsAll employees of the Group are entitled to benefits on retirement, disability or death, from the superannuation planscontributed to by the Group. The plans have both defined benefit sections and defined contribution sections. The definedbenefit sections provide defined lump sum benefits based on years of service and final average salary. The definedcontribution section receives fixed contributions from the Group and its legal or constructive obligation is limited to thesecontributions.

A liability or asset in respect of each defined benefit superannuation plan is recognised in the balance sheet, and ismeasured as the present value of the defined benefit obligation at the reporting date plus unrecognised actuarial gains(less unrecognised actuarial losses) less the fair value of the superannuation fund's assets at that date and anyunrecognised past service cost. The present value of the defined benefit obligation is based on expected future paymentswhich arise from membership of the plan to the reporting date, calculated annually by independent actuaries using theprojected unit credit method. Consideration is given to the expected future wage and salary levels, experience ofemployee departures and periods of service.

Expected future payments are discounted using market yields at the reporting date on national government bonds withterms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are credited orcharged to income.

Past service costs are recognised immediately in the income statement, unless the changes to the superannuation planare conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, thepast service costs are amortised on a straight line basis over the vesting period.

Future taxes that are funded by the entity and are part of the provision of the existing benefit obligation (for example, taxeson investment income and employer contributions) are taken into account in measuring the net liability or asset.



(w) Employee benefits (continued)

Contributions to the defined contribution plan are recognised as an expense as they become payable. Prepaidcontributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

(iv) Unfunded superannuationThe unfunded liabilities recorded in the balance sheet under provisions have been determined by independent actuariesrelating to the defined benefit superannuation plans: State Superannuation Scheme (SSS), State AuthoritiesSuperannuation Scheme (SASS), State Authorities Non-Contributory Superannuation Scheme (SANCS) and the UNSWProfessorial Superannuation Fund. Information relating to these schemes is set out in note 45.

The Australian Government and the State Government are reviewing the current arrangements relating to superannuationpayments in respect of current and past members of unfunded (or partly funded) State superannuation schemes, refer tonote 45.

This arrangement is evidenced by the State Grants (General Revenue) Amendment Act 1987, Higher Education FundingAct 1988 and subsequent amending legislation. Accordingly the unfunded liabilities have been recognised in the balancesheet under Provisions with a corresponding asset recognised under Receivables. The recognition of both the asset andliability consequently does not affect the year end net position of The University of New South Wales and its controlledentities for those schemes.

(v) Workers' CompensationThe parent entity is a licensed self insurer for workers compensation in New South Wales (NSW) and the AustralianCapital Territory (ACT). In NSW the licence is issued under Division 5 of Part 7 of the Workers’ Compensation Act 1987 and under Chapter 8, Part 8.1 of the Workers Compensation Act 1951 in ACT.

Workers' compensation matters are managed through two funds, one to record the parent entity's workers' compensationactivities in New South Wales (known as the NSW Fund) and one to record the parent entity's workers' compensationactivities in the Australian Capital Territory (known as the ACT Fund).

As a self insurer, the parent entity sets a notional annual premium, which is charged on all employee salaries. Costs ofworkers' compensation claims, claims administration expenses and actuarially assessed increases/decreases in theprovision for outstanding claims liability are met from the notional premium. The outstanding claims liability includesincidents incurred but not reported as assessed actuarially. The University contributes to the WorkCover Authorities Fundsand Dust Diseases Fund in NSW. It is also a licence requirement that the University has reinsurance cover for largeclaims and maintains a provision for each fund in respect of outstanding claims liability as at 31 December each year.

(vi) Termination benefitsTermination benefits are payable when employment is terminated before the normal retirement date, or when an employeeaccepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it isdemonstrably committed to either terminating the employment of current employees according to a detailed formal planwithout possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntaryredundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.

(x) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is notrecoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or aspart of the expense.

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

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financingactivities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.

(y) Trusts and other liabilities

Revenue and expenses in respect of Trusts, Cooperative Research Centres and investments held on behalf of associatedentities are recognised under other liabilities. Funds held and invested on behalf of controlled entities are recognised asother liabilities in the balance sheet of the parent entity and are eliminated on consolidation.







(z) Key Management Personnel

For the Group, key management personnel are members of the University Council and persons having authority andresponsibility for planning, directing and controlling the activities of the Group, directly or indirectly.

(aa) Standards and interpretations applicable to financial reporting periods later than those ending 31 December2008

(i) Compiled Standards

Standard Name Application Date

AASB 5 Non current Assets Held for Saleand Discontinued Operation

Annual reporting periods beginning on or after 1 July 2008

AASB 101 Presentation of Financial Statements Annual reporting periods beginning on or after 1 January 2009

AASB 116 Property, Plant and Equipment Annual reporting periods beginning on or after 1 July 2008

AASB 123 Borrowing Costs Annual reporting periods beginning on or after 1 January 2009

AASB 127 Consolidated and Separate FinancialStatements


AASB 137 Provisions, Contingent Liabilities andContingent Assets


AASB 1004 Contributions Annual reporting periods beginning on or after 1 July 2008

These Compiled Standards include amendments contained in AASB 2007-3 to AASB 2008-13, which apply to annualreporting periods beginning on or after 1 July 2008. All other aspects of each compiled standards apply to the annualfinancial reporting period ended 31 December 2008.

(ii) Interpretations

Interpretation Name Application Date

1 Changes in Existing Decommissioning,Restoration and Similar Liabilities

Annual reporting periods beginning on or after 1 January 2009

12 Service Concession Arrangements Annual reporting periods beginning on or after 1 January 2009

16 Hedges of a Net Investment in aForeign Operation

Annual reporting periods beginning on or after 1 October 2008

17 Distributions of Non-cash Assets toOwners


1038 Contributions by Owners Made toWholly-Owned Public Sector Entities


These interpretations include amendments contained in Interpretation 2007-8 to AASB 2008-3, which apply to annualreporting periods beginning on or after 1 January 2009.

The possible impact of these standards and interpretations is not known and cannot be reliably estimated.

(ab) Rounding of amounts

Amounts in the financial report have been rounded to the nearest thousand dollars, or in certain cases, the nearest dollar.

(ac) Comparative amounts

Comparative figures have been reclassified and repositioned in the financial statement, where necessary, to conform withthe basis of presentation and classification used in the current year.



(ad) Working capital

At 31 December 2008, the parent entity had current assets of $202,259,000 (2007: $164,164,000) and current liabilities of$301,357,000 (2007: $275,337,000) - including long service leave provisions of $71,135,000 (2007: $62,467,000)expected to be settled after more than 12 months, resulting in an excess of current liabilities of $99,098,000 (2007: $111,173,000). The parent entity's non-current available-for-sale financial assets of $243,058,000 (2007:$290,457,000),some of which are held for a specific purpose, are readily convertible to cash.

2 Australian Government financial assistance including HECS-HELP and other AustralianGovernment loan programs


Notes $'000 $'000 $'000 $'000(a) Commonwealth Grants Scheme andOther Grants 46.1

Commonwealth Grants Scheme 158,102 137,674 158,102 137,674Indigenous Support Program 620 541 620 541Equity Support Program 143 141 143 141Disability Support Program 198 108 198 108Workplace Reform Program 1,907 1,899 1,907 1,899Workplace Productivity Program 694 852 694 852Learning & Teaching Performance Fund 9,509 6,650 9,509 6,650Capital Development Pool - 652 - 652Collaboration & Structural Reform Program 288 365 288 365Improving the Practical Component ofTeacher Education Initiative 236 - 236 -Transitional Cost Program 1,963 - 1,963 -

Total Commonwealth Grants Scheme andOther Grants 173,660 148,882 173,660 148,882

(b) Higher Education Loan Programs 46.2HECS-HELP 97,510 76,014 97,510 76,014FEE-HELP 23,419 20,374 23,419 20,374

Total Higher Education Loan Programs 120,929 96,388 120,929 96,388

(c) Scholarships 46.3Australian Postgraduate Awards 7,643 7,179 7,643 7,179International Postgraduate ResearchScholarships 1,361 1,478 1,361 1,478Commonwealth Education CostScholarships 1,077 861 1,077 861Commonwealth AccommodationScholarships 1,462 1,344 1,462 1,344Indigenous Access Scholarships 90 - 90 -

Total Scholarships 11,633 10,862 11,633 10,862

(d) DIISR Research 46.4Institutional Grants Scheme 23,071 22,769 23,071 22,769Research Training Scheme 48,001 43,182 48,001 43,182Research Infrastructure Block Grants 16,998 16,867 16,998 16,867Commercialisation Training Scheme 452 420 452 420Australian Scheme for Higher EducationRepositories 280 164 280 164Implementation Assistance Program 272 133 272 133

Total DIISR Research Grants 89,074 83,535 89,074 83,535






2 Australian Government financial assistance including HECS-HELP and other AustralianGovernment loan programs (continued)


Notes $'000 $'000 $'000 $'000

(e) Better Universities Renewal Funding 46.5Better Universities Renewal Funding 26,100 - 26,100 -

Total BURF 26,100 - 26,100 -

(f) Australian Research Council (ARC) 46.6(i) Discovery 46.6(a)Project 27,264 25,705 27,264 25,705Fellowships 3,902 1,656 3,902 1,656Indigenous Researchers Development 30 38 30 38Total Discovery 31,196 27,399 31,196 27,399

(ii) Linkages 46.6(b)Infrastructure 3,173 1,517 3,173 1,517International 231 283 231 283Projects 12,500 10,686 12,500 10,686Total Linkages 15,904 12,486 15,904 12,486

(iii) Networks and Centres 46.6(c)Centres 4,470 3,907 4,470 3,907Total Networks and Centres 4,470 3,907 4,470 3,907

Total Australian Research Council 51,570 43,792 51,570 43,792


2 Australian Government financial assistance including HECS-HELP and other AustralianGovernment loan programs (continued)


Notes $'000 $'000 $'000 $'000

(g) Other Australian Government financialassistance

Human services, health and aged care 53,316 47,867 53,316 47,867Employment and training 5,078 4,429 4,797 4,429Environment, sports and territories 3,242 1,489 3,242 1,489Social security 1,683 2,862 1,683 2,862Communication, information, technology,arts 1,516 1,544 1,516 1,544Other 4,512 2,817 4,512 2,817Department of Defence 44,748 40,387 44,748 40,387Australian Taxation Office 1,792 2,088 1,792 2,088AUSAID 2,943 4,135 2,943 4,135

Total Other Australian Government financialassistance 118,830 107,618 118,549 107,618

Total Australian Government financialassistance 591,796 491,077 591,515 491,077

ReconciliationAustralian Government grants 470,867 394,689 470,586 394,689HECS-HELP - Australian Governmentpayments 97,510 76,014 97,510 76,014Other Australian Government loanprograms [FEE-HELP] 23,419 20,374 23,419 20,374Total Australian Government financialassistance 591,796 491,077 591,515 491,077

(h) Australian Government Grants received- cash basis

CGS and Other DEEWR Grants 166,310 148,882 166,310 148,882Higher Education Loan Programs 121,616 90,971 121,616 90,971Scholarships 11,686 10,809 11,686 10,809DIISR Research 87,634 84,975 87,634 84,975Better Universities Renewal Funding 26,100 - 26,100 -ARC grants - Discovery 31,663 29,177 31,663 29,177ARC grants - Linkages 16,588 12,882 16,588 12,882ARC grants - Networks and Centres 6,660 5,821 6,660 5,821Other Australian Government Grants 133,769 112,738 133,769 112,738

Total Australian Government Grantsreceived - cash basis 602,026 496,255 602,026 496,255

OS-Help (Net) 262 1 262 1Total Australian Government fundingreceived - cash basis 602,288 496,256 602,288 496,256






3 State and Local Government financial assistanceConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Research financial assistance 11,785 13,421 11,652 13,372Other financial assistance 3,295 453 3,295 453Total State and Local Government financialassistance 15,080 13,874 14,947 13,825

4 Fees and chargesConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Course fees and chargesFee-paying overseas students 194,390 160,372 161,350 131,566Continuing education 17,224 19,749 16,915 16,638Fee-paying domestic postgraduate students 20,234 21,419 20,234 18,647Fee-paying domestic undergraduate students 18,130 12,966 18,130 12,966Fee-paying domestic non-award students 5,287 5,103 2,351 2,479

Total course fees and charges 255,265 219,609 218,980 182,296

Other non-course fees and chargesStudent accommodation 14,655 14,529 5,899 6,303Educational measurement and testing 15,787 16,043 3,496 3,358Late fees 920 907 920 907Library fines 473 519 473 519Parking fees and fines 1,791 1,531 1,791 1,532IT fees 1,246 1,035 1,637 1,430Photocopying 662 818 656 811Publication sales 1,588 1,404 1,352 1,369Rental charges 6,850 7,499 9,218 9,864Gym & Sport Fee 4,133 4,018 4,133 4,018Miscellaneous sales 19,065 19,061 3,522 3,378Other services 6,905 8,153 4,067 4,398Cost recoveries1 18,294 14,684 20,770 16,854

Total other fees and charges 92,369 90,201 57,934 54,741

Total fees and charges 347,634 309,810 276,914 237,037

1 The parent entity recovers costs paid on behalf of controlled entities, associated organisations and external entities.


5 Investment revenue and incomeConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Investment revenueInterest 16,420 14,839 7,876 2,359Dividends 29,138 54,295 37,181 56,793Income attributable to CRCs, trusts and externalorganisations (75) (1,491) (402) (1,754)Income attributable to superannuation fund - (2,737) - (2,737)

Total investment revenue 45,483 64,906 44,655 54,661

Other investment incomeGains on sale of AGSM to UNSW - - - 12,399

Total other investment income - - - 12,399

Other investment lossesLoss on sales of investments 348 1,637 348 1,637

Total other investment losses 348 1,637 348 1,637

Net investment revenue and income 45,135 63,269 44,307 65,423

6 Royalties, trademarks and licencesConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Royalties 1,958 1,487 1,441 940Licence fees 8,048 6,805 1,883 1,552Total royalties, trademarks and licences 10,006 8,292 3,324 2,492

7 Consultancy and contracts

Consolidated Parent2008 2007 2008 2007$'000 $'000 $'000 $'000

Consultancy 16,398 16,988 5,172 5,789Contract research

Commonwealth organisations and businessenterprises 4,852 7,063 4,852 7,336Local government 244 150 244 150Donations and bequests for research 8,448 6,770 9,257 7,207Non-Commonwealth research financial assistance 2,997 2,527 2,997 2,527Australian industry 13,060 11,553 13,060 12,316Overseas organisation 21,612 16,394 21,612 16,394Co-operative Research Centre 6,548 6,310 6,548 6,310Other organisation 2,955 568 2,955 568

Other contract revenue - - 3,703 1,708Total consultancy and contracts 77,114 68,323 70,400 60,305






8 Other revenue and incomeConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Other revenueDonations and bequests 12,768 12,491 6,437 7,536Scholarships and prizes 8,101 6,864 9,481 7,898Other external grants 210 174 810 553

Total other revenue 21,079 19,529 16,728 15,987

Other incomeSubscription 282 87 285 142Sponsorship 402 294 415 294Gain on discounting on EDB grants - 2,514 - 2,514Miscellaneous income 4,875 3,976 3,583 3,159Refund from ATO franking credits 1,536 2,385 1,536 2,385

Total other income 7,095 9,256 5,819 8,494

Total other revenue and income 28,174 28,785 22,547 24,481

9 Revision of estimates

(a) Depreciation expense

Since 1 January 2008, the expected pattern of consumption of the future economic benefits embodied in the Group'sbuildings were revised. The net effect of these changes in 2008 was an increase in the depreciation expense of the Groupand the parent entity of $35,081,000.

Assuming the assets are held until the end of their estimated useful lives, depreciation expense of the Group and theparent entity in future years in relation to these assets will be increased by the following amounts compared to the 2007comparative depreciation expense:

Year ending 31 December $'000

2009 34,1722010 34,1542011 31,5692012 30,870

(b) Employee related liabilities

A revision was made in 2008 in relation to an obligation for unpaid employment taxes identified in 2007. This revisionresulted in a reduction of the obligation from $9,500,000 to $3,000,000. The impact of this revision is included in employee related expenses for the year ended 31 December 2008, refer to note 10.

(c) Tax losses and liabilities

During the year, the Australian Taxation Office (ATO) reaffirmed the charitable tax status of NewSouth Innovations Pty Ltd(NSi) reversing a notification to the one received in 2007. Consequently, unrecognised tax losses reported in 2007 relatingto NSi are no longer available, refer to note 16.

(d) Investments accounted for using the equity method

In 2007, certain investments that should have been accounted for using the equity method were included in other financialassets. An amount of $997,000 has been reclassified in this financial report from other financial assets to the comparative2007 opening balance of investments accounted for using the equity method, refer to notes 22 and 25.


10 Employee related expensesConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Academic1

Salaries 231,417 211,413 224,350 203,278Contribution to superannuation and pensionschemes:

Emerging cost 8,508 8,374 7,537 7,688Funded 26,305 28,459 26,305 28,194Provisions for future emerging costs 23,368 (6,945) 23,368 (6,945)

Payroll tax 15,629 14,446 15,077 13,914Workers' compensation 402 602 311 508Long service leave expense 12,896 12,907 12,896 12,876Annual leave 15,427 14,714 15,427 14,714Other 1,246 1,010 1,246 1,010

Total academic 335,198 284,980 326,517 275,237

Non-academic2

Salaries 218,421 201,153 193,448 176,881Contribution to superannuation and pensionschemes:

Emerging cost 2,801 2,931 2,801 2,931Funded 27,617 25,025 24,504 23,174Provisions for future emerging costs 418 1,147 418 1,147

Payroll tax 16,113 14,121 14,828 12,773Workers' compensation 529 228 459 128Long service leave expense 12,164 7,023 10,687 6,573Annual leave 16,482 16,943 15,079 15,262Other 3,846 2,829 1,974 1,562

Total non-academic 298,391 271,400 264,198 240,431

Total employee related expenses 633,589 556,380 590,715 515,668

Deferred employment benefits for superannuation 384,687 (50,669) 384,687 (50,669)Total employee related expenses, includingdeferred employment benefits for superannuation 1,018,276 505,711 975,402 464,999

1Academic staff are paid under the Academic Staff Enterprise Agreement and include teaching staff, sessional teachingstaff, guest lecturers and academic research staff.2Non academic staff are paid under The University of New South Wales General Staff Enterprise Agreement and includegeneral and administrative staff, professional staff, examination supervisors and casual general staff.






11 Depreciation and amortisationConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

DepreciationBuildings and student accommodation 63,278 27,033 62,710 26,500Computer equipment 4,426 4,040 3,940 3,439Motor vehicles 234 405 164 333Other equipment 11,240 9,916 11,113 9,778Library holdings 3,186 2,991 3,186 2,991

Total depreciation 82,364 44,385 81,113 43,041

AmortisationComputer software 152 174 41 41Leasehold improvements 2,491 444 2,403 357Patents 210 212 - -

Total amortisation 2,853 830 2,444 398

Total depreciation and amortisation 85,217 45,215 83,557 43,439

12 Repairs and maintenanceConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Service contracts 10,643 8,975 10,560 8,875Buildings 10,413 11,964 9,429 10,698Other equipment 2,451 2,282 2,395 2,222Other repairs & maintenance 919 1,242 891 1,121Total repairs and maintenance 24,426 24,463 23,275 22,916

13 Finance costsConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Interest expense 4,678 2,508 5,235 3,104Total finance costs 4,678 2,508 5,235 3,104

14 Impairment of assetsConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Student debtors (473) (537) (473) (531)Sundry debtors 149 (817) 50 (1,222)Available-for-sale and other financial assets 90,969 1,993 68,115 3,390Property, plant and equipment 612 28 588 26Intangible assets 1,415 1,505 - -Total impairment of assets 92,672 2,172 68,280 1,663


15 Other expensesConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Scholarships, grants and prizes 66,431 59,510 71,875 59,453Non-capitalised equipment 29,707 26,321 30,387 26,188Advertising, marketing and promotional expenses 10,740 6,969 9,500 6,083Audit fees and other assurance services 1,707 1,140 967 673Consumables 33,666 33,546 30,940 30,915Travel and entertainment 36,372 31,573 34,184 29,158Catering expenses 3,879 3,015 3,546 2,640Commission to agents 8,932 6,833 6,188 3,267Computer software 3,859 4,145 3,819 4,013Contract services (including consultants) 115,287 96,427 110,107 90,589Cost of books sold 9,109 9,212 - -Energy and utilities 6,717 6,541 6,303 5,964Fees and charges 3,716 4,082 3,104 3,549Freight and carriage 3,856 3,207 2,373 1,729UNSW Asia's liabilities and closure costs1 - - - 47,598Operating lease expenses 8,694 7,434 6,398 5,308Insurance 2,481 3,013 2,477 3,004Licence fees 12,285 12,496 12,248 12,496Net foreign exchange losses/(gains) 6,720 188 6,645 (154)Overheads - postage and telephone 7,492 7,850 7,222 7,521Residential 5,922 5,818 - -PELS contribution to AGSM - 1,768 - 1,768Other operating expenses 2,466 5,207 1,106 1,328Total other expenses 380,038 336,295 349,389 343,090

1During the previous financial year, UNSW Asia’s liabilities and closure costs of $47,598,000 were assumed by the parententity, thus enabling UNSW Asia to enter into member’s voluntary liquidation. The liabilities and closure costs included aloan from ANZ Bank of $16,879,000 (refer to note 30(c)), a loan from the Economic Development Board (EDB) Singaporeof $11,878,000 (refer to note 30(f)), grants liability to the EDB of $13,810,000 (refer to note 33), staff termination costs of$3,454,000 and other closure costs of $1,577,000.

16 Income taxConsolidated

2008 2007$'000 $'000

(a) Income tax expense

Current tax 69 17269 172

Income tax expense is attributable to:Surplus from continuing operations 69 172Aggregate income tax expense 69 172






16 Income tax (continued)Consolidated

2008 2007$'000 $'000

(b) Numerical reconciliation of income tax expense to prima facie tax payable

Operating result before income tax (87,342) 40,726Tax at the Australian tax rate of 30% (2007: 30%) (26,202) 12,218Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:

Net income/(loss) of tax exempt entities 26,359 (12,041)Different tax rates applicable in other jurisdictions (83) (126)Unrecognised deferred tax asset not probable (5) 121Total income tax expense 69 172

(c) Tax losses

At 31 December 2008, the Group had no available tax losses (2007: nil), refer to note 9(c).

17Discontinued operation

(a) Description

As a result of the closure of the UNSW Asia Limited campus in Singapore during 2007, UNSW Asia School Limitedceased operations from 31 July 2008 when the last group of Foundation Year Students graduated. The Board agreed to amembers' voluntary liquidation of the Company and appointed a liquidator on 10 September 2008.

Comparative information relates to the closure of UNSW Asia in 2007. On 23 May 2007, UNSW Asia formerly known asUNSW Asia Limited announced the closure of its Singapore campus and cessation of its principal business. On 24December 2007, the company was placed into a members' voluntary liquidation.

(b) Financial performance and cash flow information

The financial performance and cash flow information presented for the seven months ended 31 July 2008 (2007: UNSWAsia for the period ended 21 December 2007) were:


Revenue 359 2,487 - -Expenses (285) (49,523) - -Operating result before income tax 74 (47,036) - -

Income tax expense (2) - - -Operating result from discontinued operation 72 (47,036) - -

Net cash outflow from operating activities (207) (32,845) - -Net cash (used)/provided by financing activities (117) 11,876 - -Net decrease in cash generated by discontinuedoperation (324) (20,969) - -


17 Discontinued operation (continued)

(c) Carrying amounts of assets and liabilities

The carrying amounts of assets and liabilities as at 31 July 2008 (2007: UNSW Asia as at 21 December 2007) were:


Cash at bank and on hand 152 350 - -Receivables - 268 - -

Total assets 152 618 - -

Trade and other payables (152) (618) - -Total liabilities (152) (618) - -

Net assets of discontinued operation - - - -

18 Cash and cash equivalentsConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Cash at bank and on hand 73,149 39,141 41,912 19,206Deposits at call and investments originally maturingwithin three months 3,178 2,709 6 20Total cash and cash equivalents 76,327 41,850 41,918 19,226

(a) Reconciliation to cash and cash equivalents at the end of the financial year

The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the statementof cash flows as follows:


Balances as above 76,327 41,850 41,918 19,226Balances per cash flow statement 76,327 41,850 41,918 19,226

(b) Cash at bank

The average interest rate was 6.32% (2007: 6.11%) per annum.

(c) Deposits at call

The average interest rate was 6.37% (2007: 6.15%) per annum.

(d) Cash held for specific purpose

At balance sheet date, $20,556,000 (2007: nil) is held for the capital funding for a Virology Institute Building, refer tonote 33.






19 ReceivablesConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

CurrentSundry debtors 40,752 30,416 37,948 26,053Less: Provision for impaired receivables (1,983) (2,443) (1,576) (2,002)

38,769 27,973 36,372 24,051

Student debtors 4,211 7,682 4,211 7,682Less: Provision for impaired receivables (3,749) (6,673) (3,749) (6,671)

462 1,009 462 1,011

Sundry advances 1,003 1,141 491 587Accrued income 15,129 11,881 15,276 11,807Payments in advance 21,468 17,056 18,942 14,861Investment income receivable 1,858 60 1,947 -

Total current receivables 78,689 59,120 73,490 52,317

Non-currentLoans - 1,500 250 1,750Deferred government contribution forsuperannuation 698,347 319,055 698,347 319,055Other 261 195 78 131

Total non-current receivables 698,608 320,750 698,675 320,936

Total receivables 777,297 379,870 772,165 373,253

(a) Impaired receivables

Terms of trade are 30 days. As at 31 December 2008, current receivables of the Group and the parent entity with anominal value of $8,881,000 and $8,485,000, respectively (2007: $14,710,000 and $14,277,000, respectively) wereimpaired. For student and non government debtors, the Group has provided fully for all receivables over 365 daysbecause historical experience is such that receivables that are past due beyond 365 days are generally not recoverable. Receivables between 90 days to 365 days are provided for based on estimated irrecoverable amounts from the sales ofservices and goods, determined by reference to past default experience. For government and semi governmentreceivables, the Group has provided 30 per cent for all receivables over 365 days based on past default experience.

The ageing of these receivables is as follows:


61 - 90 days 65 4 - -91 - 180 days 2,398 4,512 2,197 4,332181 - 270 days 1,025 1,071 943 927271 - 365 days 948 1,232 923 1,170over 365 days 4,445 7,891 4,422 7,848

8,881 14,710 8,485 14,277


19 Receivables (continued)(b) Past due but not impaired receivables

As at 31 December 2008, current receivables of the Group and the parent entity of $16,273,000 and $14,617,000respectively (2007: $10,255,000 and $8,293,000) were past due but not impaired. These relate to a number ofgovernment and semi government customers for whom there is no recent history of default.

The ageing analysis of these receivables is as follows:


31 - 60 days 8,646 6,513 7,827 5,41361 - 90 days 6,346 2,743 5,654 2,28191 - 180 days 822 668 732 376181 - 270 days 407 256 404 223271 - 365 days 26 - - -Over 365 days 26 75 - -

16,273 10,255 14,617 8,293

(c) Movements

Movements in the provision for impaired receivables are as follows:

Sundry debtorsOpening balance at 1 January 2,443 4,960 2,002 4,725Provision for impairment added/(reversed) during theyear 149 (817) 50 (1,222)Receivables written off during the year (609) (1,700) (476) (1,501)Closing balance at 31 December 1,983 2,443 1,576 2,002

Student debtorsOpening balance at 1 January 6,673 7,240 6,671 7,240Provision for impairment reversed during the year (473) (537) (473) (531)Receivables written off during the year (2,451) (30) (2,449) (38)Closing balance at 31 December 3,749 6,673 3,749 6,671

Sundry advancesOpening balance at 1 January - - - 3,071Receivables written off during the year - - - (3,071)Closing balance at 31 December - - - -

The creation and release of the provision for impaired receivables has been included in ‘impairment of assets' in theincome statement, refer to note 14. Amounts charged to the provision account are generally written off when there is noexpectation of recovering additional cash.

The other classes within the receivables do not contain impaired assets and are not past due. Based on credit history ofthese other classes, it is expected that these amounts will be received when due.






20 InventoriesConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

CurrentBooks

Inventories at cost 1,522 1,636 - -Provision for impairment (43) (88) - -

Total Inventories 1,479 1,548 - -

21 Non-current assets classified as held for saleConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Land1 - 91,510 - 91,510Student accommodation2 2,267 - 2,267 -Australian Post Office licence3 - 675 - 675Total non-current assets classified as held for sale 2,267 92,185 2,267 92,185

1This land is at 1408 Anzac Parade, Little Bay and was sold in 2008, the net proceeds of sale will be used to fund theconstruction of the Lowy Cancer Research Centre and additions to the Wallace Wurth Medical School.2This relates to the student accommodation at 12 & 30 Norton Street.3The licence for the operation of an Australian Post Office branch at Kensington campus was sold in 2008.

22 Investments accounted for using the equity methodConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Gross value 5,462 5,399 - -Less: cumulative impairment charge (4,187) (4,187) - -Total investments accounted for using the equitymethod 1,275 1,212 - -

ReconciliationOpening balance at 1 January 1,212 765 - -Share of (loss)/profit for the year (83) 57 - -Additions 753 - - -Transfers (607) 390 - -Closing balance at 31 December 1,275 1,212 - -


22 Investments accounted for using the equity method (continued)(a) Details of investments accounted for using the equity method

Name of entity DescriptionOwnership

Interest2008

%2007

%

- Australian Technology Park Innovation Pty Ltd Facilitation of commercialisationof start up companies 25.00 25.00

- Dosimetry & Imaging Pty Ltd Biotec 47.50 47.50- Acyte Biotech Pty Ltd1 Biotec 43.01 -- BT Imaging Pty Ltd2 Solar - 27.30

(b) Summarised financial information in respect of associates is set out below:


Financial PositionTotal assets 22,415 23,280 - -Total liabilities 2,717 2,628 - -Net assets 19,698 20,652 - -

Share of associates' net assets 5,462 5,399 - -

Financial PerformanceTotal revenue 3,260 3,107 - -Total expenses 3,311 2,879 - -(Loss)/profit (51) 228 - -

Share of associates' (loss)/profit (83) 57 - -

1On 28 November 2008, due to an issue of shares by the company to Uniquest Pty Ltd, UNSW's equity interest wasreduced from 68.0% to 43.01%. Consequently, UNSW lost control but still significantly influenced the entity at balancesheet date.2Following the issue of shares to other investors the Group's holding in BT Imaging Pty Ltd was reduced from 27.30% to16.98%, and therefore is no longer an associate entity.

Contingent liabilities and capital commitments arising from the Group's interests in associates and joint ventures aredisclosed in notes 38 and 39 respectively.






23 Available-for-sale financial assetsConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

CurrentMortgage backed securities 37 207 37 207Other (unit trusts) (b) 1,547 229 1,547 229Total current available-for-sale financial assets 1,584 436 1,584 436

Non-current Unlisted unit trusts- Listed domestic equities (c) 101,485 116,417 100,185 114,428- Unlisted domestic/international fixed interest (a) 148,272 181,423 93,433 117,597- Listed international equities (d) 50,078 57,625 49,312 56,396

Listed equities (e) 310 3,690 128 2,036Unlisted equities (f) 3,032 13 - -Total non-current available-for-sale financial assets 303,177 359,168 243,058 290,457

Total available-for-sale financial assets 304,761 359,604 244,642 290,893

The movement in the available-for-sale financial assets revaluation reserves are detailed in note 35(a).

(a) Unlisted domestic/international fixed interest

Unlisted fixed interest unit trusts are measured at year end by reference to the exit prices declared by fund managers.

(b) Other (unit trusts)

Cash management unit trusts are measured at year end by reference to the exit prices declared by fund managers.

(c) Listed domestic equities

Unlisted domestic equity unit trusts are measured at year end by reference to the exit prices declared by fund managers.The fund managers measure the listed equities at year end by reference to the Australian Securities Exchange.

(d) Listed international equities

Unlisted international equity unit trusts are measured at year end by reference to the exit prices declared by fundmanagers.

(e) Listed equities

At 31 December 2008, the parent entity owned 11,633,608 (2007: 11,633,608) and the Group owned 20,305,359 (2007:20,305,359) ordinary shares in Biosignal Limited. Shares are valued based on the bid price on the Australian SecuritiesExchange at balance sheet date.

(f) Unlisted equities

Unlisted equities are measured at year end at fair value. At 31 December 2008, the Group held investments in BT ImagingPty Ltd, Vecor Australia Pty Ltd, Locata Corporation Pty Ltd and Nanomed Pty Ltd, via its wholly owned subsidiaryNewSouth Innovations Pty Ltd.


24 Held-to-maturity investmentsConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

CurrentTerm deposit 83,000 - 83,000 -Total current held-to-maturity investments 83,000 - 83,000 -

Non- CurrentTerm deposit (a) 2,156 - 2,156 -Bonds (b) 10,223 - 10,223 -Total non-current held-to-maturity investments 12,379 - 12,379 -

Total held-to-maturity investments 95,379 - 95,379 -

(a) Term deposit

The average interest rate was 7.87% (2007: n/a) per annum.

(b) Bonds

Bonds include a 5 year bond of $5,000,000 (nominal value) at coupon rate of 8.5% per annum and a 10 year bond of$5,250,000 (nominal value) at coupon rate of 10.0% per annum.

25Other financial assetsConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Non-currentUnlisted companies (a) 105 104 104 104Unincorporated venture capital investment (b) 3,750 2,750 3,750 2,750Total non-current other financial assets 3,855 2,854 3,854 2,854

(a) Unlisted companies

The Group's and the parent entity's investments in the following companies and ventures are shown at cost lessimpairment losses.


Pacific Solar Pty Ltd 75 75 75 75Smart Internet Technology CRC Pty Ltd 1 1 1 1IDP Education Australia Ltd 1 1 1 1AARnet Pty Ltd 1 1 1 1B. Tech Avn Ltd 22 22 22 22U21 Equity Ltd 1 1 1 1PT UniREsources Pasada International 1 1 1 1Sydney Institute of Marine Science 1 1 1 1Other unlisted companies 2 1 1 1

Total 105 104 104 104

(b) Unincorporated venture capital investment

The unincorporated venture capital investment as at the balance sheet date represents the parent entity's investment inUniversity Innovation & Investment Trust No. 3.




Notes to the fi nancial statements26

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-22

0,42

615

6,46

21,

250,

878

5,97

9-

-15

,441

--

10,0

341,

659,

220

Accu

mul

ated

dep

reci

atio

n-

-(1

,554

)(8

27,2

02)

-(2

7,16

1)(2

,038

)(3

,581

)(6

6,55

1)(7

4,88

9)-

(1,0

02,9

76)

Acc

umul

ated

impa

irmen

t-

--

--

--

-(7

47)

--

(747

)52

,654

220,

426

154,

908

572,

290

5,97

96,

788

2,67

511

,860

53,2

608,

810

10,0

341,

099,

684

Mov

emen

ts:

Cos

t:A

dditi

ons

71,2

48-

440

-46

23,

941

96-

16,8

852,

831

-95

,903

Ass

et d

ispo

sals

(5,3

63)

--

(16,

038)

(94)

(3,3

95)

(2,1

45)

(3,0

59)

(5,3

70)

(3,7

27)

-(3

9,19

1)(W

rite-

dow

n)/re

vers

al o

f im

pairm

ent

--

--

--

-3,

007

(823

)-

-2,

184

Ass

ets

clas

sifie

d as

hel

d fo

r sal

e-

-(9

1,51

0)-

--

--

--

-(9

1,51

0)Tr

ansf

er

(107

,502

)-

3,97

710

1,43

0-

--

3,34

8(1

,253

)-

--

Exch

ange

diff

eren

ce-

--

(4)

-(2

2)-

-3

--

(23)

Rev

alua

tion:

Adju

stm

ent t

o co

st a

nd v

alua

tion

-13

,791

55,4

1779

,153

411

--

--

-3,

671

152,

443

Adju

stm

ent t

o ac

cum

ulat

ed d

epre

ciat

ion

--

3,00

055

,844

--

--

--

-58

,844

Acc

umul

ated

dep

reci

atio

n/im

pairm

ent:

Addi

tiona

l dep

reci

atio

n ch

arge

s-

-(1

,446

)(2

5,58

7)-

(4,0

40)

(405

)(4

44)

(9,9

16)

(2,9

91)

-(4

4,82

9)W

riteb

ack

for a

sset

dis

pose

d-

--

13,5

81-

2,56

079

155

83,

546

2,30

9-

23,3

45Tr

ansf

er-

--

--

--

(478

)47

8-

--

Impa

irmen

t cha

rges

/(rev

ersa

l)-

--

--

--

(2,5

86)

374

--

(2,2

12)

Clo

sing

net

boo

k am

ount

11,0

3723

4,21

712

4,78

678

0,66

96,

758

5,83

21,

012

12,2

0657

,184

7,23

213

,705

1,25

4,63

8

At 3

1 D

ecem

ber 2

007

Cos

t11

,037

--

251,

651

-34

,473

2,66

4-

130,

000

82,8

03-

512,

628

Valu

atio

n-

234,

217

124,

786

1,31

2,38

26,

758

--

18,7

37-

-13

,705

1,71

0,58

5Ac

cum

ulat

ed d

epre

ciat

ion

--

-(7

83,3

64)

-(2

8,64

1)(1

,652

)(6

,531

)(7

2,44

3)(7

5,57

1)-

(968

,202

)A

ccum

ulat

ed im

pairm

ent

--

--

--

--

(373

)-

-(3

73)

Net

boo

k am

ount

11,0

3723

4,21

712

4,78

678

0,66

96,

758

5,83

21,

012

12,2

0657

,184

7,23

213

,705

1,25

4,63

8

26Pr

oper

ty, p

lant

and

equ

ipm

ent(

cont

inue

d)

Con

solid

ated

Bui

ldin

gsun

der

cons

truc

tion

Land

Stud

ent

acco

mm

odat

ion

Bui

ldin

gsW

orks

of a

rtC

ompu

ter

equi

pmen

tM

otor

vehi

cles

Leas

ehol

dim

prov

emen

tsO

ther

equi

pmen

tLi

brar

yho

ldin

gsR

are

book

sTo

tal

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

At 1

Jan

uary

200

8C

ost

11,0

37-

-25

1,65

1-

34,4

732,

664

-13

0,00

082

,803

-51

2,62

8V

alua

tion

-23

4,21

712

4,78

61,

312,

382

6,75

8-

-18

,737

--

13,7

051,

710,

585

Accu

mul

ated

dep

reci

atio

n-

--

(783

,364

)-

(28,

641)

(1,6

52)

(6,5

31)

(72,

443)

(75,

571)

-(9

68,2

02)

Acc

umul

ated

impa

irmen

t-

--

--

--

-(3

73)

--

(373

)N

et b

ook

amou

nt11

,037

234,

217

124,

786

780,

669

6,75

85,

832

1,01

212

,206

57,1

847,

232

13,7

051,

254,

638

Mov

emen

ts:

Cos

t:A

dditi

ons

53,2

91-

203

-90

6,73

717

3-

24,9

441,

969

-87

,407

Ass

et d

ispo

sals

--

(927

)-

(25)

(6,1

67)

(1,0

14)

-(6

,077

)-

-(1

4,21

0)(W

rite-

dow

n)/re

vers

al o

f im

pairm

ent

--

--

(75)

--

873

--

-79

8A

sset

s cl

assi

fied

as h

eld

for s

ale

--

(2,2

80)

--

--

--

--

(2,2

80)

Tran

sfer

(2

9,99

9)3,

932

531

24,8

19-

--

717

--

--

Exch

ange

diff

eren

ce-

--

86-

47-

-15

--

148

Rev

alua

tion:

Adju

stm

ent t

o co

st a

nd v

alua

tion

-(3

,932

)11

,116

40,1

6023

1-

--

--

596

48,1

71Ad

just

men

t to

accu

mul

ated

dep

reci

atio

n-

-(1

3,70

6)(1

4,16

9)-

--

--

--

(27,

875)

Acc

umul

ated

dep

reci

atio

n/im

pairm

ent:

Addi

tiona

l dep

reci

atio

n ch

arge

s-

-(2

,009

)(6

1,26

9)-

(4,4

26)

(234

)(2

,491

)(1

1,24

0)(3

,186

)-

(84,

855)

Writ

ebac

k fo

r ass

et d

ispo

sed

--

4-

-6,

085

692

-5,

341

--

12,1

22Ex

chan

ge d

iffer

ence

s-

--

(88)

-(2

1)-

-(1

7)-

-(1

26)

Ass

ets

clas

sifie

d as

hel

d fo

r sal

e-

-13

--

--

--

--

13Im

pairm

ent c

harg

es/(r

ever

sal)

--

--

-(2

4)-

(983

)(4

03)

--

(1,4

10)

Clo

sing

net

boo

k am

ount

34,3

2923

4,21

711

7,73

177

0,20

86,

979

8,06

362

910

,322

69,7

476,

015

14,3

011,

272,

541

At 3

1 D

ecem

ber 2

008

Cos

t34

,329

--

276,

556

-35

,090

1,82

3-

148,

882

84,7

72-

581,

452

Val

uatio

n-

234,

217

133,

429

1,35

2,54

26,

979

--

20,3

27-

-14

,301

1,76

1,79

5Ac

cum

ulat

ed d

epre

ciat

ion

--

(15,

698)

(858

,890

)-

(27,

027)

(1,1

94)

(10,

005)

(78,

359)

(78,

757)

-(1

,069

,930

)A

ccum

ulat

ed im

pairm

ent

--

--

--

--

(776

)-

-(7

76)

Net

boo

k am

ount

34,3

2923

4,21

711

7,73

177

0,20

86,

979

8,06

362

910

,322

69,7

476,

015

14,3

011,

272,

541

31 D

ecem

ber 2

008

(con

tinue

d)

31 D

ecem

ber 2

008

(con

tinue

d)





Prop

erty

, pla

nt a

nd e

quip

men

t(co

ntin

ued)

Pare

nt

Bui

ldin

gsun

der

cons

truc

tion

Land

Stud

ent

acco

mm

odat

ion

Bui

ldin

gsW

orks

of a

rtC

ompu

ter

equi

pmen

tM

otor

vehi

cles

Leas

ehol

dim

prov

emen

tsO

ther

equi

pmen

tLi

brar

yho

ldin

gsR

are

book

sTo

tal

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

At 1

Jan

uary

200

7C

ost

47,2

91-

-13

7,75

6-

28,6

004,

285

-11

5,47

279

,972

-41

3,37

6Va

luat

ion

-22

0,42

615

6,46

21,

250,

878

5,90

2-

-12

,397

--

10,0

341,

656,

099

Accu

mul

ated

dep

reci

atio

n-

-(1

,554

)(8

22,0

80)

-(2

3,57

9)(1

,752

)(3

,024

)(6

4,10

7)(7

2,57

9)-

(988

,675

)A

ccum

ulat

ed im

pairm

ent

--

--

--

--

(747

)-

-(7

47)

Net

boo

k am

ount

47,2

9122

0,42

615

4,90

856

6,55

45,

902

5,02

12,

533

9,37

350

,618

7,39

310

,034

1,08

0,05

3

Mov

emen

ts:

Cos

t:A

dditi

ons

70,9

87-

440

-46

23,

552

17-

16,7

742,

831

-95

,063

Ass

et d

ispo

sals

-

--

(11,

987)

(52)

(1,6

22)

(2,0

66)

-(3

,213

)-

-(1

8,94

0)(W

rite-

dow

n)/re

vers

al o

f im

pairm

ent

--

--

--

-3,

007

(823

)-

-2,

184

Ass

ets

clas

sifie

d as

hel

d fo

r sal

e-

-(9

1,51

0)-

--

--

--

-(9

1,51

0)Tr

ansf

e r(1

07,2

41)

-3,

977

101,

204

--

-2,

059

1-

--

Rev

alua

tion:

Adju

stm

ent t

o co

st a

nd v

alua

tion

-13

,791

55,4

1779

,153

411

--

--

-3,

671

152,

443

Adju

stm

ent t

o ac

cum

ulat

ed d

epre

ciat

ion

--

3,00

055

,844

--

--

--

-58

,844

Acc

umul

ated

dep

reci

atio

n/im

pairm

ent:

Addi

tiona

l dep

reci

atio

n ch

arge

s-

-(1

,446

)(2

5,05

3)-

(3,4

39)

(333

)(3

57)

(9,7

78)

(2,9

92)

-(4

3,39

8)W

riteb

ack

for a

sset

dis

pose

d-

--

10,0

36-

1,55

967

0-

2,67

4-

-14

,939

Writ

ebac

k fo

r ass

ets

writ

ten-

dow

n-

--

--

--

--

--

-Im

pairm

ent c

harg

es/(r

ever

sal)

--

--

--

-(2

,584

)37

4-

-(2

,210

)C

losi

ng n

et b

ook

amou

nt11

,037

234,

217

124,

786

775,

751

6,72

35,

071

821

11,4

9856

,627

7,23

213

,705

1,24

7,46

8

At 3

1 D

ecem

ber 2

007

Cos

t11

,037

--

244,

622

-30

,530

2,23

6-

128,

211

82,8

03-

499,

439

Valu

atio

n-

234,

217

124,

786

1,31

2,38

26,

723

--

17,4

63-

-13

,705

1,70

9,27

6Ac

cum

ulat

ed d

epre

ciat

ion

--

-(7

81,2

53)

-(2

5,45

9)(1

,415

)(5

,965

)(7

1,21

1)(7

5,57

1)-

(960

,874

)A

ccum

ulat

ed im

pairm

ent

--

--

--

--

(373

)-

-(3

73)

Net

boo

k am

ount

11,0

3723

4,21

712

4,78

677

5,75

16,

723

5,07

182

111

,498

56,6

277,

232

13,7

051,

247,

468

26Pr

oper

ty, p

lant

and

equ

ipm

ent(

cont

inue

d)

Pare

nt

Bui

ldin

gsun

der

cons

truc

tion

Land

Stud

ent

acco

mm

odat

ion

Bui

ldin

gsW

orks

of a

rtC

ompu

ter

equi

pmen

tM

otor

vehi

cles

Leas

ehol

dim

prov

emen

tsO

ther

equi

pmen

tLi

brar

yho

ldin

gsR

are

book

sTo

tal

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

At 1

Jan

uary

200

8C

ost

11,0

37-

-24

4,62

2-

30,5

302,

236

-12

8,21

182

,803

-49

9,43

9V

alua

tion

-23

4,21

712

4,78

61,

312,

382

6,72

3-

-17

,463

--

13,7

051,

709,

276

Accu

mul

ated

dep

reci

atio

n-

--

(781

,253

)-

(25,

459)

(1,4

15)

(5,9

65)

(71,

211)

(75,

571)

-(9

60,8

74)

Acc

umul

ated

impa

irmen

t-

--

--

--

-(3

73)

--

(373

)N

et b

ook

amou

nt11

,037

234,

217

124,

786

775,

751

6,72

35,

071

821

11,4

9856

,627

7,23

213

,705

1,24

7,46

8

Mov

emen

ts:

Cos

t:A

dditi

ons

53,0

84-

203

-90

6,30

510

5-

24,8

841,

969

-86

,640

Ass

et d

ispo

sals

--

(927

)-

(25)

(5,0

43)

(924

)-

(6,0

29)

--

(12,

948)

(Writ

e-do

wn)

/reve

rsal

of i

mpa

irmen

t-

--

-(7

5)-

-87

3-

--

798

Ass

ets

clas

sifie

d as

hel

d fo

r sal

e-

-(2

,280

)-

--

--

--

-(2

,280

)Tr

ansf

e r(2

9,79

2)3,

932

531

24,6

46-

--

683

--

--

Rev

alua

tion:

Adju

stm

ent t

o co

st a

nd v

alua

tion

-(3

,932

)11

,116

40,1

6023

1-

--

--

596

48,1

71Ad

just

men

t to

accu

mul

ated

dep

reci

atio

n-

-(1

3,70

6)(1

4,16

9)-

--

--

--

(27,

875)

Acc

umul

ated

dep

reci

atio

n/im

pairm

ent:

Addi

tiona

l dep

reci

atio

n ch

arge

s-

-(2

,009

)(6

0,70

1)-

(3,9

40)

(164

)(2

,403

)(1

1,11

3)(3

,186

)-

(83,

516)

Writ

ebac

k fo

r ass

et d

ispo

sed

--

4-

-4,

994

631

-5,

305

--

10,9

34A

sset

s cl

assi

fied

as h

eld

for s

ale

--

13-

--

--

--

-13

Impa

irmen

t cha

rges

/(rev

ersa

l)-

--

--

--

(983

)(4

03)

--

(1,3

86)

Clo

sing

net

boo

k am

ount

34,3

2923

4,21

711

7,73

176

5,68

76,

944

7,38

746

99,

668

69,2

716,

015

14,3

011,

266,

019

At 3

1 D

ecem

ber 2

008

Cos

t34

,329

--

269,

268

-31

,792

1,41

7-

147,

066

84,7

72-

568,

644

Val

uatio

n-

234,

217

133,

429

1,35

2,54

26,

944

--

19,0

19-

-14

,301

1,76

0,45

2Ac

cum

ulat

ed d

epre

ciat

ion

--

(15,

698)

(856

,123

)-

(24,

405)

(948

)(9

,351

)(7

7,01

9)(7

8,75

7)-

(1,0

62,3

01)

Acc

umul

ated

impa

irmen

t-

--

--

--

-(7

76)

--

(776

)N

et b

ook

amou

nt34

,329

234,

217

117,

731

765,

687

6,94

47,

387

469

9,66

869

,271

6,01

514

,301

1,26

6,01

9

31 D

ecem

ber 2

008

(con

tinue

d)

31 D

ecem

ber 2

008

(con

tinue

d)






26 Property, plant and equipment (continued)

(a) Valuations of land, student accommodation

The valuation basis of land is fair value based on an 'in use' basis. The valuation basis of student accommodation is fairvalue on a 'highest best use' basis being the amounts for which the assets could be exchanged between willing parties inan arm's length transaction, based on current prices in an active market for similar properties in the same location andcondition. The revaluations for 2008 were based on independent assessments by CB Richard Ellis Pty Ltd as at 31December 2008.

(b) Valuations of buildings

The valuation basis of buildings is depreciated replacement cost. The 2008 revaluations were based on independentassessments by CB Richard Ellis Pty Ltd as at 31 December 2008.

(c) Valuations of rare books

The valuation basis of rare books is fair value being the amounts for which the assets could be exchanged between willingparties in an arms length transaction based on current prices in an active market. Where the market selling price is notavailable, fair value is measured at replacement cost. The revaluation was carried out by McWilliam & Associates Pty Ltdas at 31 December 2008.

(d) Valuations of works of art

The valuation basis of works of art is fair value being the amounts for which the assets could be exchanged betweenwilling parties in an arms length transaction based on current prices in an active market. Where the market selling price isnot available, fair value is measured at replacement cost. The revaluation was carried out by McWilliam & Associates PtyLtd as at 31 December 2008.

(e) Leasing arrangements

Certain parts of freehold land, buildings, student accommodation are leased to tenants under short-term and long-termoperating leases with rentals payable monthly.

Minimum lease payments by lessees to the Group and the parent entity (exclusive of GST) under non-cancellableoperating leases of properties not recognised in the financial statements are receivable as follows:


Within one year 2,839 2,849 5,029 5,260Later than one year but no later than five years 6,369 6,470 15,142 16,323Later than five years 43 653 3,549 7,006Net book amount 9,251 9,972 23,720 28,589

Total GST payable (at 10%) 925 997 2,372 2,859


27 Public Private Partnerships (PPP)(a) High Street Housing Project

In 2007, the parent entity entered into a PPP with UNSW Village Pty Limited to finance, design, construct and commissionstudent accommodation and maintain, manage and operate it for a period of 40 years. The carrying value of the existingbuildings on the development site of $1,800,000 was written down to nil in 2007 on the basis that there is no futureeconomic benefit to the parent entity from these buildings. The parent entity reimbursed UNSW Village Pty Limited for siteclearance works for an amount of $819,000.

Once the construction is completed, the parent entity will grant to UNSW Village Pty Limited a 40 year lease, theconcession period for the land making up the site. The parent entity retains the legal title to the land. Therefore thearrangement will be treated as an operating lease with the parent entity being a lessor and the land will be leased at apeppercorn rent. The land is recorded at fair value at the balance sheet date.

The parent entity does not have the significant risks and rewards in relation to the student accommodation during the PPPconcession period. Management estimates that the fair value of the student accommodation at the end of the concessionperiod will be nil. As such, the parent entity will not account for the accommodation in its accounts during the concessionperiod.

(b) New College Postgraduate Village Project

In 2007, the parent entity entered into a PPP with New College Postgraduate Village to finance, design, construct andcommission student accommodation and maintain, manage and operate it for a period of 49 years. At the end of theconcession period the student accommodation will either be transferred to the parent entity at nominal consideration or bedemolished. The carrying value of the existing buildings on the development site of $364,000 has been written down to nilin 2006 on the basis that the buildings were redundant.

Once the construction is completed, the parent entity will grant to New College Postgraduate Village a 49-year lease, theconcession period for the land making up the site. The parent entity retains the legal title to the land. Therefore thearrangement will be treated as an operating lease with the parent entity being a lessor and the land will be leased at apeppercorn rent. The land is recorded at fair value at the balance sheet date.

The parent entity does not have the significant risks and rewards in relation to the student accommodation during the PPPconcession period. Management estimates that the fair value of the student accommodation at the end of the concessionperiod will be nil. As such, the parent entity will not account for the accommodation in its accounts during the concessionperiod.






28 Intangible assets

Consolidated PatentComputersoftware Licence Total

$'000 $'000 $'000 $'000

At 1 January 2007Cost 6,418 37,707 250 44,375Accumulated amortisation and impairment (4,561) (37,243) - (41,804)Net book amount 1,857 464 250 2,571

Movements:Additions 1,592 278 - 1,870Disposals (577) (87) - (664)Revaluation surplus - - 425 425Transfers to assets held for sale - - (675) (675)Impairment charge (1,505) - - (1,505)Amortisation charge (212) (174) - (386)Write back of amortisation on disposals 578 - - 578Closing net book amount 1,733 481 - 2,214

At 31 December 2007Cost 7,433 38,300 - 45,733Accumulated amortisation and impairment (5,700) (37,819) - (43,519)Net book amount 1,733 481 - 2,214

Movements:Cost:Additions 2,078 75 - 2,153Disposal (1,176) - - (1,176)Exchange difference (84) - - (84)

Accumulated amortisation/impairment:Amortisation charge (210) (152) - (362)Write back of amortisation on disposals 788 - - 788Impairment charge (1,415) - - (1,415)Exchange difference 86 (64) - 22Closing net book amount 1,800 340 - 2,140

At 31 December 2008Cost 8,251 38,375 - 46,626Accumulated amortisation and impairment (6,451) (38,035) - (44,486)Net book amount 1,800 340 - 2,140


28 Intangible assets (continued)

Parent PatentComputersoftware Licence Total

$'000 $'000 $'000 $'000

At 1 January 2007Cost - 37,239 250 37,489Accumulated amortisation - (37,057) - (37,057)Net book amount - 182 250 432

Movements:Revaluation surplus - - 425 425Transfers to assets held-for-sale - - (675) (675)Amortisation charge - (41) - (41)Closing net book amount - 141 - 141

At 31 December 2007Cost - 37,239 - 37,239Accumulated amortisation - (37,098) - (37,098)Net book amount - 141 - 141

Movements:Revaluation surplus - - - -Amortisation charge - (41) - (41)Closing net book amount - 100 - 100

At 31 December 2008Cost - 37,239 - 37,239Accumulated amortisation and impairment - (37,139) - (37,139)Net book amount - 100 - 100

29 Trade and other payablesConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

CurrentOS-HELP liability to Australian Government 262 2 262 2Sundry creditors 37,019 31,859 39,264 34,467Accrued expenses 10,150 17,363 5,376 9,979Employee related liabilities 15,226 10,794 12,976 10,686Other payables 101 85 - -

Total current trade and other payables 62,758 60,103 57,878 55,134






30 BorrowingsConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

CurrentUnsecured

Convertible notes - 235 - -Loan from Economic Development Board (f) - 11,805 - 11,805Loans from related parties (a) - - - 9,791Loans from ANZ bank (c) 3,433 1,650 3,433 1,650

Total current unsecured borrowings 3,433 13,690 3,433 23,246

Non-currentUnsecured

Loans from related parties (a) - - 2,368 -Loans from ANZ bank (c) 32,123 15,229 32,123 15,229Financing arrangement with Westpac Office Trust (b) 39,442 41,110 39,442 41,110

Total non-current unsecured borrowings 71,565 56,339 73,933 56,339

Total borrowings 74,998 70,029 77,366 79,585

(a) Loan from related parties

This relates to an unsecured inter company loan of $9,000,000 from UNSW Global Pty Ltd (NSG) and interest payable.NSG bears the finance cost of 6.7% per annum (2007: 6.6%). In 2008, NSG paid an amount of $8,000,000 by off-settingthe loan with a dividend issued by NSG to the parent entity during the year. A new agreement was exchanged on 17December 2008 to extend the remaining balance to 31 January 2010.

(b) Financing arrangement with Westpac Office Trust

On 15 December 2006 an agreement was signed with Westpac, in which the parent entity granted a 99 year ground leaseover 222-227 Anzac Parade to Westpac Office Trust for an amount of $41,000,000 (excluding GST), and agreed to take alease back on the property for an initial period of 25 years. The parent entity also holds two ten year options. The leaseback transaction is a “triple net lease” with the parent entity being responsible for all outgoings, management and capitalexpenditure/maintenance expenditure for the full period of the lease back periods. The transaction was completed on 12January 2007.

The parent entity has retained the significant risks and rewards of ownership of the property, thus it has treated thetransaction as a financing arrangement. Funds received under the transaction have been disclosed as an interest bearingliability. Payments of “rent” under the leaseback agreement have been treated as interest and principal repayments. Thebuilding will continue to be carried in accordance with the parent entity’s accounting policy for property, plant andequipment.

As at 31 December 2008, the maturity analysis of the finance cost and principal repayments was as follows:


Within one year 2,610 2,530 2,610 2,530Later than one year but not later than five years 11,244 10,900 11,244 10,900Later than five years 70,559 73,655 70,559 73,655Finance cost (43,240) (45,975) (43,240) (45,975)Non-current liability 41,173 41,110 41,173 41,110

Later than one year but not later than five years 1,494 512 1,494 512Later than five years 39,679 40,598 39,679 40,598Present value of loan principal 41,173 41,110 41,173 41,110


30 Borrowings (continued)

(c) Loans from ANZ bank

Following the closure of UNSW Asia in 2007, its loan has been assigned to the parent entity and it was subsequentlyrenegotiated to be repaid on quarterly instalments over 10 years until July 2018. This loan bears interest at Bank Bill SwapBid Rate (BBSY) + 0.25%.

On 1 December 2008, an additional loan of $17,306,000 was secured from the ANZ bank to be repaid quarterly over 10years until December 2018. This loan bears interest at Bank Bill Swap Bid Rate (BBSY) + 1.10%. The proceeds of thisloan was used to repay the Economic Development Board, Singapore (EDB) loan and to pay an instalment due under theEDB grant.

(d) Assets pledged as security

The Group and parent entity had no assets pledged as security in 2008 and 2007.

(e) Financing arrangements

Unrestricted access is available at balance sheet date to the following lines of credit:


Credit standby arrangementsTotal facilities

ANZ Bank - cash advance 54,143 54,143 54,143 54,143ANZ Bank - loan 17,306 - 17,306 -EDB Singapore - loan - 11,805 - 11,805

Total facilities available at balance sheet date 71,449 65,948 71,449 65,948

Facilities utilised at balance sheet dateANZ Bank - cash advance 16,467 16,526 16,467 16,526ANZ Bank - loan 17,306 - 17,306 -EDB Singapore - loan - 11,805 - 11,805

Total facilities utilised at balance sheet date 33,773 28,331 33,773 28,331

(f) Loan from Economic Development Board, Singapore

The Service Capability Development Program loan from the EDB amounting to SGD15,000,000 was drawn down on 31January 2007 by UNSW Asia at fixed interest of 4% per annum. Following the closure of UNSW Asia in 2007, the parententity has entered a settlement agreement with the EDB, the Government of the Republic of Singapore, the JTCCorporation and UNSW Asia on 10 December 2007. The loan was repaid in full on 1 December 2008.

(g) Fair value

The carrying amounts of borrowings at balance sheet date are approximate to their fair value.

(i) On balance sheet

The fair value of current borrowings equals their carrying amount, as the impact of discounting is not significant. The fairvalues of the financing arrangement with Westpac are based on cash flows discounted at 6% interest rate (2007: 6%).

(ii) Contingent liabilities

The parent entity and certain controlled entities have potential financial liabilities which may arise from certaincontingencies disclosed in note 38. As explained in this note, no material losses are anticipated in respect of any of thosecontingencies.






30 Borrowings (continued)

(h) Risk exposures

The exposure of the Group's and parent entity's borrowings to interest rate changes and the contractual repricing dates atthe balance sheet dates are as follows:


6 months or less 1,716 825 1,716 8256 - 12 months 1,717 825 1,717 8251 - 5 years 13,522 6,600 13,522 6,600Over 5 years 16,870 8,629 16,870 8,629Total 33,825 16,879 33,825 16,879

31 ProvisionsConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Current provisions expected to be settled within 12months

Employee benefitsAnnual leave 52,647 52,406 50,885 50,572Long service leave1 15,517 13,771 14,895 13,307Employment on-costs (refer to note 9(b)) 4,642 11,966 4,565 11,397Workers' compensation 755 675 755 675

73,561 78,818 71,100 75,951

Current provisions expected to be settled aftermore than 12 months

Employee benefitsLong service leave1 73,014 63,637 71,135 62,467

Total current provisions 146,575 142,455 142,235 138,418

Non-current provisionsEmployee benefits

Long service leave1 16,047 13,281 15,026 12,510Deferred non-government benefits forsuperannuation 21,926 3,474 21,926 3,474Deferred government benefits for superannuation 765,902 366,784 765,902 366,784Workers' compensation 2,511 2,057 2,511 2,057

Total non-current provisions 806,386 385,596 805,365 384,825

Total provisions 952,961 528,051 947,600 523,243

1The liability for long service leave is recognised as the present value of expected future payments to be made. Keyassumptions used are:

2008%

2007%

General salary inflation 4.00 5.00Promotional wage inflation 1.40 1.20Discount rate 4.03 6.03


32 Current tax liabilitiesConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

Current tax liabilitiesIncome tax - 85 - -

Total current tax liabilities - 85 - -

33 Other liabilitiesConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

CurrentIncome in advance1 70,003 50,733 54,637 39,054Monies held from State Government2 20,556 - 20,556 -Monies held from controlled entities - - 11,523 4,700Monies held from associated parties 3,921 8,577 3,901 8,577Other 9,484 9,950 5,875 5,291EDB Grant3 1,319 917 1,319 917

Total current other liabilities 105,283 70,177 97,811 58,539

Non-currentEDB Grant3 8,565 7,538 8,565 7,538

Total non-current other liabilities 8,565 7,538 8,565 7,538

Total other liabilities 113,848 77,715 106,376 66,077

1This includes research income in advance of $37,197,000 (2007: $31,171,000), DEEWR grants received in 2008 for theCentre for Social Impact of $10,940,000 (2007: nil) and prepaid tuition fees of $5,437,000 (2007: $7,035,000).2This represents monies received from the South East Sydney and Illawarra Area Health Services (SESIAHS) and theNSW Department of Health (the Department) for the capital funding of the Virology Institute Building. Under the CapitalFunding Agreement, the monies will be managed by a legal entity to be established by the parent entity, the Departmentand SESIAHS. The entity had not been set up as at 31 December 2008.3This represents the Service Capability Development Program Grant provided by the Economic Development Board(EDB), Singapore to UNSW Asia in 2006 to support the development of its Singapore campus. Following the closure ofUNSW Asia in 2007, the parent entity entered into a settlement agreement with EDB and all other concerned parties on 10December 2007 to repay the grant (SGD17,439,000) in six instalments over five years starting from 2007 at nil interest. Asat 31 December 2008, the outstanding balance amounted to SGD11,939,000 was recorded at fair value based on thediscounted future contractual cash flows at 7.2% (2007: 7.7%) discounting rate.






34 Statutory funds


Category 1: Australian Competitive Research Gants

ARC GrantsOpening balance at 1 January 24,266 23,163 24,266 23,163Total income 55,002 46,094 55,002 46,094Total expenses (52,209) (44,991) (52,209) (44,991)Closing balance at 31 December 27,059 24,266 27,059 24,266

NHMRC GrantsOpening balance at 1 January 8,668 8,545 8,668 8,545Total income 36,376 29,203 36,376 29,203Total expenses (34,147) (29,080) (34,147) (29,080)Closing balance at 31 December 10,897 8,668 10,897 8,668

Other Commonwealth GrantsOpening balance at 1 January 3,290 1,331 3,290 1,331Total income 2,932 3,702 2,932 3,702Total expenses (4,833) (1,743) (4,833) (1,743)Closing balance at 31 December 1,389 3,290 1,389 3,290

Category 2: Other Public Sector Research Funding

Commonwealth GrantsOpening balance at 1 January 8,692 6,703 8,692 6,703Total income 21,244 14,981 21,244 14,981Total expenses (19,802) (12,992) (19,802) (12,992)Closing balance at 31 December 10,134 8,692 10,134 8,692

State Government GrantsOpening balance at 1 January 9,381 3,946 9,381 3,946Total income 14,558 17,581 14,558 17,581Total expenses (11,313) (12,146) (11,313) (12,146)Closing balance at 31 December 12,626 9,381 12,626 9,381

Total statutory fundsOpening balance at 1 January 54,297 43,688 54,297 43,688Total income 130,112 111,561 130,112 111,561Total expenses (122,304) (100,952) (122,304) (100,952)Closing balance at 31 December 62,105 54,297 62,105 54,297

Statutory Funds are funds granted with certain restrictions or conditions mandated by an Act or subordinate legislation.These conditions mean that these funds may only be utilised for specified expenditure purposes.

Funds held by the Group which have been donated for a specific purposes, whereby drawing down on these funds forother purposes is restricted by an Act or subordinate legislation are included as a Statutory Fund under this note. Thesefunds include all ARC Funding, all NHMRC funding and the majority of Category 2 funding. Any unspent research fundingreceived from an external party for specific purposes, where the purpose is not mandated by statute, is not included.


35 Reserves and retained surplusConsolidated Parent

2008 2007 2008 2007$'000 $'000 $'000 $'000

(a) Reserves

Property, plant and equipment revaluation reserve 348,281 404,565 345,980 402,264Available-for-sale financial assets revaluationreserve 1,477 2,437 - 7,270Foreign currency translation reserve 545 (222) - -Intangible asset revaluation reserve - 425 - 425Total reserves 350,303 407,205 345,980 409,959

Movements:

Property, plant and equipment revaluation reserveOpening balance at 1 January 404,565 193,320 402,264 190,977Revaluation of land (3,932) 13,791 (3,932) 13,791Revaluation of buildings 25,991 134,996 25,991 134,996Revaluation of student accommodation (2,590) 58,417 (2,590) 58,417Revaluation of rare books 596 3,672 596 3,672Revaluation of works of art 231 411 231 411Transfer to retained surplus (76,580) (42) (76,580) -Closing balance at 31 December 348,281 404,565 345,980 402,264

Available-for-sale financial assets revaluation reserveOpening balance at 1 January 2,437 38,904 7,270 37,827Loss on revaluation of available-for-sale financialassets (91,929) (36,339) (75,385) (30,557)Transfer to income statement 90,969 (128) 68,115 -Closing balance at 31 December 1,477 2,437 - 7,270

Foreign currency translation reserveOpening balance at 1 January (222) (144) - -Exchange difference on transaction of foreignoperations 767 (78) - -Closing balance at 31 December 545 (222) - -

Intangible assets revaluation reserveOpening balance at 1 January 425 - 425 -Revaluation of licence - 425 - 425Transfer to retained surplus (425) - (425) -Closing balance at 31 December - 425 - 425

(b) Retained surplus


Opening balance at 1 January 938,490 955,539 837,725 859,557Operating result for the period (87,339) (6,482) (77,883) (11,223)Less: amount set aside for statutory funds (7,808) (10,609) (7,808) (10,609)Transfer from reserves 77,005 42 77,005 -Closing balance at 31 December 920,348 938,490 829,039 837,725






35 Reserves and retained surplus (continued)(c) Nature and purpose of reserves

(i) Property, plant and equipment revaluation reserveThe property, plant and equipment revaluation reserve is used to record increments and decrements on the revaluation ofnon-current assets, as described in note 1(q).

(ii) Available-for-sale investments revaluation reserveChanges in the fair value and exchange differences arising on translation of investments, such as equities, classified asavailable-for-sale financial assets, are taken to the available-for-sale investments revaluation reserve, as described innote 1(o). Amounts are recognised in income statement when the associated assets are sold or impaired.

(iii) Foreign currency translation reserveExchange differences arising on translation of the foreign controlled entities are taken to the foreign currency translationreserve, as described in note 1(f). The reserve is recognised in income statement when the net investment is disposed of.

(iv) Intangible asset revaluation reserveThe intangible asset revaluation reserve is used to record increments and decrements on the revaluation of intangibleassets.


36 Key management personnel disclosures

(a) Names of responsible persons and executive officers

The following persons were responsible persons and executive officers of the parent entity during the financial year:

(i) Official Council MembersMr David Michael Gonski, AC, ChancellorProfessor Fred Hilmer, AO, Vice Chancellor and PresidentProfessor Janet Chan (from 1 August 2008)Professor Anthony Hayes Dooley (until 31 July 2008)

(ii) Ministerial AppointmentsMr Warwick NegusMr Paul Ronald Pearce, MPThe Honourable Susan Maree Ryan, AO, Pro ChancellorMr Matthew GroundsMr Wallace King, AOMs Jillian Shirley Segal, AM, Pro Chancellor

(iii) Elected Council MembersMr Geoffery Francis Lawson, OAMMs Gabrielle Cecelia Upton, Deputy Chancellor and Pro ChancellorDr Christine Clifton, Pro ChancellorDr Jennifer Alexander (from 1 July 2008)Professor Paul Compton (from 1 July 2008)Professor Anthony Hayes Dooley (from 1 July 2008)Mr Samuel Thorp (from 1 July 2008)Ms Robyn Goodwin (from 1 July 2008)Associate Professor Shirley Scott (from 5 December 2008)Professor Joseph Albert WolfeMs Jennifer TillProfessor Bruce Milthorpe (from 1 July 2008)

(iv) Council Appointed MembersMr Terry DavisMr Brian Long (from 2 August 2008)

(v) Council Members resigned from office on 30 June 2008, except as otherwise notedScientia Professor Mark BradfordProfessor Wai Fong ChuaProfessor Brien Anthony Holden, OAMMr Darren George ChallisMr Brian Edward SuttorMs Kirstin Anne Hunter Ms Angela Mary BarrettProfessor Bruce Milthorpe (resigned 31 October 2008)

(b) Other key management personnel

The following persons also had authority and responsibility for planning, directing and controlling the activities of theGroup, directly or indirectly, during the financial year:

Name Position

Professor Les Field Deputy Vice Chancellor (Research) Professor Richard Henry, AM Deputy Vice Chancellor (Academic)Mr Garry McLennan Chief Financial Officer (to 12 September 2008)Mr Peter Graham Chief Operating Officer (to 10 October 2008)Ms Jennifer Bott Executive Committee MemberMr Stephen Rees Acting Chief Financial Officer (from 15 September 2008)Mr Neil Morris Acting Chief Operating Officer (from 15 September 2008)






36 Key management personnel disclosures (continued)

(c) Remuneration of Board Members and Executives


Number Number

Remuneration of Board MembersNil to $9,999 65 71 19 16$10,000 to $19,999 4 4 - -$20,000 to $29,999 - 2 - -$70,000 to $79,999 2 1 2 1$100,000 to $ 109,999 - 1 - 1$130,000 to $139,999 1 - 1 -$150,000 to $159,999 - 2 - 1$160,000 to $169,999 1 - 1 -$210,000 to $219,999 1 - 1 -$220,000 to $229,999 2 1 1 1$230,000 to $239,999 1 - 1 -$340,000 to $349,999 - 1 - 1$350,000 to $359,999 1 1 1 1$380,000 to $389,999 1 - 1 -$680,000 to $689,999 - 1 - 1$790,000 to $799,999 1 - 1 -$1,420,000 to $1,429,999 - 1 - -Total 80 86 29 23

Council Members include the Group's employees who may be ex-officio Members or elected staff Members. No councilmember has received any remuneration in his/her capacity as a council member.

Council Members may also be executive officers of the parent entity. Where this is the case they have been included inthe remuneration above but excluded from the remuneration band of the executive officers overleaf.

There were ten council members (2007: seven) who received remuneration as employees of the parent entity.


36 Key management personnel disclosures (continued)Consolidated Parent

2008 2007 2008 2007Number Number

Remuneration of executive officersNil to $9,999 1 - - -$30,000 to $39,999 - 1 - -$70,000 to $79,999 - 1 - -$80,000 to $89,999 - 1 - -$100,000 to $109,999 - 1 - -$130,000 to $139,999 1 - - -$140,000 to $149,999 - 4 - -$150,000 to $159,999 1 1 - -$160,000 to $169,999 1 4 - -$170,000 to $179,999 - 2 - -$180,000 to $189,999 3 2 - -$190,000 to $199,999 1 1 - -$200,000 to $209,999 3 1 - -$210,000 to $219,999 1 1 - -$230,000 to $239,999 - 2 - -$240,000 to $249,999 1 2 1 -$250,000 to $259,999 - 1 - 1$270,000 to $279,999 1 - - -$280,000 to $289,999 1 - 1 -$300,000 to $309,999 1 - - -$310,000 to $319,999 1 - 1 -$320,000 to $329,999 - 1 - -$340,000 to $349,999 - 1 - -$350,000 to $359,999 1 - - -$380,000 to $389,999 1 - 1 -$400,000 to $409,999 - 2 - 2$440,000 to $449,999 2 1 2 1$460,000 to $469,999 - 1 - 1$510,000 to $519,999 1 - - -$540,000 to $549,999 - 1 - -$690,000 to $699,999 1 - 1 -Total 23 32 7 5

During 2008 five (2007: eight) executive officers resigned from office and received aggregate entitlements of $1,004,000(2007: $1,472,000) in addition to salary and any superannuation benefits that were received during the year.

(d) Key management personnel compensation


Short-term employee benefits 7,631 8,667 4,500 3,481Post-employment benefits 637 691 576 426Termination benefits 1,004 1,472 402 -Total 9,272 10,830 5,478 3,907






37 Remuneration of auditorsDuring the year the following fees were paid for services provided by the auditor of the parent entity, its related practicesand non related audit firms:


(a) Audit services

Fees paid to the Audit Office of NSW:Audit and review of financial reports and other auditwork under the Corporations Act 2001 1,452 1,047 888 673

Fees paid to KPMG:Audit and review of financial reports of overseasentities 255 93 79 -

Total fees paid for audit services 1,707 1,140 967 673

(b) Non-audit services

Taxation services

Fees paid to KPMG:Tax compliance services for overseas entities 51 34 - -

Total fees paid for taxation services 51 34 - -

Other services

Fees paid to KPMG:Advisory services 190 64 190 72

Total fees paid for other services 190 64 190 72

Total fees paid to auditors 1,948 1,238 1,157 745

38 Contingencies

(a) Contingent liabilities

ClaimsThe Group and the parent entity have no material legal claims outstanding as at 31 December 2008.

GuaranteesThe parent entity has a bank guarantee of $650,000 issued by ANZ Banking Group in favour of Harina Company Limitedfor the lease premises of 1 O'Connell Street.

UNSW Global Pty Ltd has a bank guarantee of $583,000 issued by ANZ Banking Group as a rental bond in relation tostudent accommodation at 159 - 171 Anzac Parade, Kensington and this will expire on 13 June 2020.

The parent entity is a licenced self insurer for workers compensation in New South Wales (NSW) and the AustralianCapital Territory (ACT). In NSW the licence is issued under Division 5 of Part 7 of the Workers Compensation Act 1987and under Chapter 8, Part 8.1 of the Workers Compensation Act 1951. In accordance with both licences the Group hasthe following bank guarantees:

(i) $3,680,000 with the ANZ Banking Group in favour of WorkCover New South Wales,(ii) $750,000 with the ANZ Banking Group in favour of the Default Insurance Fund.


38 Contingencies (continued)Research CollaborationThe parent entity has a contingent liability for contributions to the amount up to SGD2,000,000 or 20% of the total researchcost, whichever is lower. It arises from the research collaboration agreement with the EDB, refer to the contingent assetsnote.

(b) Contingent assets

On 10 December 2007, the parent entity signed an agreement with the Singapore Economic Development Board (EDB), inwhich the EDB in partnership with the National Research Foundation (NRF), the Environment and Water IndustryDevelopment Council and the NRF Clean Energy Program Office will provide PhD scholarship support to the parent entityfor an amount up to SGD2,000,000 over 5 years commencing on 1 January 2008, subject to the parent entity meeting theappropriate conditions stipulated in the agreement.

The EDB will also provide an aggregate of research collaboration grants for an amount up to the lower of SGD4,000,000or 40% of the total research cost, over the term of the agreement, subject to the parent entity meeting particularconditions. This grant is recoverable if the milestones set out in the funding agreement have not been met by the end ofthe fifth year of the final collaboration.

39 Commitments

(a) Capital commitments

Capital expenditure contracted for at the balance sheet date but not recognised as liabilities are as follows:


Property, plant and equipmentWithin one year1 75,586 68,281 75,161 68,281Later than one year but not later than five years - 46,195 - 46,195

75,586 114,476 75,161 114,476

1The Children’s Cancer Institute Australia for Medical Research (CCIA) will make a contribution to the parent entity of$35,000,000 towards the building costs of the Lowy Cancer Research facility on the practical completion of the building,expected before 31 December 2009, which will reduce the capital commitments shown above.

(b) Lease commitments

Commitments for minimum lease payments in relation to non-cancellable operating leases which are not recognised in thefinancial statements are as follows:


Within one year 8,143 7,870 3,346 3,201Later than one year but not later than five years 25,846 26,362 7,312 7,710Later than five years 26,478 32,295 1,751 3,008

60,467 66,527 12,409 13,919






39 Commitments (continued)

(c) Other commitments

Expenditure commitments at the balance sheet date are as follows:


Within one year 30,301 34,704 30,114 34,249Later than one year and not later than five years 28,962 45,161 28,756 43,490Later than five years 1,030 830 1,030 830

60,293 80,695 59,900 78,569

Total commitments 196,346 261,698 147,470 206,964

Applicable GST payable on total commitments 14,733 19,653 9,845 14,183


40 SubsidiariesThe consolidated financial statements incorporate the assets, liabilities and results of the following controlled entities inaccordance with the accounting policy described in note 1(b):

Name of entity Country ofincorporation

Class of shares 2008%

2007%

AGSM Ltd Australia Limited by guarantee 100.00 100.00A.C.N 125 694 546 Pty Ltd Australia Ordinary 100.00 100.00University of New South Wales International House Ltd Australia Limited by guarantee 100.00 100.00University of New South Wales Press Ltd Australia Limited by guarantee 100.00 100.00NewSouth Innovations Pty Limited Australia Ordinary 100.00 100.00

- NewSouth One Pty Limited Australia Ordinary 100.00 100.00- Audio Nomad Pty Limited Australia Ordinary 100.00 100.00- NewSouth Four Pty Ltd Australia Ordinary 100.00 100.00- NewSouth Five Pty Ltd Australia Ordinary 100.00 100.00- NewSouth Six Pty Ltd Australia Ordinary 100.00 100.00- NewSouth Seven Pty Ltd Australia Ordinary 100.00 100.00- NewSouth Eight Pty Ltd Australia Ordinary 100.00 100.00- Cystemix Pty Ltd Australia Ordinary 100.00 100.00

Acyte Biotech Pty Ltd1 Australia Ordinary 43.01 68.00Qucor Pty Limited2 Australia Ordinary 60.00 60.00HepatoCell Therapeutics Pty Ltd3 Australia Ordinary 66.67 66.67UNSW Global Pty Ltd4 Australia Ordinary 100.00 100.00

- UNSW Global (Singapore) Pte Limited5 Singapore Ordinary 100.00 100.00- UNSW (Hong Kong) Ltd Hong Kong Ordinary 99.99 99.99- UNSW Asia School Ltd6 Singapore Ordinary 100.00 100.00- UNSW Global India Pvt Limited7 India Ordinary 100.00 100.00- NewSouth Global (Thailand) Ltd8 Thailand Ordinary 48.75 48.75- UNSW (Thailand) Ltd9 Thailand Ordinary 73.86 73.86- Australian Education Consultancy Ltd Hong Kong Ordinary 100.00 100.00

UNSW Asia10 Singapore Ordinary 100.00 100.00- UNSW Asia Foundation Limited11 Singapore Ordinary - 100.00

The University of New South Wales Foundation Ltd Australia Limited by guarantee 100.00 100.00- as Trustee for the University of New South WalesFoundation- as Trustee for the New South Wales MineralsIndustry / University of New South Wales EducationTrust- as Trustee to the John Lewis and Pamela LightfootTrust

UNSW Hong Kong Foundation Limited Hong Kong Limited by guarantee 100.00 100.00UNSW & Study Abroad - Friends and U.S. Alumni, Inc USA Not applicable 100.00 100.00

1 Ownership split: 13.18% UNSW, 29.83% NewSouth Innovations Pty Ltd, 43.01% UniQuest Pty Limited, 13.98% held by NewSouthInnovations Pty Ltd for the benefit of the Researcher. On 28 November 2008, due to an issue of shares by the company to UniquestPty Ltd, UNSW's equity interest reduced to 43.01%. Consequently, UNSW lost control but still significantly influenced the entity atbalance sheet date. Included in investments accounted for using the equity method, refer to note 22.

2 Ownership split: 30% UNSW, 30% NewSouth Innovations Pty Ltd, 40% held for the benefit of the Researchers.3 Ownership split: 33.33% NewSouth Innovations Pty Ltd as trustee for UNSW, 33.33% NewSouth Innovations Pty Ltd, 33.33%

NewSouth Innovations Pty Ltd as trustee for Original Researcher.4 Formerly NewSouth Global Pty Ltd.5 Formerly UNSW (Singapore) Pte Ltd.6 UNSW Asia School Ltd is currently in the process of voluntary liquidation.7 Formerly NewSouth Global India Pvt Limited.8 Ownership split: 48.75% UNSW Global Pty Ltd, remaining shareholding is held by alumni. Despite UNSW's equity interest being lower

than 50.00%, UNSW has control over the management decision making capacity of the company at balance sheet date.9 Ownership split: 49% UNSW Global Pty Ltd, 51% NewSouth Global (Thailand) Ltd.10 Formerly UNSW Asia Limited. The company is currently in the process of voluntary liquidation.11 The Company was dissolved on 19 November 2008.






41 Joint venture operationsThe Group has interests in the following joint ventures in the same proportion as the total economic entity contributionbears to the total agreement contribution of all venturers.

Contributions in cash and in kind are expensed and included in the income statement. The Group's interest % representsthe Group's share of contributions and is not included in the balance sheet. Contributions are for the year to 30 June 2008.In the event that a CRC's research results in a move to commercialisation a separate legal entity is established and theGroup's share of the new entity is treated as an available-for-sale financial asset, joint venture, associated or controlledentity as appropriate.

Name and principal activityInterest

heldInterest

heldContribution Contribution

2008 2007 2008 2007% % $'000 $'000

Bushfire CRC: The Bushfire CRC is conducting a range of research projects thatcollectively aim to enhance the management of the bushfire risk tothe community in an economically and ecologically sustainableway. 1.01 1.04 1,096 757Capital Markets CRC: The Capital Markets CRC strategy is to target its research tocurrent and future challenges faced by the Capital Markets. 34.00 34.00 343 928Cotton Catchment Communities CRC: The Cotton Catchment Communities CRC’s mission is to undertakecollaborative research, education and commercialisation activitiesto provide innovative knowledge that is adopted for the benefit ofthe Australian Cotton Industry, Regional Communities and theNation. 3.00 2.00 689 422CRC for Advanced Composite Structures: The primary aim of the CRC for Advanced Composite StructuresLimited is to provide a focus for the development of advancedtechnologies which foster the growth of an efficient, globallycompetitive Australian composite industry. 11.10 11.10 1,141 859CRC for Coal in Sustainable Development: The CRC for Coal in Sustainable Development is devoted tostrengthening collaborative links between industry, researchorganisations and government agencies to achieve real outcomesof national, economic and social significance. The CRC closed on30 June 2008. 6.80 6.80 263 332CRC for Environmental Biotechnology: The vision of the Environmental Biotechnology CooperativeResearch Centre is to establish environmental biotechnology as amainstream sector in the biotechnology industry using naturalbioprocesses to benefit industry and the environment. 22.22 20.30 1,773 1,127CRC for Greenhouse Gas Technology (CO2CRC): CRC for Greenhouse Gas Technology is focusing its efforts on thedevelopment and application of technologies to more effectivelycapture and geologically store carbon dioxide, and is nowacknowledged as one of the world's leading centres in the study ofcarbon dioxide capture and storage. 3.10 2.80 578 508CRC for Polymers: The CRC for Polymers conducts leading edge polymer research todeliver the technically advanced polymeric materials and polymerengineering required to transform Australian industries and toestablish and expand companies in emerging high growth areas ofthe economy. 4.07 3.66 774 653CRC for Spatial Information: The CRC for Spatial Information (CRCSI) will undertake world classresearch leading to new applications of spatial information andenabling technologies which will be used to generate new wealth forthe partners of the CRCSI. 8.76 9.10 1,186 1,594


41 Joint venture operations (continued)

Name and principal activityInterest

heldInterest

heldContribution Contribution

2008 2007 2008 2007$'000 $'000

CRC for Water Quality and Treatment: The CRC for Water Quality and Treatment aims to provide theknowledge base to achieve better, evidence based investmentdecisions by government; a regulatory framework that is soundlybased on high quality health risk assessment research; a high levelof community confidence in the safety of public water supplysystems; and enhanced aesthetic quality that meets communityexpectations and the requirements of the tourism industry. 4.22 4.62 292 563CRC Smart Internet Technologies: The CRC for Smart Internet Technology will combine research inArtificial Intelligence, Social Interaction and Network Developmentto create enabling technologies for smart internet applications thatwill allow users and network providers to manage the complexity ofthe internet. 17.70 14.90 363 924Sustainable Tourism CRC: The Sustainable Tourism CRC aims to provide global leadership instrategic R&D to improve the sustainability of the tourism industry tomaximise the economic, environmental and social benefits itdelivers to Australia. 5.50 4.45 1,303 1,567Australian Poultry CRC: The aim of the Australian Poultry CRC is to enhance thecompetitiveness of the Australian egg and chicken meat industriesand supporting industries through the application of strategicprograms delivering cost effective and socially responsibleproduction of safe, quality products for domestic use. - - 82 141Advanced Manufacturing CRC: The Advanced Manufacturing CRC will develop next generationtechnology platforms across major industry sectors in Australia. Theresearch will benefit businesses from enhanced quality andreliability, and a reduction in the cost of developing andmanufacturing products. Commenced in May 2008. - - - -Smart Services CRC: The Smart Services CRC is a commercially focused collaborativeresearch initiative, developing innovation, foresight and productivityimprovements for the services sector. Initial research outcomes anddemonstrators will principally be associated with the digital media,finance and government sectors (including the health sector) todevelop exciting new capabilities and demonstrate the breadth ofthe applicability of the work. Commenced in July 2007. 6.70 - 312 -Total cash and in-kind contributions 10,195 10,375






42 Events occurring after the balance sheet dateThere were no matters subsequent to the end of the financial year that require disclosure.

43 Reconciliation of operating result after income tax to net cash flows from operatingactivities


Operating result for the period (87,339) (6,482) (77,883) (11,223)Depreciation and amortisation 85,217 45,215 83,557 43,439Write down of investments to recoverable amount 90,969 1,993 68,115 3,390Write down of property, plant and equipment andintangible assets 2,027 1,533 588 26Net (gains)/losses on disposal of property, plant andequipment (9,607) 2,373 (9,799) 2,495Foreign exchange losses on borrowings 3,466 - 3,466 -Net losses/(gains) on sale of investments 348 1,637 348 (10,762)UNSW Asia's liabilities and closure costs - - - 45,083Non-cash dividends from related parties (note 30(a)) - - (8,000) -Licence fees (non-cash) (1,920) - - -Other non-cash items 83 (78) 577 -

83,244 46,191 60,969 72,448

Change in operating assets and liabilities(Increase)/decrease in sundry and student debtors (10,249) 26,793 (11,772) 17,711(Increase)/decrease in accrued interest receivables (1,798) 3,101 (1,947) 3,159(Increase) in accrued income (3,248) (6,862) (3,469) (7,514)(Increase)/decrease in inventories 69 (118) - -Decrease in sundry advances 138 333 96 3,546(Increase)/decrease in payments in advance (4,412) 42 (4,081) 314(Increase)/decrease in deferred superannuation 43,703 50,959 43,703 50,959(Increase)/decrease in other assets 701 40 53 (12)Increase/(decrease) in trade and other payables 2,655 (6,516) 2,744 4,230Increase in income in advance 19,270 15,215 15,583 16,780Increase/(decrease) in other liabilities 18,136 (565) 26,225 277Increase/(decrease) in provisions 7,012 (40,134) 6,787 (43,606)

71,977 42,288 73,922 45,844

Net cash flow provided by operating activities 155,221 88,479 134,891 118,292


44 Financial risk managementThe Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk, cashflow and fair value interest rate risk), credit risk and liquidity risk. The Group's overall risk management programmefocuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financialperformance of the Group.

Risk management is carried out by the UNSW Investment and Treasury Services (UNSW Treasury) under the UNSWTreasury Risk Management guidelines. These guidelines cover specific areas, such as foreign exchange risk, interest raterisk, credit risk, liquidity risk, use of derivative and non-derivative financial instruments, and investment of excess liquidity.

The Group uses different methods to measure different types of risk to which it is exposed at the reporting date. Thesemethods include sensitivity analyses in the case of foreign exchange, price and interest rate risks; and ageing analysis forcredit risk.

The Group does not speculatively trade in derivative instruments.

(a) Market risk

(i) Foreign exchange riskForeign exchange risk refers to the risk that the value of a financial commitment, recognised asset or liability will fluctuatedue to changes in foreign currency rates.

The Group and the parent entity operate internationally and are exposed to foreign exchange risk arising from futurecommercial transactions and recognised assets and liabilities, primarily from borrowings that are denominated inSingapore dollar and receivables that are denominated in US dollar. The foreign exchange risk is minimised by initiallyseeking transactions effectively denominated in Australian dollar where possible and economically favourable to do so.The risk is measured using sensitivity analysis.

Management requires group companies to manage their foreign exchange risk against their functional currency. Thefinancial instruments used for foreign exchange risk management are cross currency interest rate swaps (CCIRS) andforward foreign exchange contracts. The group companies are required to fully hedge the foreign risk exposure arisingfrom foreign currency denominated borrowings. Any exception to this is approved by the Vice Chancellor. Economic andtranslation exposures are not hedged unless approved by the CFO of UNSW.

The Group and the parent entity were exposed to foreign exchange risk in relation to the repayment of the grant providedby the Economic Development Board (EDB) to UNSW Asia. As at 31 December 2008, the contractual undiscounted grantwas $12,145,000, (2007: $10,969,000).

The sensitivity analysis shows the effect on the post-tax operating result and equity as at balance sheet date had theAustralian dollar weakened/strengthened by 10% against Singapore dollar and the US dollar at that date with all othervariables held constant. A sensitivity of 10% was selected as it was considered reasonable given the current level ofexchange rate and the volatility observed both on an historical basis and market expectations for future movement.

As at 31 December 2008, the Australian dollar exchange rate against Singapore dollar was 0.9830 (2007: 1.2707). Hadthe Australian dollar weakened by 10% against the Singapore dollar to 0.8847 (2007: 1.1436), the post-tax operating resultfor the year and equity of the Group and the parent entity would have been $769,000 and $1,189,000 lower, respectively(2007: $2,602,000 and $2,683,000 lower, respectively). Had the Australian dollar strengthened by 10% against theSingapore dollar to 1.0813 (2007: 1.3978), the post-tax operating result for the year and equity of the Group and theparent entity would have been $629,000 and $973,000 higher, respectively (2007: $2,129,000 lower and $2,195,000higher, respectively). This was mainly as a result of foreign exchange gains/losses on translation of Singapore dollardenominated borrowings.

As at 31 December 2008, the Australian dollar exchange rate against US dollar was 0.6848 (2007: 0.8672). Had theAustralian dollar weakened by 10% against the US dollar to 0.6163 (2007: 0.7805), the post-tax operating result for theyear and equity of the Group and the parent entity would have been $38,000 higher and $3,000 lower, respectively (2007:$153,000 and $153,000 higher, respectively). Had the Australian dollar strengthened by 10% against the US dollar to0.7533 (2007: 0.9539), the post-tax operating result and equity of the Group and the parent entity would have been$31,000 lower and $2,000 higher, respectively (2007: $125,000 and $125,000 lower, respectively). This was mainly as aresult of foreign exchange gains/losses on translation of US dollar denominated receivables and trade payables.






44 Financial risk management (continued)The carrying amounts of the Group’s and the parent entity's financial instruments that are exposed to foreign currency riskare primarily denominated in US dollar and Singapore dollar, as set out below:

2008A$'000

2007A$'000

USD SGD USD SGDConsolidated

Financial assetsCash at bank and on hand 1,201 3,823 189 2,019Sundry debtors 1,127 45 1,526 69

Financial liabilities Sundry creditors 1,989 28 271 390Accruals - 874 - 2,743EDB loan - - - 11,805EDB grant - 9,884 - 8,455Parent

Financial assetsCash at bank and on hand 882 - 189 -Sundry debtors 1,081 - 1,458 -

Financial liabilities Sundry creditors 1,989 28 271 390Accruals - 786 - 984EDB loan - - - 11,805EDB grant - 9,884 - 8,455

(ii) Price riskPrice risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because ofchanges in market prices (other than those arising from interest rate risk or foreign exchange risk), whether those changesare caused by factors specific to the individual financial instruments or its issuer, or factors affecting all similar financialinstruments traded in the market.

The Group and the parent entity are exposed to securities price risk arising from investments held by and classified on thebalance sheet as available-for-sale. Neither the Group nor the parent entity is exposed to commodity price risk.

The Group maintains three investment portfolios, with a variety of objectives. The short-term portfolio performs the role ofa working capital fund, and is used as a liquidity buffer to manage the variable timing of revenue and expenditure flows.This portfolio is a short duration low risk portfolio of fixed and floating rate securities. Although the long-term portfolioconsists of investments which are readily convertible to cash, it represents the Group's asset reserves and has a longinvestment time horizon. The portfolio is tilted towards growth assets and has invested in unit trusts managed by externalinvestment management firms. The Project's portfolio essentially comprises strategic property investments acquired overtime to increase the Group's real estate footprint against the need for future expansion of the Kensington campus.

The Group maintains an investment policy document which, inter alia, sets out the risk parameters for the portfolios. Thekey risk parameters for the short term portfolios involve a maximum modified portfolio duration, which limits the capitalimpact of any rise in interest rates and a set of portfolio credit limits. The key risk parameters for the long term portfoliosare the fund's strategic asset allocation (60% growth assets, 40% income assets). The fund does not engage in tacticalasset allocation. The portfolio is rebalanced when certain thresholds are triggered.

Although the external fund managers routinely use derivative instruments in the management of the unit trusts in which theGroup has an interest, the Group's Investment and Treasury Services is precluded from using derivatives in themanagement of the portfolios.

The Investment and Treasury Services report to the Finance Committee for all short term portfolio transactions on abimonthly basis. It also reports twice yearly on the long term and project pools.


44 Financial risk management (continued)The Investment Sub Committee of the Finance Committee meets quarterly to review the long term portfolio performance,fund manager selection, asset allocation, and other high level investment policy issues (e.g. the choice of benchmarks andobjectives of the investment portfolios), and to make recommendations on any proposed changes to the InvestmentPolicy.

The majority of the Group’s and the parent entity’s available-for-sale financial assets are marketable equity securities (heldthrough managed funds). If equity prices as at 31 December 2008 had increased/decreased by 10% with all other variableheld constant, this would have increased/decreased the Group’s and the parent entity’s equity by $30,081,000 (2007:$35,081,000) and $22,919,000 (2007: $27,742,000), respectively.

A sensitivity of 10% is based on reasonably possible changes, over a financial year, determined using the observed rangeof actual historical price data over the past years.

(iii) Cash flow and fair value interest rate riskInterest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument willfluctuate due to changes in market interest rates.

The Group’s and the parent entity’s main interest rate risk arises from cash and cash equivalents, held-to-maturityinvestment and interest-bearing borrowings. Financial instruments issued at variable rates give exposure to cash flowinterest rate risk. Financial instruments issued at fixed rates give exposure to fair value interest rate risk.

During 2007, UNSW Asia was exposed to interest rate risk arising from interest-bearing borrowing from the EDB and ANZ.The Service Capability Development Program loan from the EDB amounting to SGD15,000,000 was drawn down on 31January 2007 at fixed interest of 4% per annum. The amount of $17,520,000 was drawn down from the ANZ loan facilitiesin 2006 with an interest at Bank Bill Swap Bid Rate (BBSY) + 0.15% per annum.

Following the closure of UNSW Asia in December 2007, these borrowings have been assigned to the parent entity andhad been renegotiated. The parent entity entered into a settlement agreement with the EDB on 10 December 2007 andrepaid the loan in full on 1 December 2008, at nil interest (refer to note 30(f)). The loan with ANZ is to be repaid on aquarterly basis over 10 years and bears interest at Bank Bill Swap Bid Rate (BBSY) + 0.25% per annum (refer to note 30(c)).

A sensitivity of 50 basis points was selected as this was considered reasonable given the current level of both short termand long term Australian dollar interest rates. At 31 December 2008, if interest rates had changed by -/+ 50 basis pointwith all other variables held constant, post-tax operating profit for the year and equity for the Group and the parent entitywould have been $110,000 lower/higher (2007: $126,000 lower/higher) and $74,000 higher/lower (2007: $34,000 higher/lower), respectively. This was mainly as a result of lower/higher interest income from cash and cash equivalentsand lower/higher interest expense from borrowings.






44 Financial risk management (continued)(iv) Summarised sensitivity analysis The following table summarises the sensitivity of the Group’s and the parent entity’s financial assets and financial liabilitiesto foreign exchange risk, other price risk and interest rate risk.

Foreign exchange risk Other price risk Interest rate risk-10% +10% -10% +10% -0.5% +0.5%

Consolidated Carryingamount Profit Equity Profit Equity Profit Equity Profit Equity Profit Equity Profit Equity$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

31 December 2008

Financial assetsCash and cashequivalents 73,149 558 558 (457) (457) - - - - (366) (366) 366 366Deposit at call andinvestments originallymaturing within threemonths 3,178 - - - - - - - - (16) (16) 16 16Sundry debtors 40,752 130 130 (106) (106) - - - - - - - -Unlisteddomestic/internationalfixed interest 148,272 - - - - - (14,827) - 14,827 - - - -Listed domesticequities 101,485 - - - - - (10,149) - 10,149 - - - -Listed internationalequities 50,078 - - - - - (5,008) - 5,008 - - - -Listed equities 310 - - - - - (31) - 31 - - - -Unlisted equities 3,032 - - - - - (303) - 303 - - - -Other (unit trusts) 1,547 - - - - - (155) - 155 - - - -

Financial liabilitiesSundry creditors 37,019 (224) (224) 183 183 - - - - - - - -Accrued expenses 10,150 (97) (97) 80 80 - - - - - - - -Monies held from Stategovernment 20,556 - - - - - - - - 103 103 (103) (103)Monies held fromassociated parties 3,921 - - - - - 392 - (392) - - - -ANZ bank loan 33,825 - - - - - - - - 169 169 (169) (169)EDB grant 9,884 (1,099) (1,099) 899 899 - - - - - - - -Total increase/(decrease) (732) (732) 599 599 - (30,081) - 30,081 (110) (110) 110 110

31 December 2007

Financial assetsCash at bank and onhand 39,141 245 245 (201) (201) - - - - (196) (196) 196 196Deposit at call andinvestments originallymaturing within threemonths 2,709 - - - - - - - - (14) (14) 14 14Sundry debtors 35,416 214 214 (175) (175) - - - - - - - -Unlisteddomestic/internationalfixed interest 181,423 - - - - - (18,142) - 18,142 - - - -Listed domesticequities 116,417 - - - - - (11,642) - 11,642 - - - -Listed internationalequities 57,625 - - - - - (5,763) - 5,763 - - - -Listed equities 3,690 - - - - - (369) - 369 - - - -Other (unit trusts) 229 - - - - - (23) - 23 - - - -

Financial liabilitiesSundry creditors 31,859 (73) (73) 60 60 - - - - - - - -Accrued expenses 17,363 (305) (305) 249 249 - - - - - - - -Monies held fromassociated parties 8,577 - - - - - 858 - (858) - - - -ANZ bank loan 16,879 - - - - - - - - 84 84 (84) (84)EDB loan 11,805 (1,312) (1,312) 1,073 1,073 - - - - - - - -EDB grant 8,455 (1,219) (1,219) 997 997 - - - - - - - -Total increase/(decrease) (2,450) (2,450) 2,003 2,003 - (35,081) - 35,081 (126) (126) 126 126


44 Financial risk management (continued)Foreign exchange risk Other price risk Interest rate risk

-10% +10% -10% +10% -0.5% +0.5%Parent Carrying

amount Profit Equity Profit Equity Profit Equity Profit Equity Profit Equity Profit Equity$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

31 December 2008

Financial assetsCash at bank and onhand 41,912 97 97 (80) (80) - - - - (210) (210) 210 210Sundry debtors 37,948 120 120 (98) (98) - - - - - - - -Unlisteddomestic/internationalfixed interest 93,433 - - - - - (9,343) - 9,343 - - - -Listed domesticequities 100,185 - - - - - (10,019) - 10,019 - - - -Listed internationalequities 49,312 - - - - - (4,931) - 4,931 - - - -Listed equities 128 - - - - - (13) - 13 - - - -Other (unit trusts) 1,547 - - - - - (155) - 155 - - - -

Financial liabilitiesSundry creditors 39,264 (224) (224) 183 183 - - - - - - - -Accrued expenses 5,376 (87) (87) 71 71 - - - - - - - -Monies held from Stategovernment 20,556 - - - - - - - - 103 103 (103) (103)Monies held fromcontrolled entities 11,523 - - - - - 1,152 - (1,152) - - - -Monies held fromassociated parties 3,901 - - - - - 390 - (390) - - - -Loan from relatedparties 2,368 - - - - - - - - 12 12 (12) (12)ANZ bank loan 33,825 - - - - - - - - 169 169 (169) (169)EDB grant 9,884 (1,099) (1,099) 899 899 - - - - - - - -Totalincrease/(decrease) (1,193) (1,193) 975 975 - (22,919) - 22,919 74 74 (74) (74)

31 December 2007

Financial assetsCash at bank and onhand 19,206 21 21 (17) (17) - - - - (95) (95) 95 95Sundry debtors 31,053 162 162 (133) (133) - - - - - - - -Unlisteddomestic/internationalfixed interest 117,597 - - - - - (11,760) - 11,760 - - - -Listed domesticequities 114,428 - - - - - (11,443) - 11,443 - - - -Listed internationalequities 56,396 - - - - - (5,640) - 5,640 - - - -Listed equities 2,036 - - - - - (204) - 204 - - - -Other (unit trusts) 229 - - - - - (23) - 23 - - - -

Financial liabilitiesSundry creditors 34,467 (73) (73) 60 60 - - - - - - - -Accrued expenses 9,979 (109) (109) 89 89 - - - - - - - -Monies held fromcontrolled entities 4,700 - - - - - 470 - (470) - - - -Monies held fromassociated parties 8,577 - - - - - 858 - (858) - - - -Loan from relatedparties 9,791 - - - - - - - - 45 45 (45) (45)ANZ bank loan 16,879 - - - - - - - - 84 84 (84) (84)EDB loan 11,805 (1,312) (1,312) 1,073 1,073 - - - - - - - -EDB grant 8,455 (1,219) (1,219) 997 997 - - - - - - - -Totalincrease/(decrease) (2,530) (2,530) 2,069 2,069 - (27,742) - 27,742 34 34 (34) (34)






44 Financial risk management (continued)

(b) Credit risk

Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument and cause afinancial loss for the other party.

The Group and the parent entity are exposed to credit risk arising from cash and cash equivalents and deposits with banksand financial institutions, as well as credit exposures to customers, including outstanding receivables and committedtransactions, investments held and classified as available-for-sale and investments in various companies and ventures. Ifthere is no independent rating, risk control assesses the credit quality of the customer, taking into account its financialposition, past experience and other factors.

The carrying amounts of financial assets recognised in the balance sheet are disclosed in more details in notes 18, 19 and23 best represents the consolidated entity’s maximum exposure to credit risk at the reporting date. In respect to thosefinancial assets and credit risk embodied within them, the consolidated entity holds no significant collateral as security andthere are no other significant credit enhancements in respect of these assets. The credit quality of all financial assets thatare neither past due nor impaired is appropriate and is consistently monitored in order to identify any potential adversechanges in the credit quality. There are no significant financial assets that have had renegotiated terms that wouldotherwise, without that renegotiation, have be past due or impaired.

(c) Liquidity risk

Liquidity risk refers to the risk that an entity will encounter difficulty in meeting obligations associated with financialliabilities.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of fundingthrough the Commonwealth and the ability to close out market positions. More specifically, daily monitoring of cash flow iscarried out by the Investment and Treasury Services team to ensure that there is adequate liquidity to meet the Group’sobligations over the near term. The short term working capital pool is used as a liquidity buffer to this end.

The tables below analyse the Group’s and the parent entity's financial assets and liabilities into relevant maturity groupingsbased on the remaining period at the reporting date to the contractual maturity date, where relevant, the averageapplicable interest rate together with estimated future interest are shown. The amounts disclosed in the table are thecontractual undiscounted cash flows, which may not reconcile to the balance sheet.



ConsolidatedAverageInterest

Rate

Averageinterest

Less than1 Year

1 to 5Years

5+Years

Totalundiscounted

cash flows% $'000 $'000 $'000 $'000 $'000

31 December 2008

Financial assetsCash at bank and on hand 6.32 - 73,149 - - 73,149Deposit at call and investments originally maturingwithin three months 4.68 - 3,178 - - 3,178Sundry debtors - - 40,752 - - 40,752Student debtors - - 4,211 - - 4,211Accrued income - - 15,129 - - 15,129Investment income receivables - - 1,858 - - 1,858Term deposits 7.87 5,134 83,000 2,156 - 90,290Bonds 9.25 4,143 - - 10,223 14,366Unlisted domestic/international fixed interest - - - 148,272 - 148,272Listed domestic equities - - - - 101,485 101,485Listed international equities - - - - 50,078 50,078Unlisted equities - - - - 3,032 3,032Other (unit trusts) - - 1,547 - - 1,547Total financial assets 9,277 222,824 150,428 164,818 547,347

Financial liabilitiesSundry creditors - - 37,019 - - 37,019Accrued expenses - - 10,150 - - 10,150Monies held from State government - - 20,556 - - 20,556Monies held from associated parties - - 3,921 - - 3,921ANZ bank loan 5.10 9,031 3,433 13,522 16,870 42,856EDB grant 7.24 2,261 1,319 8,565 - 12,145Financing arrangement (Westpac) 6.00 43,240 - 1,494 39,679 84,413Total financial liabilities 54,532 76,398 23,581 56,549 211,060

31 December 2007

Financial assetsCash at bank and on hand 6.11 - 39,141 - - 39,141Deposit at call and investments originally maturingwithin three months 6.15 - 2,709 - - 2,709Sundry debtors - - 35,416 - - 35,416Student debtors - - 7,682 - - 7,682Accrued income - - 6,881 - - 6,881Loans & other non-current receivables - - - 1,695 - 1,695Unlisted domestic/international fixed interest - - - 181,423 - 181,423Listed domestic equities - - - 116,417 - 116,417Listed international equities - - - 57,625 - 57,625Listed equities - - - 3,690 - 3,690Total financial assets - 91,829 360,850 - 452,679

Financial liabilitiesSundry creditors - - 31,859 - - 31,859Accrued expenses - - 17,363 - - 17,363Monies held from associated parties - - 8,577 - - 8,577ANZ bank loan - 6,602 1,650 6,600 8,629 23,481EDB grant 7.82 2,514 917 7,538 - 10,969EDB loan - - 11,805 - - 11,805Financing arrangement (Westpac) 6.20 45,975 - 512 40,598 87,085Total financial liabilities 55,091 72,171 14,650 49,227 191,139







ParentAverageInterest

Rate

Averageinterest

Less than1 Year

1 to 5Years

5+Years

Totalundiscounted

cash flows% $'000 $'000 $'000 $'000 $'000

31 December 2008

Financial assetsCash at bank and on hand 6.32 - 41,912 - - 41,912Sundry debtors - - 37,948 - - 37,948Student debtors - - 4,211 - - 4,211Accrued income - - 15,276 - - 15,276Investment income receivables - - 1,947 - - 1,947Term deposits 7.87 5,134 83,000 2,156 - 90,290Bonds 9.25 4,143 - - 10,223 14,366Unlisted domestic/international fixed interest - - - 93,433 - 93,433Listed domestic equities - - - - 100,185 100,185Listed international equities - - - - 49,312 49,312Other (unit trusts) - - 1,547 - - 1,547Total financial assets 9,277 185,841 95,589 159,720 450,427

Financial liabilitiesSundry creditors - - 39,264 - - 39,264Accrued expenses - - 5,376 - - 5,376Monies held from State Government - - 20,556 - - 20,556Monies held from controlled entities - - 11,523 - - 11,523Monies held from associated parties - - 3,901 - - 3,901ANZ bank loan 5.10 9,031 3,433 13,522 16,870 42,856EDB grant 7.24 2,261 1,319 8,565 - 12,145Financing arrangement (Westpac) 6.00 43,240 - 1,494 39,679 84,413Loans from related parties 6.70 67 - 2,368 - 2,435Total financial liabilities 54,599 85,372 25,949 56,549 222,469

31 December 2007

Financial assetsCash at bank and on hand 6.11 - 19,206 - - 19,206Sundry debtors - - 31,053 - - 31,053Student debtors - - 7,682 - - 7,682Accrued income - - 6,807 - - 6,807Loans & other non-current receivables - - - 1,881 - 1,881Unlisted domestic/international fixed interest - - - 117,597 - 117,597Listed domestic equities - - - 114,428 - 114,428Listed international equities - - - 56,396 - 56,396Listed equities - - - 2,036 - 2,036Total financial assets - 64,748 292,338 - 357,086

Financial liabilitiesSundry creditors - - 34,467 - - 34,467Accrued expenses - - 9,979 - - 9,979Monies held from controlled entities - - 4,700 - - 4,700Monies held from associated parties - - 8,577 - - 8,577ANZ bank loan - 6,602 1,650 6,600 8,629 23,481EDB grant 7.82 2,514 917 7,538 - 10,969EDB loan - - 11,805 - - 11,805Financing arrangement (Westpac) 6.20 45,975 - 512 40,598 87,085Loans from related parties 6.57 591 9,791 - - 10,382Total financial liabilities 55,682 81,886 14,650 49,227 201,445

(d) Fair value estimation

The carrying amounts of financial assets and liabilities at balance sheet date are approximately to their fair value.


45 Defined Benefit PlansAll employees of the Group are entitled to benefits from the Group's superannuation plan on retirement, disability or death.The Group's superannuation plan has defined benefits sections and defined contribution sections. The defined benefitsections provide lump sum benefits based on years of service and final average salary.

The following sets out details in respect of the parent entity only.

(a) Fund specific disclosure

The Pooled Fund holds in trust the investments of the closed NSW public sector superannuation schemes:State Authorities Superannuation Scheme (SASS)State Authorities Non contributory Superannuation Scheme (SANCS)State Superannuation Scheme (SSS)

The above schemes are all defined benefit schemes or at least a component of the final benefit is derived from a multipleof member salary and years of membership. All schemes are closed to new members.

The Professorial Superannuation Fund (PSF) is a combination of accumulation and defined benefits. This scheme isclosed to new members.

The parent entity expects to make a contribution of $10,600,000 (2007: $11,300,000) to the defined benefit plan during thenext financial year.

The principal assumptions used for the purposes of the actuarial valuations were as follows (expressed as weightedaverages):

2008%

2007%

State schemes (SSS, SANCS, SASS)Discount rate(s) (gross of tax) 4.09 6.40Discount rate(s) (net of tax) 4.09 6.40Expected return on plan assets 8.30 7.60Expected rate(s) of salary increase 3.50 3.75Expected rate of CPI increase 2.50 2.50

Professorial Superannuation FundDiscount rate(s) (gross of tax) 4.10 6.40Discount rate(s) (net of tax) 3.50 5.30Expected return on plan assets 5.90 8.20Expected rate(s) of salary increase 4.00 4.00Expected rate of CPI increase 2.50 2.50

For State schemes, the expected return on assets assumption is determined by weighting the expected long-term returnfor each asset class by the target allocation of assets to each class. The returns used for each class are net of investmenttax and investment fees.

For the Professorial Superannuation Fund, the expected rate of return was based on the asset allocation provided as at31 December 2008 and the appropriate risk margin for each asset class in which the defined benefit monies are invested.

The analysis of the plan assets and expected rate of return at the balance sheets date is as follows:

2008%

2007%

State schemes (SSS, SANCS, SASS)Equity instruments 56.00 60.00Debt instruments 15.00 13.00Property 11.00 10.00Cash and other 18.00 17.00Weighted average expected return 8.30 7.60

Professorial Superannuation FundEquity instruments 56.00 58.00Debt 42.00 40.00Cash 2.00 2.00Weighted average expected return 5.90 8.20






45 Defined Benefit Plans (continued)

(a) Fund specific disclosure (continued)

The fair value of the plan fund assets does not include amounts relating to any of the controlled entity's own financialinstruments and any property occupied by, or other assets used by, the controlled entity.

The history of experience adjustments is as follows:

2008 2007 2006 2005 2004$'000 $'000 $'000 $'000 $'000

State schemes (SSS, SANCS, SASS)Fair value of plan assets (362,917) (509,925) (496,110) (472,810) (436,852)Present value of defined benefit obligation 1,128,819 876,709 912,369 982,398 943,767Experience adjustments on plan liabilities 267,326 (59,532) (80,688) 7,964 N/AExperience adjustments on plan assets 116,445 (6,476) (29,038) (27,165) N/A

Professorial Superannuation FundFair value of plan assets (33,321) (40,857) (37,931) (33,313) (5,934)Present value of defined benefit obligation 55,247 44,331 48,398 49,507 52,251Experience adjustments on plan liabilities 3,026 (2,205) 187 244 N/AExperience adjustments on plan assets 9,442 (1,742) (4,182) (494) N/A

(b) Financial impact on funds guaranteed by Commonwealth GovernmentSASS SSS Total$'000 $'000 $'000

Present value obligations - 2008Opening defined benefit obligation 69,634 787,841 857,475Current service cost 2,625 2,541 5,166Interest cost 4,272 48,710 52,982Actuarial losses 1,108 263,409 264,517Contributions from plan participants 1,243 4,136 5,379Benefits paid (6,938) (70,515) (77,453)Closing defined benefit obligation 71,944 1,036,122 1,108,066

Present value obligations - 2007Opening defined benefit obligation 75,084 816,656 891,740Current service cost 3,014 2,894 5,908Interest cost 4,333 47,487 51,820Actuarial gains (2,194) (58,082) (60,276)Contributions from plan participants 1,400 4,315 5,715Benefits paid (12,003) (25,429) (37,432)Closing defined benefit obligation 69,634 787,841 857,475

Fair value of plan assets - 2008Opening fair value of plan assets 70,881 429,429 500,310Expected return on plan assets 5,218 31,606 36,824Actuarial losses (16,636) (97,396) (114,032)Contributions from the employer 2,741 3,347 6,088Contributions from plan participants 1,243 4,136 5,379Benefits paid (6,938) (70,515) (77,453)Closing fair value of plans assets 56,509 300,607 357,116

Fair value of plan assets - 2007Opening fair value of plan assets 74,541 409,365 483,906Expected return on plan assets 5,445 29,178 34,623Actuarial gains/(losses) (1,620) 8,141 6,521Contributions from the employer 3,118 3,859 6,977Contributions from plan participants 1,400 4,315 5,715Benefits paid (12,003) (25,429) (37,432)Closing fair value of plans assets 70,881 429,429 500,310



(b) Financial impact on funds guaranteed by Commonwealth Government (continued)

SASS SSS Total$'000 $'000 $'000

Included in Balance sheets 2008Present value of defined benefit obligations 71,944 1,036,122 1,108,066Fair value of plan assets (56,509) (300,607) (357,116)Net liability arising from defined benefit obligations 15,435 735,515 750,950

Included in Balance sheets 2007Present value of defined benefit obligations 69,634 787,841 857,475Fair value of plan assets (70,881) (429,429) (500,310)Net liability/(asset) arising from defined benefit obligations (1,247) 358,412 357,165

$698,347,000 (2007: $319,055,000) of the net liabilities for superannuation funds is payable by the CommonwealthGovernment. This is based on the net liabilities of the State Authorities Superannuation Scheme of $15,435,000 (2007: netassets of $1,247,000) and the net liabilities of the State Superannuation Scheme of $735,515,000 (2007: $358,412,000)less the net liabilities of the superannuation funds of University College ADFA totalling $52,603,000 (2007: $38,110,000),refer to note 19.

As at 31 December 2008, the amount contributed by the Commonwealth Government in 2004 for the University CollegeADFA plus the return on that investment totals $32,685,000 (2007: $38,110,000). These funds are managed as part of thepool of general investments of the Group. These funds are included as part of available-for-sale financial assets disclosedin the balance sheet. During the year, the investment loss from these assets was $5,425,000 (2007: investment returns$2,737,000).

SASS SSS Total$'000 $'000 $'000

Expense recognised 2008Current service cost 2,625 2,541 5,166Interest on obligation 4,272 48,710 52,982Expected return on plan assets (5,218) (31,606) (36,824)Actuarial losses recognised during the year 17,744 360,805 378,549Expense 19,423 380,450 399,873

Expense recognised 2007Current service cost 3,014 2,894 5,908Interest on obligation 4,333 47,487 51,820Expected return on plan assets (5,445) (29,178) (34,623)Actuarial gains recognised during the year (575) (66,223) (66,798)Expense/(income) 1,327 (45,020) (43,693)

Actual return on plan assets 2008 (11,850) (69,601) (81,451)Actual return on plan assets 2007 5,632 31,774 37,406

If a net surplus exists in a Fund, the Group may be able to take advantage of it in the form of a reduction in the requiredcontribution rate, depending on the advice of the Fund's actuary.

Where a net deficiency exists, the Group is responsible for any difference between the employer's share of fund assetsand the defined benefit obligation, except for SASS and SSS where the difference will be borne by the CommonwealthGovernment.







(c) Financial impact on other fundsSANCS PSF Total$'000 $'000 $'000

Present value obligations - 2008Opening defined benefit obligation 19,234 44,331 63,565Current service cost 977 944 1,921Interest cost 1,136 2,151 3,287Actuarial losses 2,809 12,196 15,005Contributions from plan participants - 6 6Benefits paid (3,403) (4,381) (7,784)Closing defined benefit obligation 20,753 55,247 76,000

Present value obligations - 2007Opening defined benefit obligation 20,629 48,398 69,027Current service cost 1,106 1,121 2,227Interest cost 1,150 2,112 3,262Actuarial losses/(gains) 745 (2,855) (2,110)Contributions from plan participants - 11 11Benefits paid (4,396) (4,456) (8,852)Closing defined benefit obligation 19,234 44,331 63,565

Present value of plan assets - 2008Opening fair value of plan assets 9,615 40,857 50,472Expected return on plan assets 937 3,293 4,230Actuarial losses (2,611) (9,442) (12,053)Contributions from the employer 1,262 2,988 4,250Contributions from plan participants - 6 6Benefits paid (3,403) (4,381) (7,784)Closing fair value of plans assets 5,800 33,321 39,121

Present value of plan assets - 2007Opening fair value of plan assets 12,204 37,931 50,135Expected return on plan assets 1,124 2,785 3,909Actuarial (losses)/gains (115) 1,742 1,627Contributions from the employer 798 2,844 3,642Contributions from plan participants - 11 11Benefits paid (4,396) (4,456) (8,852)Closing defined benefit obligation 9,615 40,857 50,472

Included in Balance sheets 2008Present value of funded obligations 20,753 55,247 76,000Fair value of plans (5,800) (33,321) (39,121)Net liability arising from defined benefit obligations 14,953 21,926 36,879

Included in Balance sheets 2007Present value of funded obligations 19,234 44,331 63,565Fair value of plans (9,615) (40,857) (50,472)Net liability arising from defined benefit obligations 9,619 3,474 13,093

Expense recognised 2008Current service cost 977 944 1,921Interest on obligation 1,136 2,151 3,287Expected return on plan assets (937) (3,293) (4,230)Actuarial losses recognised in the year 5,420 21,638 27,058Expense 6,596 21,440 28,036



(c) Financial impact on other funds (continued)

SANCS PSF Total$'000 $'000 $'000

Expense recognised 2007Current service cost 1,106 1,121 2,227Interest on obligation 1,150 2,112 3,262Expected return on plan assets (1,123) (2,785) (3,908)Actuarial losses/(gains) recognised in the year 860 (4,597) (3,737)Expense/(income) 1,993 (4,149) (2,156)

Actual return on plan assets 2008 (1,673) (6,150) (7,823)Actual return on plan assets 2007 1,008 4,526 5,534

UniSuper

The parent entity also contributes to UniSuper Defined Benefit Division ('UniSuper'), formerly known as SuperannuationScheme for Australian Universities (SSAU) for academic staff appointed since 1 March 1988 and all other staff from 1 July1991.

Clause 34 of the UniSuper Trust Deed outlines the process UniSuper must undertake (including employer notificationsand notice periods) in order to request additional contributions from employers if the UniSuper assets are considered bythe Trustee to be insufficient to provide benefits payable under the Deed. At least four years' notice that such a requestmay be made was required. If such a request was agreed to by all employers then members had to also contributeadditional contributions. If all employers did not agree to increase contributions the Trustee had to reduce benefits on anappropriate basis in accordance with the Trust Deed. The Trustee notified employers during 2003 that such a request maybe made in the future but it considered this was unlikely at that time.

Should the balance of the UniSuper Fund become a deficit, the Group is not liable to make any payments to UniSuperunless all the universities (including The University of New South Wales) who are the members of the UniSuper Fundunanimously agree to make additional contributions to the Fund. It is only on this basis that the Group would be liable forthe agreed additional contribution. Management of the parent entity believes it is unlikely that any additional contributionwill be required in the foreseeable future.

Historically, surpluses in UniSuper have been used to improve members' benefits and have not affected the amount ofparticipating employers' contributions.

As at 30 June 2008, the excess of total assets over vested benefits of UniSuper were estimated to be $323,000,000(2007: $1,683,000,000). The vested benefits are benefits which are not conditional upon continued membership (or anyfactor other than leaving the service of the participating institution) and include the value of CPI indexed pensions beingprovided by the Defined Benefit Division (DBD).

As at 30 June 2008, the excess of total assets over accrued benefits of UniSuper were estimated to be $1,456,000,000(2007: $2,587,000,000). The accrued benefits have been calculated as the present value of expected future benefitspayments to members and CPI indexed pensioners which arise from membership of UniSuper up to the reporting date.

The next formal actuarial review of the DBD is scheduled for 31 December 2008, with the results expected to be reportedin May 2009.







(c) Financial impact on other funds (continued)

UniSuper (continued)

The vested benefit and accrued benefit liabilities were determined by the Fund's actuary, Russell Employee Benefits,using the actuarial demographic assumptions outlined in the report dated 13 July 2006 on actuarial investigation of DBDas at 31 December 2005. The financial assumptions used were:

Vested Benefits Accrued Benefits% %

Gross of tax investment return 7.25 8.50Net of tax investment return 6.75 8.00Consumer Price Index 2.75 2.75Inflationary salary increases long term 3.75 3.75Inflationary salary increases next one year 5.00 5.00(Additional promotional salary increases are assumed to apply based on past experience)

Assets have been included at their net market value, i.e. allowing for realisation costs.

Other superannuation schemes

The Group also contributes to the Commonwealth Superannuation Scheme. This superannuation scheme is fully funded.

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(406

) For the year ended 31 December 2008 (University only)

Budget Actual Budget 2008 2008 2009 $'000 $'000 $'000

Revenue from continuing operations Australian Government financial assistance Australian Government grants 414,114 470,586 461,759 HECS-HELP 98,000 97,510 94,374 FEE-HELP 20,000 23,419 21,247 State and Local Government financial assistance 12,000 14,947 14,000 HECS-HELP – Student payments 27,000 28,733 31,862 Fees and charges 277,687 276,914 314,659 Investment revenue 29,356 44,655 43,532 Royalties, trademarks and licences 591 3,324 2,000Consultancy and contracts 59,000 70,400 70,000 Other revenue 37,244 16,728 17,565

Total revenue from continuing operations 974,992 1,047,216 1,070,998

Gains on disposal of assets - 10,499 -Other income 6,218 5,819 5,014

Total income from continuing operations 6,218 16,318 5,014

Total revenue and income from continuing operations before deferred Government superannuation contributions 981,210 1,063,534 1,076,012

Deferred Government superannuation contributions - 364,769 -

Total revenue and income from continuing operations 981,210 1,428,303 1,076,012

Expenses from continuing operations Employee related expenses 547,482 590,715 617,772 Depreciation and amortisation 40,051 83,557 81,218 Repairs and maintenance 21,564 23,275 22,462 Finance costs 3,198 5,235 1,366Impairment of assets 1,092 68,280 -Losses on disposal of assets 82 700 -Other expenses 335,905 349,389 366,627 Other investment losses - 348 -

Total expenses from continuing operations before deferred employee benefits for superannuation 949,374 1,121,499 1,089,445

Deferred employment benefits for superannuation - 384,687 -

Total expenses from continuing operations 949,374 1,506,186 1,089,445

Operating result for the year 31,836 (77,883) (13,433)

31 D

ecem

ber 2

008

(con

tinue

d)

Supplementary information


Land Appendix (University only)

In accordance with Section 41B 1(d) of the Public Finance and Audit Act, below is the unaudited Land Appendix to the Financial Statements of the University of New South Wales for the year ended 31 December 2008.

Land Value Land Value 2008 2007

Land Use $'000 $'000

T Teaching, Research and other University purposes 254,640 255,405 A Student Accommodation 20,960 22,610 LR Leased to residential tenants 16,725 18,060 LC Leased to commercial tenants 31,270 31,695

323,595 327,770

The total value of land owned or occupied is higher than the land value recognised within the categories “Land” and “Student Accommodation” in the Balance Sheet. The value of the Land disclosed in the Balance Sheet has been adjusted for impairment.

Summary of significant items raised by the New South Wales Auditor-General in the Management Letter for the year ended 31 December 2007 (University only)

The following information summarises major issues raised by the NSW Auditor-General in the Management Letter for the year ended 31 December 2007 and the action provided by University management.

Areas of identified deficiency Action

1 Superannuation liability for Fixed Term Employees

Obligations to affected individuals were satisfied during 2008. Management has put in place appropriate procedures to prevent future reoccurrence.

2 Employment related taxes for contractors

Management carried out a comprehensive examination of UNSW employment and related liabilities during 2008. The magnitude of the liabilities was found to be much smaller than initially estimated. Management is currently in the process of implementing its planned changes to UNSW policies, practices and procedures to prevent this reoccurring in the future.

3 FBT, Payroll Tax and PAYG – Payment to inventors

Management obtained a ruling from the Australian Taxation Office regarding payments made to inventors affirming that UNSW had no employment tax obligation for payments made to individuals in their capacity as inventors.

4 Co-operative Research Centre for Eye Research and Technology (CRCERT)

Management has acted upon on the recommendations of an independent report. Whilst the majority of items raised have now been addressed, a number of matters remain in progress and are expected to be resolved before June 2009.

5 Credit balances in student debtors’ accounts

Management has been reviewing the detail credit balance for student debtors on an ongoing basis. Student Services created a website to assist students for the refund process and recently added a credit balance policy in the UNSW Fee Policy advising students on how to obtain an online refund. Students who has overpaid will be contacted at the end of each semester and a refund will be issued.

6 Complexity of Group structure Amongst other activities, management has taken steps to commence the voluntary liquidation of a number of dormant wholly owned subsidiaries as appropriate.

UNSW will continue to review the appropriateness of its group structure and will take whatever steps necessary to improve existing governance and controls, and reporting and issues resolution on a timely basis.

Supplementary informationSupplementary information

Investment and investment performance (University only)

During 2008 the University's investment were divided between the following three investment Pools:

Pool L, a long-term investment fund with an investment horizon of more than two years, the components of which were managed during the year by eight external fund managers;

Pool S, the University's short-term working capital with an investment horizon of less than two years managed internally by UNSW's Investment Services; and

Pool P consists of principally student accommodation and residential properties (95%) and significant venture initiatives (5%). The student accommodations are held for strategic purpose and managed by the University’s Strategic Property Group. These properties are not classified as investment properties under current accounting standards.

In accordance with the Annual Report (Statutory Bodies) Act 1984 and its Regulation 2005, the performance of Pool L and S are measured in the table below against Treasury Corporation Facilities. It is not appropriate for Pool P's performance to be benchmarked in this way as it is a project fund and its investment criteria and horizon differ markedly from any of the Treasury Corporation facilities.

Fund Manager

(i) Return for 12 months to 31/12/2008

(ii) Treasury Corporation

Facility Performance for

12 months to 31/12/2008

(i) Return for 12 months to

31/12/2007

(ii) Treasury Corporation

Facility Performance for

12 months to 31/12/2007

% % % %

Pool L External -17.06 -15.75 7.08 5.06

Pool S External 4.27 7.62 5.90 6.55

(i) The returns in the table reflect the change in market value of investments between the beginning and end of the year and, therefore, include unrealised capital gain and losses.

(ii) For the Pool L comparison with the Treasury Corporation facility performance, a weighted average of the performance of the medium and long term facilities is employed to reflect the strategic asset allocation of Pool L.

University account payment performance (University only)

Total accounts paid on time Total amount paid

Target (i) % Actual (i) % $'000 $'000

2007 January - March 70 54 106,196 149,720 April - June 70 55 76,838 142,562 July - September 70 64 121,584 173,925

October - December 70 58 100,400 152,938

2008 January - March 70 56 83,969 119,695 April - June 70 59 102,328 144,622 July - September 70 61 247,564 288,506

October - December 70 69 128,690 176,850

(i) The % is based on the number of transactions processed and not on monetary terms.



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Hours of business

Switchboard: Monday – Friday, 9am– 5pmMany departments of the University operatebeyond standard business hours.

Produced by the UNSW Offi ce of Media and CommunicationsDesign and production: TONIC CONNECTIVETM

ISSN 0726-8459 Volume 2

© The University of New South Wales 2009

For copies of the Annual Report please contactthe Offi ce of Media and Communications on+61 2 9385 3192, email [email protected]

The Report is also available on the website atwww.unsw.edu.au/news/pad/publications.html

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Supplementary information

Areas of identified deficiency Action 7 Governance and processes over major

asset transactions Management has taken steps to establish a framework for more effective dialogue between the relevant functional areas involved. The establishment of this forum provides a platform from which the required governance and control improvements in this area can be efficiently implemented.

8 Grossing up impairment of assets Management has considered the point raised by the Auditor-General and remains satisfied with the existing level of disclosure on the basis that it complies with Australian Accounting Standards and 2008 Financial reporting guidelines issued by DEEWR, and is consistent with disclosures made in the financial reports of comparable entities.

Summary of significant items raised by the New South Wales Auditor-General in the Statutory Audit Report for the year ended 31 December 2008 (University only)

The following information summarises major issues raised by the NSW Auditor-General in the Statutory Audit Report for the year ended 31 December 2008 and the responses provided by University management.

Areas of identified deficiency Management Response

1 Impairment of Financial Assets that arose from the decline in the fair value of investments predominantly driven by the global financial crisis

Matter resolved. The decline in the fair value of investments was treated as impairment through the Income Statement.

2 The unhedged position on EDB loan repayment and outstanding grant.

Management is developing a framework for identifying and managing foreign exchange and interest rate exposure.

The University of N

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outh Wales A

nnual Report 2008

Volume Tw

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FINANCIAL REPORT 2008

www.unsw.edu.au

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